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Competitive Strategy Techniques for Analyzing Industries and Competitors
Electrifying in its simplicity - like all great breakthroughs - COMPETITIVE STRATEGY captures the complexity of industry competition in five underlying forces. Author Michael Porter introduces one of the most powerful competitive tools yet developed: his three generic strategies - lowest cost, differentiation, and focus - which bring structure to the task of strategic positioning. He shows how competitive advantage can be defined in terms of relative cost and relative prices, thus linking it directly to profitability, and presents a whole new perspective on how profit is created and divided.
More than a million managers in both large and small companies, investment analysts, consultants, students, and scholars throughout the world have internalised Porter's ideas and applied them to assess industries, understand competitors and choose competitive positions. COMPETITIVE STRATEGY has filled a void in management thinking. It provides an enduring foundation and grounding point on which all subsequent work can be built.
Porter's rich frameworks and deep insights comprise a sophisticated view of competition unsurpassed in the last quarter-century.
Additional Information:
More than a million managers in both large and small companies, investment analysts, consultants, students, and scholars throughout the world have internalised Porter's ideas and applied them to assess industries, understand competitors and choose competitive positions. COMPETITIVE STRATEGY has filled a void in management thinking. It provides an enduring foundation and grounding point on which all subsequent work can be built.
Porter's rich frameworks and deep insights comprise a sophisticated view of competition unsurpassed in the last quarter-century.
Additional Information:
416 pages, Paperback
First published October 1, 1980
1293 people are currently reading
31980 people want to read
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Displaying 1 - 30 of 175 reviews
February 2, 2015
This is one of those books that you have to read if you're to take yourself as a business person seriously. If you haven't gone to b-school and already studied this extensively then you should. Thinking about the market, buyers, sellers and competitors this way, particularly if you are doing something new could not be more important. A true 5 star must read.
October 16, 2009
I liked this book a lot relative to something most people would find dry and uninteresting. For anyone curious about how industries are structured and how that relates to the strategy they should adopt I would highly recommend this book.
The book is slightly dated by its mention of "microcomputers" along with other now extinct technologies and companies. However, the basic principal's still apply. If Michael Porter's work was not still relevant to managers and industry executives, business professors would not assign this text as reading in their courses.
For me, the most interesting part of this book was being able to relate my own companies' position in our industry to the characteristics Porter describes. Other portions of the book are less relevant and as a result less interesting. I would not recommend this book for casual reading.
The book is slightly dated by its mention of "microcomputers" along with other now extinct technologies and companies. However, the basic principal's still apply. If Michael Porter's work was not still relevant to managers and industry executives, business professors would not assign this text as reading in their courses.
For me, the most interesting part of this book was being able to relate my own companies' position in our industry to the characteristics Porter describes. Other portions of the book are less relevant and as a result less interesting. I would not recommend this book for casual reading.
February 22, 2022
در ادامه خوانش کتاب های استراتژی رسیدم به کتاب استراتژی رقابتی که نمیدونم چرا نسخه فارسی کتاب توی گودریدز اضافه نشده بود و من هم متاسفانه زمانش رو نداشتم که اضافه کنمُ لطفا دوستان زحمت این کتاب رو هم بکشن.
فکر میکنم معروف ترین کتاب آقای پورتر باشه و بیش از ۴۰ سال از انتشار اولیه اون گذشته اما خوانش کتاب نکات بسیار خوبی داره که البته سنگین تر از دو کتاب قبل هست که ریویو گذاشته بودم. نام کتاب موضوع مطرح شده رو مشخص کرده و شامل ۳ فصل:
فصل اول
تحلیل ساختاری صنایع
عوامل تعیین کننده ساختاری شدت رقابت
تحلیل ساختاری و استراتژی رقابتی
تحلیل ساختاری و تعریف صنعت
فصل دوم
استراتژی های رقابتی ژنریک (عمومی)
استراتژی های عمومی سه گانه
توقف در وسط
خطرات استراتژی های ژنریک
فصل سوم
چارجوبی برای تحلیل رقیب
اجزاء تحلیل رقیب
تجمیع چهار بخش تحلیل رقبا – پروفایل واکنش رقیب
تحلیل رقبا و پیش بینی صنعت
لزوم وجود سیستم اطلاعات از رقیب
August 2, 2015
Harvard professor and management consultant analyzes how countries develop capabilities to maintain or further competitiveness in the global market. The development of software engineers in Bangalore, India is an excellent example of how a region can carve out a niche in the global market. Another example is high-end fashion in Italy. In this era of hyper-competition, countries must look ahead and develop those skills and capabilities that would position it in a place of advantage.
October 13, 2018
A concept that Warren Buffett has popularized in the world of investing is circle of competence. It describes what industries and businesses the investor understands well enough to be able to make an informed investment decision. It may be easy to understand the notion but its realization surely is harder than it seems. An integral part is to grasp the inner workings of an industry and the competitive situation of the specific business. A book that has stood the test of time and that will give the reader some well-needed guidance on the subject is Competitive Strategy by Michael E. Porter.
