Competitive Strategy: Techniques for Analyzing Industries and Competitors

Competitive Strategy: Techniques for Analyzing Industries and Competitors | Michael E. Porter | Required reading for the strategist

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Competitive Strate...

	Competitive Strategy: Techniques for Analyzing Industries and Competitors Michael E. Porter Free Press, 1998 - 397 pages average customer review:based on 44 reviews view larger image
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highly recommended

Starting point for business strategy

Michael Porter is a Harvard Business School professor and a leading authority on competition and strategy. This book is a landmark in the field of strategy/strategic management, which later has become known as the positioning school. The book provides a great framework.

The book consists of three parts - General Analytical Techniques, Generic Industry Environments, and Strategic Decisions. In addition, the two appendices - Portfolio Techniques in Competitor Analysis, and How to Conduct an Industry Analysis - should also be mentioned as they are very useful.

In Part I, Porter discussess the structural analysis of industries (with the world-famous five forces), the three generic competitive strategies (overall cost leadership, focus, and differentiation), an excellent framework for competitor analysis, competitive moves, strategy toward buyers and suppliers, structural analysis within industries (strategic groups, strategic mapping, mobility barriers), and industry evolution (life cycle, evolutionary processes).

In Part II, Porter discusses competitive strategy within various generic industry environments, such as fragmented industries (with no real market leader), emerging industries (e-commerce and Internet are excellent examples, although not mentioned in this book as it was written in 1980), mature industries, declining industries, and global industries.

In Part III, Porter discusses strategic decisions which businesses/firms can take, such as vertical integration (forward, backward, partnerships), capacity expansion, and entry into new industries/businesses.

Even after 20 years, most of this book still stands strong, although some people will argue this. Michael Porter has responded to his critics in the 1996-Harvard Business Review article 'What is Strategy?' which is available as e-book (pdf-file) at Amazon.com. It is still a MUST for MBA-students and all other people interested in strategy/strategic management. The book is simple to read with plenty of examples and thus does not become a struggle.

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Required reading for the strategist

When I started as a strategy consultant, Porter's Competitive Strategy and the classic five forces model within provided me with a first look at the process and mindset of the pure strategist. A weekend spent reading this book gave me the framework to intelligently analyze company strategy. I've made it required reading for all new employees.

If you are a business student (undergrad or MBA) and for some reason you have not read this, read it and assume everyone you interview with has read it. Use its basic principles in a case study interview and you'll pass with flying colors. Anyone in business of any sort should read this book and try applying it to your own business environment. Its pretty amazing how clear your business issues will appear.

Now for the negatives. It is very out of date, so do not use any of his observations on any of the industries mentioned. His case studies towards the end of the book are so irrelevant they are not worth reading, just skimming. Read his justifications carefully, since you may find yourself disagreeing with a significant percentage.

Despite its age, this is still the primer on strategy. Read this, and then read everything else.

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A Classic

Without a doubt, this book is a "must-have" for anyone involved in Strategic Planning or Analysis. Porter's work has aged nicely, many of his concepts can easily be applied to the current economic environment. It is not surprising that this book, along with his other work's is often quoted.
Porter allows us to view industries and companies through an insightful lens. The framework Porter lays out is a great starting point for any analysis of industries or compeitors.

Timeless classic

'Competitive Strategy' (along with Porter's 'Competitive Advantage' & 'Competitive Advantage of Nations') have remained as the 'classic' work on business strategy. Although the businesss world has evolved significantly, I find the framework & analysis of the book to still be greatly applicable & comprehensive.

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reviews: 1, 2, 3, 4, 5, page 6, 7, 8, 9

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