Competitive Advantage: Creating and Sustaining Superior Performance (Hardcover)

by Michael E. Porter (Author) "Competition is at the core of the success or failure of firms..." (more)
Key Phrases: achieving interrelationships, intangible interrelationships, competitor interrelationships, American Express, Federal Express, People Express (more...)

Editorial Reviews

Review
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. -- Review

Review
Financial TimesThe 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 UniversityMichael Porter has done it again. Having defined the 'what' and 'why' of competitive strategy in his earlier book, he now defines the 'how' inCompetitive Advantage.

NewsdayA sharp, aggressive and cogently reasoned book about competition thatyour smarter rivals will try to get to first.

The Washington PostA brilliant structural analysis of what competitive advantage mightmean....

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

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: 9.4 x 6.3 x 1.9 inches
• Shipping Weight: 1.7 pounds (View shipping rates and policies)
• Average Customer Review: 4.7 out of 5 stars See all reviews (40 customer reviews)
• Amazon.com Sales Rank: #9,015 in Books (See Bestsellers in Books)

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Customer Reviews

Most Helpful Customer Reviews

52 of 54 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 "The Strategist, www.lace.dk" (Denmark) - See all my reviews (REAL NAME)

This review is from: Competitive Advantage (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

24 of 25 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

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.

22 of 26 people found the following review helpful:

5.0 out of 5 stars Framework for activities within a business, December 28, 2000

By	Gerard Kroese (The Netherlands) - See all my reviews (REAL NAME)

Michael Porter is a Harvard Business School professor and a leading authority on competition and strategy. This book builds on his initial 1980-book 'Competitive Strategy', which focuses on the industries surrounding businesses (summary of 'Competitive Strategy' is Chapter 1!). In this book, 'Competitive Advantage', Porter focuses on the business itself. The book is based on the activity-based theory of the firm. Activities are what generate cost and create value for buyers/customers, and are the basic units for competitive advantage.

'Competitive Advantage' consists of four parts - Principles of Competitive Advantage, Competitive Scope within an Industry, Corporate Strategy and Competitive Advantage, and Implications for Offensive and Defensive Competitive Strategy. Part I introduces the concept of the value, which is a general framework for thinking about the activities involved in any business and assessing their relative costs and role in differentiation. Then Porter explains the impact of the value chain on cost advantage, differentiation, technology and competitors. Part II discusses industry segmentation and substitution. Part III explains the interrelationships among business units and their impact on horizontal strategy, achievement of interrelationships, and complementary products. Part IV discusses industry scenarios under uncertainty, defensive strategy, and attacks on industry leaders.

Although some parts of the book are somewhat outdated, I would say that many modern management books are based on or around this book. This book provides through the use of the value chain a very useful introduction into activities within businesses. I recommend readers to complement this book with Michael Porter's 1996-Harvard Business Review-article 'What is Strategy?' which is available as a e-book (pdf-file) at Amazon.com. Highly recommended to anyone interested in management and business activities.