Porter is a Professor of Harvard University and Head of the Institute of Strategy and Competitive Strategy. He has written several pioneering books and papers and is possibly most renowned for Competitive Strategy and Competitive Advantage written five years later. He is a thought-leader and his material is widely used in academia worldwide and by practitioners as managers, consultants and investors. Porter has throughout his career worked as a consultant to help businesses improve their skills in making strategic decisions. He has studied hundreds of businesses in his research while teaching at Harvard Business School and has used much of that experience to produce his groundbreaking writings.
Competitive Strategy is divided into three parts. In the first part covering chapters one to eight, Porter presents a framework for how to analyze an industry and its competitors. His famous five forces, the key concept of the book, act as a base for the analysis. Chapters one, two, seven and eight are essential reading for both the investor and the manager as they present a foundation for how to think about competitive advantages on various levels while chapters three to six are more tilted towards managers and management consultants by giving hands-on information on how to device strategies. The management’s task is to develop strategies to strengthen the competitive advantage while the investor’s job is to analyze if management is doing the right things. In other words, management builds the competitive advantage and investors measure it. The second part of the book covers strategies for different industry structures as for example fragmented industries with many competitors and no dominating leader as well as emerging industries lacking stable rules. In the last part, again more interesting for managers and consultants, Porter presents several important strategic decisions that firms need to take and applies the ideas and lessons earlier described. Appendix 2 is also useful as it presents a hands-on way on how to conduct an analysis.
Investors, arguing that it’s too difficult to use his material in practice, sometimes criticize Porter. Conducting the strategic analysis is an assignment that ranges from weeks to months depending on the investor’s prior knowledge and network and it includes a lot of footwork and reading. On the other hand, investing is a full-time job and who is to say that it should be easy? Furthermore, investors who apply the five forces get criticism from Porter for being too superficial when using the model. Reading the book is tough and applying the lessons from it is even tougher which drives investors to take shortcuts. Porter also stresses that change is vital while many use the five forces in a static way. One could argue that it's understanding whether the future of the business will be better or worse than the consensus view has it, that is the key question for investors as the rest should be built into the current share price.
My recommendation to the reader is to compile a couple of case studies of businesses while reading the book as this will lead to a better understanding of the framework. Before I read the book, I had heard that it was challenging - which was confirmed. I had also heard that it would be worth the effort, which I agree on as well. Fully grasping the ideas will potentially make the investor recognize the challenges of a business before the information is public which will lead to an important analytical edge.
Niklas Sävås, October 13, 2018
Porter is a Professor of Harvard University and Head of the Institute of Strategy and Competitive Strategy. He has written several pioneering books and papers and is possibly most renowned for Competitive Strategy and Competitive Advantage written five years later. He is a thought-leader and his material is widely used in academia worldwide and by practitioners as managers, consultants and investors. Porter has throughout his career worked as a consultant to help businesses improve their skills in making strategic decisions. He has studied hundreds of businesses in his research while teaching at Harvard Business School and has used much of that experience to produce his groundbreaking writings.
Competitive Strategy is divided into three parts. In the first part covering chapters one to eight, Porter presents a framework for how to analyze an industry and its competitors. His famous five forces, the key concept of the book, act as a base for the analysis. Chapters one, two, seven and eight are essential reading for both the investor and the manager as they present a foundation for how to think about competitive advantages on various levels while chapters three to six are more tilted towards managers and management consultants by giving hands-on information on how to device strategies. The management’s task is to develop strategies to strengthen the competitive advantage while the investor’s job is to analyze if management is doing the right things. In other words, management builds the competitive advantage and investors measure it. The second part of the book covers strategies for different industry structures as for example fragmented industries with many competitors and no dominating leader as well as emerging industries lacking stable rules. In the last part, again more interesting for managers and consultants, Porter presents several important strategic decisions that firms need to take and applies the ideas and lessons earlier described. Appendix 2 is also useful as it presents a hands-on way on how to conduct an analysis.
Investors, arguing that it’s too difficult to use his material in practice, sometimes criticize Porter. Conducting the strategic analysis is an assignment that ranges from weeks to months depending on the investor’s prior knowledge and network and it includes a lot of footwork and reading. On the other hand, investing is a full-time job and who is to say that it should be easy? Furthermore, investors who apply the five forces get criticism from Porter for being too superficial when using the model. Reading the book is tough and applying the lessons from it is even tougher which drives investors to take shortcuts. Porter also stresses that change is vital while many use the five forces in a static way. One could argue that it's understanding whether the future of the business will be better or worse than the consensus view has it, that is the key question for investors as the rest should be built into the current share price.
My recommendation to the reader is to compile a couple of case studies of businesses while reading the book as this will lead to a better understanding of the framework. Before I read the book, I had heard that it was challenging - which was confirmed. I had also heard that it would be worth the effort, which I agree on as well. Fully grasping the ideas will potentially make the investor recognize the challenges of a business before the information is public which will lead to an important analytical edge.
