Competitive Advantage: Creating and Sustaining Superior Performance [Hardcover]

Michael E. Porter (Author)

Book Description

Release date: June 1, 1998 | ISBN-10: 0684841460 | ISBN-13: 978-0684841465 | Edition: 1

The essential complement to the pathbreaking book Competitive Strategy, Michael E. Porter's Competitive Advantage explores the underpinnings of competitive advantage in the individual firm. With over 30 printings in English and translated into thirteen languages, this second volume in Porter's landmark trilogy describes how a firm actually gains an advantage over its rivals. Competitive Advantage introduces a whole new way of understanding what a firm does. Porter's groundbreaking concept of the value chain disaggregates a company into "activities," or the discrete functions or processes that represent the elemental building blocks of competitive advantage.

Now an essential part of international business thinking, Competitive Advantage takes strategy from broad vision to an internally consistent configuration of activities. Its powerful framework provides the tools to understand the drivers of cost and a company's relative cost position. Porter's value chain enables managers to isolate the underlying sources of buyer value that will command a premium price, and the reasons why one product or service substitutes for another. He shows how competitive advantage lies not only in activities themselves but in the way activities relate to each other, to supplier activities, and to customer activities. Competitive Advantage also provides for the first time the tools to strategically segment an industry and rigorously assess the competitive logic of diversification.

That the phrases "competitive advantage" and "sustainable competitive advantage" have become commonplace is testimony to the power of Porter's ideas. Competitive Advantage has guided countless companies, business school students, and scholars in understanding the roots of competition. Porter's work captures the extraordinary complexity of competition in a way that makes strategy both concrete and actionable.

Editorial Reviews

Review

Financial Times The most influential management book of the past quarter century....A veritable goldmine of analytical concepts and tools to help companies get a much clearer grasp of how they can create and sustain competitive advantage.

Philip Kotler S.C. Johnson & Son, Distinguished Professor of International Marketing, Northwestern University Michael Porter has done it again. Having defined the 'what' and 'why' of competitive strategy in his earlier book, he now defines the 'how' in Competitive Advantage.

Newsday A sharp, aggressive and cogently reasoned book about competition that your smarter rivals will try to get to first.

The Washington Post A brilliant structural analysis of what competitive advantage might mean....

Antitrust Law & Economics Review A superb guide for business managers but also necessary background study for judges, antitrust agency officials, and economic experts in antitrust cases.

About the Author

Michael E. Porter, one of the world's leading authorities on competitive strategy and international competitiveness, is the C. Roland Christensen Professor of Business Administration at the Harvard Business School. In 1983, Professor Porter was appointed to President Reagan's Commission on Industrial Competitiveness, the initiative that triggered the competitiveness debate in America. He serves as an advisor to heads of state, governors, mayors, and CEOs throughout the world. The recipient of the Wells Prize in Economics, the Adam Smith Award, three McKinsey Awards, and honorary doctorates from the Stockholm School of Economics and six other universities, Porter is the author of fourteen books, among them Competitive Strategy, The Competitive Advantage of Nations, and Cases in Competitive Strategy, all published by The Free Press. He lives in Brookline, Massachusetts.

See all Editorial Reviews

Product Details

• Hardcover: 592 pages
• Publisher: Free Press; 1 edition (June 1, 1998)
• Language: English
• ISBN-10: 0684841460
• ISBN-13: 978-0684841465
• Product Dimensions: 6.3 x 1.8 x 9.4 inches
• Shipping Weight: 2.2 pounds (View shipping rates and policies)
• Average Customer Review: 4.5 out of 5 stars  See all reviews (60 customer reviews)
• Amazon Best Sellers Rank: #19,888 in Books (See Top 100 in Books)
  • #25 in Books > Business & Investing > Industries & Professions > Information Management
  • #28 in Books > Business & Investing > Management & Leadership > Management Science
  • #30 in Books > Business & Investing > Economics > Theory

More About the Author

Michael E. Porter, Professor of Business Administration at the Harvard Business School, is the author of Competitive Strategy, the recipient of the 1979 McKinsey Foundation Award for The Best Harvard Business Review Article, and a guest columnist for the Wall Street Journal. Professor Porter developed the much praised MBA course on Industry and Competitive Analysis, lectures widely on competitive strategy, and is a strategic consultant to numerous companies in the United States and abroad.

