Lao People’s Democratic Republic (Laos) is a developing countryin order to promote the Lao economicgrowth. The government has realized the significanceof creating stable economy which has laid out policies and strategies such as that electricity generation,it has a potential industry for driveeconomic growth as well as promoting the local and foreign investments. This paper investigates that applied Porter’s Diamond Framework for Competitive Advantage toanalyze exploring the competitiveness of industry-level framework focusing on the electricity generation industryin Lao PDR. It is to analyze a tool determining whether the electricity generation industry and able to provide firms with such favorable conditions allowing them to compete internationally. The findings of this study show an evidence ofleast cost option for energy generation because Laos may have a comparative advantage in geography and natural resources. Moreover, the mainly Lao electricity generation production industry is hydropower in addition, this production also is to fulfill the domestic and foreign countries demand.

Keywords : Porter’s diamond framework, Competitive advantage, Electricity generation industry.