Niklas Sävås, October 13, 2018
September 2, 2015
Xây dựng một chiến lược cạnh tranh đòi hỏi nhiều số liệu, phân tích tinh vi và cả những dự đoán.
Trước khi tiếp xúc cuốn này, chỉ biết vài mô hình chiến lược cơ bản là Đường Giá Trị từ cuốn đại dương xanh, Ma Trận BCG, Ma Trận Mc Kinsey.
Còn ý tưởng chủ đạo của cuốn này xoay quanh 5 ÁP LỰC CANH TRANH và 3 CHIẾN LƯỢC CƠ BẢN (khác biệt hóa, chi phí thấp, tập trung chi phí hay tập trung khác biệt)
Trước giờ nghĩ một cách đơn giản rằng chỉ cần cạnh tranh với đối thủ trong ngành, hay xa hơn là những đối thủ tiềm năng gia nhập ngành, song có những yếu tố tác động tới việc HOẠCH ĐỊNH CHIẾN LƯỢC mà nhận ra được
(1) Sự vận động của ngành nó ảnh hưởng tới việc làm chiến lược, đơn giản vì nó tác động tới cung cầu: vận động này có thể là do cơ câu dấn số thay đổi nè (ít trẻ em hơn, nhiều đàn bà hơn...), do sự cải tiến công nghệ... lúc trước gửi thư bưu điện, giờ không còn nữa, lúc trước ra bưu điện gọi đi quốc tế, giờ không còn nữa.
(2) Cũng phải xây dựng chiến lược với nhà cung cấp và cả khách hàng. Nhà cung cấp đôi khi vị thế mặc cả cao, ra sức đẩy giá, còn khách hàng mua hàng của doanh nghiệp như siêu thị bán lẻ... có thể ép giá đòi chiết khấu. Nên việc doanh nghiệp khôn ngoan tìm đường hướng chiến lược để có LỢI THẾ ĐÀM PHÁN sẽ tạo ra một lợi thế cho DN.
(3) Trước khi đọc không biết rằng có rất nhiều loại ngành: ngành phân mảnh (ko ai chiếm thị phần quán 40%), ngành mới nổi, ngành bão hòa, ngành suy thoái, ngành công nghiệp toàn cầu... biết mình đang nằm trong ngành nào cũng giúp cho việc hoạch định chiến lược
(4) 3 quyết định chiến lược quan trọng đối với mọi doanh nghiệp đó là: 1. có nên tích hợp dọc ko 2. có nên mở rộng công suất ko. 3. có nên gia nhập một ngành mới.
Suy cho cùng, việc hoạch định chiến lược sẽ xoay qua MÔ HÌNH 5 ÁP LỰC CẠNH TRANH của Michael Porter. Song có thể tóm lại để hoạch định chiến lược, cần phải 5 HIỂU: hiểu rõ mình, hiểu rõ đối thủ, hiểu rõ ngành, hiểu rõ nhà cung cấp, hiểu rõ khách hàng. 5 đối tượng này tác động qua lại với nhau, gây ra những cường độ cạnh tranh. Sách đã cho rất nhiều công cụ, khung phân tích để chẩn đoán đối thủ, để nắm tín hiệu thị trường, để hiểu ngành.
Song, nếu nói một cản trở lớn để áp dụng cuốn này ra thực tiễn đó là DỮ LIỆU.
Trước khi tiếp xúc cuốn này, chỉ biết vài mô hình chiến lược cơ bản là Đường Giá Trị từ cuốn đại dương xanh, Ma Trận BCG, Ma Trận Mc Kinsey.
Còn ý tưởng chủ đạo của cuốn này xoay quanh 5 ÁP LỰC CANH TRANH và 3 CHIẾN LƯỢC CƠ BẢN (khác biệt hóa, chi phí thấp, tập trung chi phí hay tập trung khác biệt)
Trước giờ nghĩ một cách đơn giản rằng chỉ cần cạnh tranh với đối thủ trong ngành, hay xa hơn là những đối thủ tiềm năng gia nhập ngành, song có những yếu tố tác động tới việc HOẠCH ĐỊNH CHIẾN LƯỢC mà nhận ra được
(1) Sự vận động của ngành nó ảnh hưởng tới việc làm chiến lược, đơn giản vì nó tác động tới cung cầu: vận động này có thể là do cơ câu dấn số thay đổi nè (ít trẻ em hơn, nhiều đàn bà hơn...), do sự cải tiến công nghệ... lúc trước gửi thư bưu điện, giờ không còn nữa, lúc trước ra bưu điện gọi đi quốc tế, giờ không còn nữa.
(2) Cũng phải xây dựng chiến lược với nhà cung cấp và cả khách hàng. Nhà cung cấp đôi khi vị thế mặc cả cao, ra sức đẩy giá, còn khách hàng mua hàng của doanh nghiệp như siêu thị bán lẻ... có thể ép giá đòi chiết khấu. Nên việc doanh nghiệp khôn ngoan tìm đường hướng chiến lược để có LỢI THẾ ĐÀM PHÁN sẽ tạo ra một lợi thế cho DN.