Most Helpful Customer Reviews

87 of 90 people found the following review helpful

5.0 out of 5 stars Strategy book of the 1980s - still a key reference guide April 11, 2005

By Peter Leerskov

Format:Paperback

Michael Porter is the founding father for strategies in a competitive context. This pioneering book represents some of his best thoughts on business and corporate strategy.

Chapter 1 is a summary of his first landmark book - "Competitive Strategy". So if you just want to buy one of his bestsellers, then buy "Competitive Advantage".

The book's most important contribution is the concept of the VALUE CHAIN. Today, you won't find an MBA who doesn't know this idea. This book gives you all the details on the value chain. And it even tells you exactly how the value chain is translated into his two generic strategies: Cost Leadership and Differentiation. Most strategy books devote a separate chapter to this idea. If you want to get a more than a superficial understanding of the value chain, you simply have to read Porter's book.

This book also gets to the core of how synergies are created and when diversification might work. Curiously, Porter chooses the term interrelationships for synergies (you know, a term for a nice idea that rarely occurred in practice...).

Being a business development manager, I have strategic thinking as part of my key areas. This book is still a reference guide for me. Obviously though, Porter's views cannot stand-alone.

If you're looking for critical views on Porter's ideas, then consider buying Hamel & Prahalad's "Competing for the Future" (1994) or Kim & Mauborgne's "Blue Ocean Strategy" (2005).

Beware: You have to read Porter's Harvard Business review article "What is Strategy" from 1996, if you want his own response to the critics.

Warning: You cannot work seriously with strategy without having understood Michael Porter's core concepts. And the superficial introduction by most - even advanced - strategy books won't make you competent enough to apply his ideas skilfully. Let me give you two examples:

COST STRUCTURE:

Most MBAs have learned about the value chain and cost structure analysis. But in real life I've seen very few who combine these two concepts proficiently. The real beauty in benchmarking cost structures is when you skilfully apply it to the value chain. This book tells you exactly how to do this. In practice, I've seen this approach applied very few times (except advanced strategy consultants). It may be because people often use Porter's concepts too casually...

COST DRIVERS:

Most strategy books are on drivers of differentiation - the preferred strategy choice by management gurus. And Porter does indeed help you on this issue. More importantly, this book is one of the few to tell you about the cost drivers. How many books have you read on Cost Leadership? Porter elaborates on 10 cost drivers, such as economies of scale, learning, linkages, synergies, pattern of capacity utilization, integration, timing, policies, and location.

STRATEGY IS ABOUT BEING DIFFERENT. Start out personally by reading the real thing ... it's a bargain.

Peter Leerskov,

MSc in International Business (Marketing & Management) and Graduate Diploma in E-business

29 of 31 people found the following review helpful

4.0 out of 5 stars The 'mother' of all business strategy books June 4, 1998

By A Customer

Format:Hardcover

I just finished a competitive strategy class in my MBA program and this book was referred to often. The most helpful section is the one that breaks down a company's activities and helps create a 'value chain' to figure out how and where an organization creates value. Once this is done, Porter delineates how competitive advantages might be created based on tinkering with value chain activities. The only thing, I felt, was not covered in the book was the 'core competence' concept which is also derived from the value chain but ignored in this particular publication. Nevertheless, this is a 'must have' for all potential strategy consultants.

17 of 18 people found the following review helpful

4.0 out of 5 stars Dated, but accessible even to non-MBA types December 21, 2003

By Lars Bergstrom VINE™ VOICE

Format:Hardcover

A comprehensive introduction to how you can create advantages in your industry, even if you're not an MBA-type and just an engineer (like me). It'll also give you a useful framework for assessing what your current company and group is doing, what its vulnerabilities are, and how it relates to what the rest of the market is doing so you can make recommendations.

The only downside was the dated feel of the examples, which really made it difficult for a younger person to relate to.