(3) Trước khi đọc không biết rằng có rất nhiều loại ngành: ngành phân mảnh (ko ai chiếm thị phần quán 40%), ngành mới nổi, ngành bão hòa, ngành suy thoái, ngành công nghiệp toàn cầu... biết mình đang nằm trong ngành nào cũng giúp cho việc hoạch định chiến lược
(4) 3 quyết định chiến lược quan trọng đối với mọi doanh nghiệp đó là: 1. có nên tích hợp dọc ko 2. có nên mở rộng công suất ko. 3. có nên gia nhập một ngành mới.
Suy cho cùng, việc hoạch định chiến lược sẽ xoay qua MÔ HÌNH 5 ÁP LỰC CẠNH TRANH của Michael Porter. Song có thể tóm lại để hoạch định chiến lược, cần phải 5 HIỂU: hiểu rõ mình, hiểu rõ đối thủ, hiểu rõ ngành, hiểu rõ nhà cung cấp, hiểu rõ khách hàng. 5 đối tượng này tác động qua lại với nhau, gây ra những cường độ cạnh tranh. Sách đã cho rất nhiều công cụ, khung phân tích để chẩn đoán đối thủ, để nắm tín hiệu thị trường, để hiểu ngành.
Song, nếu nói một cản trở lớn để áp dụng cuốn này ra thực tiễn đó là DỮ LIỆU.
April 16, 2011
Michael Porter's book, Competitive Strategy, forms the basis for much of what is taught in a modern Business Strategy course in an MBA program. Porter lays a foundation for understanding an industry at a macro level. How is the industry structured? With few or many competitors, similarly sized or varied? Understanding the 'lay of the land' for an industry using Porter's framework provides a good schematic of the 'spaces' occupied by different firms. Clusters of firms that target the same customers form strategic groups.
The degree of overlapping space among firms in a group can be used to denote the intensity of rivalry. Groups characterized by larger spaces between firms potentially enjoy higher margins, while those tightly clustered fight for the same customers and are prone to price competition.
The ability for firms to move between strategic groups depends on the height of "mobility barriers" which define competition within the group. Some strategic groups are penetrable by new firms, while others are harder to break into due to characteristics such as high capital requirements, established brand names, distribution channels, etc.
One of Porter's insights is that industry structure is dynamic, and changes are driven by underlying trends affecting the industry, such as technology, substitute products, demographics, etc. The ability to foresee industry direction and evolution is very valuable in formulating strategy.
Understanding competitors is vital in predicting their likely reactions to competitive moves. How is each competitor business situated within its corporate parent (how does the business fit into the corporate portfolio, and how central is it to the firm's underlying strategy and goals)? Understanding the functional backgrounds of the company's directors and top executives often gives insight into how they will view the business and how they will react.
The degree of overlapping space among firms in a group can be used to denote the intensity of rivalry. Groups characterized by larger spaces between firms potentially enjoy higher margins, while those tightly clustered fight for the same customers and are prone to price competition.
The ability for firms to move between strategic groups depends on the height of "mobility barriers" which define competition within the group. Some strategic groups are penetrable by new firms, while others are harder to break into due to characteristics such as high capital requirements, established brand names, distribution channels, etc.
One of Porter's insights is that industry structure is dynamic, and changes are driven by underlying trends affecting the industry, such as technology, substitute products, demographics, etc. The ability to foresee industry direction and evolution is very valuable in formulating strategy.
Understanding competitors is vital in predicting their likely reactions to competitive moves. How is each competitor business situated within its corporate parent (how does the business fit into the corporate portfolio, and how central is it to the firm's underlying strategy and goals)? Understanding the functional backgrounds of the company's directors and top executives often gives insight into how they will view the business and how they will react.
September 9, 2013
Porter is the gold standard for MBA courses on Strategy. It's a very general book and it teaches you how about how to analyze different businesses depending on what their rivals, industry and market is doing, etc. For example, in looking at competitors, you would think about what their risks are, what their financial goals are , any economic/non-economic organizational values, what kind of managers are in their leadership ranks, etc - things that make them tick. This book teaches you how to think critically so that you can compare your business to others in the same industry. It is not an easy read though, especially as you go through and want to apply these to your own situation. You will need to spend time thinking and doing research in order to make the knowledge revealed in this book useful for your own purposes. But if you succeed, you will be way ahead of the curve!
December 8, 2024
Had to read for a class so maybe an unfair rating, since this book isn’t something I would ever have picked up on my own. It’s fine I guess, I just found it incredibly boring with too much terminology and not enough explanation or examples. It’s also nearly 45 years old, so some of the strategies discussed aren’t nearly as prevalent now.
April 27, 2025
4 stars cause it’s porter. You’re pretty much reading a textbook and not the well-written or entertaining kind. will see how much of this I retain but obviously good business book.
January 2, 2025
Manual de como pensar estratégia.
Negativos: escrita muito morosa, muita repetição de ideias.
Positivo: não há mais o que inventar. Tá tudo nesse livro.
Negativos: escrita muito morosa, muita repetição de ideias.
Positivo: não há mais o que inventar. Tá tudo nesse livro.
January 4, 2022
I did not expect that the first book I finished in 2022 is this one.
I studied engineering back in university but now I work in the business strategy team - I did not choose to work as a business strategist but somehow I was brought here. To deepen my understanding in the strategy world this book is a must-read. Just one sentence of my impression: I am still glad that I chose to study engineering at the university instead of business. ;)
The book is very structural, textbook-like, but is somehow to some extend outdated in today’s world. You can read it as a classical business strategy book and reference it when needed, but cannot fully depend on the methods and conclusions in the book to analyze today’s industries.
It reminds me of an idea I read from HBR's special issue on AI which was published in October 2021:
"In an AI-driven world, the requirements for competition have less to do with specialization and more to do with a universal set of capabilities in data sourcing, processing, analytics, and algorithm development. These new universal capabilities are reshaping strategy, business design, and even leadership. Strategies in very diverse digital and networked businesses now look similar, as do the drivers of operating performance. Industry expertise has become less critical."
In general I recommend this book as a classical textbook.
But I believe in the near future no business strategist can be an excellent one without profound knowlege of AI (at least you need to know how to tell a data scientist what you need).
I studied engineering back in university but now I work in the business strategy team - I did not choose to work as a business strategist but somehow I was brought here. To deepen my understanding in the strategy world this book is a must-read. Just one sentence of my impression: I am still glad that I chose to study engineering at the university instead of business. ;)
The book is very structural, textbook-like, but is somehow to some extend outdated in today’s world. You can read it as a classical business strategy book and reference it when needed, but cannot fully depend on the methods and conclusions in the book to analyze today’s industries.
It reminds me of an idea I read from HBR's special issue on AI which was published in October 2021:
"In an AI-driven world, the requirements for competition have less to do with specialization and more to do with a universal set of capabilities in data sourcing, processing, analytics, and algorithm development. These new universal capabilities are reshaping strategy, business design, and even leadership. Strategies in very diverse digital and networked businesses now look similar, as do the drivers of operating performance. Industry expertise has become less critical."
In general I recommend this book as a classical textbook.
But I believe in the near future no business strategist can be an excellent one without profound knowlege of AI (at least you need to know how to tell a data scientist what you need).
June 10, 2011
This is probably the best business book I have read. Although it was written over 30 years ago, nearly all of Porter’s points about analyzing industries are still relevant today. Because he establishes a foundational structure at a high enough level, in many cases it seems timeless.
Many of the points Porter makes seem obvious at first, but he backs up each assertion with specific examples and he outlines topics in such a structural manner that everything makes sense and fits together to build the larger picture of the nature of competition both within industries and world wide.
One area where the book does start to show its age is in its discussion of the impact of technology and globalization on industries and competition. Porter could not have foreseen the rapid growth in both of these factors and the dynamic ways they changed the landscape for competition.
Many of the points Porter makes seem obvious at first, but he backs up each assertion with specific examples and he outlines topics in such a structural manner that everything makes sense and fits together to build the larger picture of the nature of competition both within industries and world wide.
One area where the book does start to show its age is in its discussion of the impact of technology and globalization on industries and competition. Porter could not have foreseen the rapid growth in both of these factors and the dynamic ways they changed the landscape for competition.
July 27, 2018
Por fin lo he acabado, la información es buena pero yo tengo un problema con el estilo de los libros de negocios, me resultan aburridos y repetitivos.
Creo que pude leer la parte 3 y hubiera tenido un muy buen resumen del libro, el resto de los capítulos hubieran sido de consulta para profundizar.
Encontré más teoría que técnica, desde mi punto de vista.
At last I finished it, the information is good but I have a problem with the style of the business books, I find them boring and repetitive.
I think I could read part 3 and I would have had a very good summary of the book, the rest of the chapters would have been of consultation to deepen.
I found more theory than technique, from my point of view.
Creo que pude leer la parte 3 y hubiera tenido un muy buen resumen del libro, el resto de los capítulos hubieran sido de consulta para profundizar.
Encontré más teoría que técnica, desde mi punto de vista.
At last I finished it, the information is good but I have a problem with the style of the business books, I find them boring and repetitive.
I think I could read part 3 and I would have had a very good summary of the book, the rest of the chapters would have been of consultation to deepen.
I found more theory than technique, from my point of view.
July 22, 2014
Brilliant and comprehensive! A must read for consultants and managers to learn the basic strategies of business and avoid common pitfalls that seem common sense but give you much wisdom only in hindsight after having make the mistakes (if you haven't read about them already).
The book is an easy read but takes it will take time if you want to internalize well. But that time invested will hopefully be worth it! The examples are obviously dated but the concepts are perfectly applicable even today.
The book is an easy read but takes it will take time if you want to internalize well. But that time invested will hopefully be worth it! The examples are obviously dated but the concepts are perfectly applicable even today.
March 4, 2019
На самом деле я прочитал учебное пособие в 2-х частях о конкурентной разведке: http://globec.usue.ru/sobytiya/359-vy... Его просто не удалось найти здесь и правильно забить в прочитанные. Учебник свежий: просто , доступно и концентрированно. Советую изучение этой темы начинать именно с него, а дальше уже идти к мировым классикам в данном вопросе, расширяя вопрос , собственно, до Конкурентной Стратегии.
February 23, 2015
The key message in this book:
If you want to be the top dog in your industry, then you’re going to have to put in the time analyzing and understanding your competitors. Everything they do and everything they say can give you insights into how to anticipate their moves and get an edge on the competition.
If you want to be the top dog in your industry, then you’re going to have to put in the time analyzing and understanding your competitors. Everything they do and everything they say can give you insights into how to anticipate their moves and get an edge on the competition.
October 17, 2023
Wow. There are plenty of books that could have been blog posts or articles. This is NOT one of them. Approach this as a textbook. I will definitely need to reread it, as the information was laid on heavy and thick. While the examples are a bit dated (so much manufacturing back then!), the information is transferable and timeless.
January 1, 2022
متن کمی سنگینه و بعضی جاها تخصصی، اما واقعا برای کسی که دنبالشه یک منبع قوی و حرفه ایه.
November 17, 2024
It is an intellectual examination of strategy, that is thorough but hard to follow and remember as it is mostly an intellectual discussion of potential strategies but lacks examples to bring it to life and make it memorable
July 26, 2018
After reading this book, what i felt was Mr. Porter has brought a well defined crystal clear structure (framework) to competitive analysis. This book has provided the logic to those people who are responsible for formulating strategic decisions in any company.
The book has divided into three sections. The first section begins with the famous Porter's five force model and provides the general foundation through subsequent chapters. Section 2 explains the more specific analysis of strategy in important types of industry environments and the final section elaborates on three major strategic decisions such as vertical integration, capacity expansion and entry into new business.
The book has divided into three sections. The first section begins with the famous Porter's five force model and provides the general foundation through subsequent chapters. Section 2 explains the more specific analysis of strategy in important types of industry environments and the final section elaborates on three major strategic decisions such as vertical integration, capacity expansion and entry into new business.
April 8, 2024
An incredibly informative and very detailed book about competition and how to overcome it. While it's mostly written is simple English, there are some terms. If you can understand this sentence:
"Thus, it is possible for a firm to earn a book loss, but it be economically appropriate to remain in the business because the discounted cash flows exceeded the opportunity cost of capital on the investment that could be released if the business were divested."
you will be fine.
This book makes me wonder how valuable are the things we are though at school.
"Thus, it is possible for a firm to earn a book loss, but it be economically appropriate to remain in the business because the discounted cash flows exceeded the opportunity cost of capital on the investment that could be released if the business were divested."
you will be fine.
This book makes me wonder how valuable are the things we are though at school.
February 11, 2018
I think that reading this book is essential for executives and entrepreneurs.
The most important concepts in my option that you can learn from it are:
- The five forces of an industry: You will learn how to analyse and understand an industry to then position your company, and create a strategy that can help you win.
- The 3 general competitive strategies: cost leadership, differentiation and focus (niche).
- How to analyse a competitor moves.
The most important concepts in my option that you can learn from it are:
- The five forces of an industry: You will learn how to analyse and understand an industry to then position your company, and create a strategy that can help you win.
- The 3 general competitive strategies: cost leadership, differentiation and focus (niche).
- How to analyse a competitor moves.
March 8, 2022
Pretty much the default book for anything to do with strategy/markets in most B-Schools, this is the rare example of a book whose outlines & frameworks have pretty much proven rock solid for close to a century, and the principles for business outlined in this book remain as relevant today as they did in the initial heydays of American capitalism.
Must read for anyone interested to be involved in business/entrepreneurship.
Must read for anyone interested to be involved in business/entrepreneurship.
October 14, 2011
While the core concepts are important and I can understand why Porter's 5 Forces are such an integral part of business education, the actual book turned out the be excruciating. It doesn't help that the industries and examples are now decades old, but this is one of the first books in a long time I willfully and guiltlessly stopped reading.
June 12, 2016
I Love competition after reading this book
February 4, 2018
Study book but quite interesting
July 31, 2020
I’ve always had this book on my list but had a bit of fear to start it. Always seemed too technical and dense. Because of quarantine and the shortage of options on my library, I decided to finally face it.
And it was exactly what I expected: a very thoughtful and detailed book, yet very dense and hard to read. I’d say it is needed for people that are in business, but not a fun experience.
Why is it needed?
This book is the birth of nowadays business competitive strategy. Pretty much everything after it comes either to build upon its concepts or refute them. And if a book can live long enough as this one did, certainly there is some awesome content to be found on its pages.
After reading Sun Tzu last year I can easily say that this is the business analog. Porter teaches you how to “win the war” on a given industry and achieve better than average returns. And the cherry on the cake is the very easy to follow and apply framework of the 5 forces.
Although everything he writes seems obvious, the way he writes it and simplifies is what probably made this book a classic. Kudos also to his impeccable way of dividing the sections: first starting with the technique, secondly expanding on some common industry types and finishing it off with common strategic movements.
And why is it hard to read?
Too much detail, a lot of technical concepts and long chapters. Porter goes detail by detail and sometimes even repeats himself multiple times to make a point. I personally had a hard time to accomplish more than 20 pages per day.
Each page seems to weight a ton and the reading doesn’t progress as easy as other books. Definitely not a book to spare some time; if you’re not committed to it that’s certainly going to turn you off.
And finally: do I recommend it?
If you already have the habit of reading daily and have a business (or works for a company in a business related position/area): yes. This will open your eyes to some new thinking, even if you already know Porter’s theory.
If you are not part of the description above I would advise you to read something else. Probably the length and scope of this book will cause you to stop on the first pages.
And it was exactly what I expected: a very thoughtful and detailed book, yet very dense and hard to read. I’d say it is needed for people that are in business, but not a fun experience.
Why is it needed?
This book is the birth of nowadays business competitive strategy. Pretty much everything after it comes either to build upon its concepts or refute them. And if a book can live long enough as this one did, certainly there is some awesome content to be found on its pages.
After reading Sun Tzu last year I can easily say that this is the business analog. Porter teaches you how to “win the war” on a given industry and achieve better than average returns. And the cherry on the cake is the very easy to follow and apply framework of the 5 forces.
Although everything he writes seems obvious, the way he writes it and simplifies is what probably made this book a classic. Kudos also to his impeccable way of dividing the sections: first starting with the technique, secondly expanding on some common industry types and finishing it off with common strategic movements.
And why is it hard to read?
Too much detail, a lot of technical concepts and long chapters. Porter goes detail by detail and sometimes even repeats himself multiple times to make a point. I personally had a hard time to accomplish more than 20 pages per day.
Each page seems to weight a ton and the reading doesn’t progress as easy as other books. Definitely not a book to spare some time; if you’re not committed to it that’s certainly going to turn you off.
And finally: do I recommend it?
If you already have the habit of reading daily and have a business (or works for a company in a business related position/area): yes. This will open your eyes to some new thinking, even if you already know Porter’s theory.
If you are not part of the description above I would advise you to read something else. Probably the length and scope of this book will cause you to stop on the first pages.
September 18, 2022
This is not a weekend read by any means but it's one that should be in the "required" shelf for any business leader or entrepreneur. While this was written decades ago, the Harvard Business School Author addresses the "5 Forces" in this landmark work which is just as relevant today as it was when it was written (maybe even moreso!).
As business leaders, we're used to thinking of competition in terms of something we have no control over. Factually, the business leaders in a marketplace have quite a number of tools at their arsenal when new competition arrives (or even sandbagging existing competition). There's a LOT of food for thought in this tome, read it slow and steadily since it'll easily give you an edge in thinking of competitive analysis and market encroachment, etc.
I find it fascinating that the barriers to entry aren't just thought of by the author as a specific "thing," as most of us would. In manufacturing, we think of the cost to setup a plant as a barrier to entry. But that's just one of the forces which changes the dynamic of competition, the most notable problems exist for those who are selling commodities over something of a very unique value.
This pops the newer idea balloon of an idea of having a Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant in a way. But I think as business leader, both approaches need to be reviewed, and understood well, before attempting to enter the market place or changing a market position.
Again, 100% necessary read.
As business leaders, we're used to thinking of competition in terms of something we have no control over. Factually, the business leaders in a marketplace have quite a number of tools at their arsenal when new competition arrives (or even sandbagging existing competition). There's a LOT of food for thought in this tome, read it slow and steadily since it'll easily give you an edge in thinking of competitive analysis and market encroachment, etc.
I find it fascinating that the barriers to entry aren't just thought of by the author as a specific "thing," as most of us would. In manufacturing, we think of the cost to setup a plant as a barrier to entry. But that's just one of the forces which changes the dynamic of competition, the most notable problems exist for those who are selling commodities over something of a very unique value.
This pops the newer idea balloon of an idea of having a Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant in a way. But I think as business leader, both approaches need to be reviewed, and understood well, before attempting to enter the market place or changing a market position.
Again, 100% necessary read.
January 3, 2021
I had low expectations for this book as I find most "business analysis" books to be mostly conjecture with little analytical rigor. However, after reading it I can see why it's a classic. Although Porter's Five Forces are well known throughout the business world, and there does not seem to be much empirical evidence for their usefulness, what this book provides is an exhaustive checklist of ways to think about and analyze a business. If thought of as research manual, it is useful (albeit quite long and dry). The book is also sprinkled with various business strategy examples, which are perhaps the best parts. Key takeaways for me are:
FIVE FORCES
1. Threat of entry - affected by
1) barriers to entry such as a) economies of scale b) product differentiation c) capital requirements d) switching costs e) distribution access f) cost disadvantages by incumbents unrelated to scale (such as proprietary knowledge, favorable access to raw materials/locations, etc.)
2) government policy
3) entry-deterring price (risk/reward of entry based on expected profits vs. retaliation of existing firms)
4) other entry barriers such as a) change in barriers b) strategic decisions which change barriers c) existing skills which may help overcome those barriers
5) scale and experience (may have tradeoffs with innovation, flexibility, differentiation perception)
2. Intensity of rivalry among existing firms - generally certain characteristics lead to higher rivalry:
1) Important to remember rivalry may leave entire industry better off (price competition) or worse off (ads raising awareness of the industry as a whole)
2) High # of equal competitors means (fragmented AND equal market share)
3) Slow industry growth (less of a growing pie for people to collect as the rising tide which lifted all boats now slowing)
4) High fixed/storage costs (since incremental units matter a lot and fixed costs can't be taken out, more pressure to lower price and raise sales to recoup)
5) Lack of differentiation/switching costs
6) Capacity has to be added in large increments (high commitment, big supply influx all at once)
7) Diverse competitors with different operational setups (hard to read intentions of each other)
8) High strategic stakes (profit my not be near or intermediate goal)
9) High exit barriers (supply never gets taken out)
3. Pressures from substitute products - limits the ability to capture excess profits in boom times because supply response is quick and copycats arise. Most especially have to pay attention to substitute products that 1) trending towards higher price-performance 2) produced by industries earning high profits
4. Bargaining power of customers/buyers - high bargaining power from customers/buyers arise in situations where
1) The buyer represents significant % of seller sales
2) The product represents a significant % of buyer costs (small components which represent small % of overall product price more resistant since putting price pressure on these doesn't do as much for the buyer's overall profits)
3) The product is undifferentiated
4) Buyer has few switching costs (related to 3)
5) Buyer generates low profits (less margin to go around in the supply chain)
6) Buyer pose credible threat of backward vertical integration (GM/Ford could do this themselves)
7) The product is unimportant to the quality of the buyer's product
8) The buyer has full information
Important to also consider industry trends for the buyer (for example, as retailers became concentrated to department stores, the buying power of the downstream increased substantially)
5. Bargaining power of suppliers - similar in many ways to the buyers. Bargaining power high among suppliers if:
1) Suppliers are concentrated and industry is dominated by few players
2) No substitutes
3) Your industry not a meaningful % of supplier business
4) Supplier's product is important to your business
5) Supplier's product is differentiated or has switching costs
6) Supplier can forward integrate vertically (move into distribution, storefronts)
Labor is a supplier as well
FIVE FORCES
1. Threat of entry - affected by
1) barriers to entry such as a) economies of scale b) product differentiation c) capital requirements d) switching costs e) distribution access f) cost disadvantages by incumbents unrelated to scale (such as proprietary knowledge, favorable access to raw materials/locations, etc.)
2) government policy
3) entry-deterring price (risk/reward of entry based on expected profits vs. retaliation of existing firms)
4) other entry barriers such as a) change in barriers b) strategic decisions which change barriers c) existing skills which may help overcome those barriers
5) scale and experience (may have tradeoffs with innovation, flexibility, differentiation perception)
2. Intensity of rivalry among existing firms - generally certain characteristics lead to higher rivalry:
1) Important to remember rivalry may leave entire industry better off (price competition) or worse off (ads raising awareness of the industry as a whole)
2) High # of equal competitors means (fragmented AND equal market share)
3) Slow industry growth (less of a growing pie for people to collect as the rising tide which lifted all boats now slowing)
4) High fixed/storage costs (since incremental units matter a lot and fixed costs can't be taken out, more pressure to lower price and raise sales to recoup)
5) Lack of differentiation/switching costs
6) Capacity has to be added in large increments (high commitment, big supply influx all at once)
7) Diverse competitors with different operational setups (hard to read intentions of each other)
8) High strategic stakes (profit my not be near or intermediate goal)
9) High exit barriers (supply never gets taken out)
3. Pressures from substitute products - limits the ability to capture excess profits in boom times because supply response is quick and copycats arise. Most especially have to pay attention to substitute products that 1) trending towards higher price-performance 2) produced by industries earning high profits
4. Bargaining power of customers/buyers - high bargaining power from customers/buyers arise in situations where
1) The buyer represents significant % of seller sales
2) The product represents a significant % of buyer costs (small components which represent small % of overall product price more resistant since putting price pressure on these doesn't do as much for the buyer's overall profits)
3) The product is undifferentiated
4) Buyer has few switching costs (related to 3)
5) Buyer generates low profits (less margin to go around in the supply chain)
6) Buyer pose credible threat of backward vertical integration (GM/Ford could do this themselves)
7) The product is unimportant to the quality of the buyer's product
8) The buyer has full information
Important to also consider industry trends for the buyer (for example, as retailers became concentrated to department stores, the buying power of the downstream increased substantially)
5. Bargaining power of suppliers - similar in many ways to the buyers. Bargaining power high among suppliers if:
1) Suppliers are concentrated and industry is dominated by few players
2) No substitutes
3) Your industry not a meaningful % of supplier business
4) Supplier's product is important to your business
5) Supplier's product is differentiated or has switching costs
6) Supplier can forward integrate vertically (move into distribution, storefronts)
Labor is a supplier as well
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