Competitive Advantage

Michael E. Porter
The Free Press, 1985
557 pages
"Competitve Advantage" is a successor to Michael A. Porter's earlier book "Compatitive Strategy" The book reflects his deepening belief that the failure of many firms' strategies stem from an inability to translate a broad competitive advantage into the specific action steps required to gain competitive advantage. He concepted his book to build a bridge between strategy formulation and implementation. It is this book where he introduced the famous value chain model.
Competitive advantage grows fundamentally out of a value a firm is able to create for its buyers that exceeds the firm's cost of creating it. Value is what buyers are willing to pay, and superior value stems from offering lower prices than competitors for equivalent benefits or providing unique benefits that more than offset a higher price Michael A. Porter
The three generic strategies for achieving competive advantage in "Competitive Strategy" were:
Cost leadership
- Differentiation
- Focus
"Competitive Advantage" focuses on how a firm actually puts this generic stragies into action:
- How does a firm gain a sustainable cost advantage?
- How can a firm differntiate itself from competitors?
- How does a firm choose a segment so that competitive advantage grows out of focus strategy?
- When and how can a firm gain competitive advantage from competing with a coordinated strategy in related industries?
- How is uncertainty introduced into the pursuit of competitive advantage?
- How can a firm defend its competitive position ?
Contents of book
- Competitive Advantage: The Core Concepts
- The Value Chain and Competitive Advantage
- Cost Advantage
- Differentiation
- Technology and Competitve Advantage
- Competitor Selection
- Industry Segmentation and Competitve Advantage
- Substitution
- Interrelationships among Business Units
- Horizontal Strategy
- Achieving Interrelationships
- Complementary Products and Competitive Advantage
- Industry Scenarios and Competitve Strategy under Uncertainty
- Defensive Strategy
- Attacking an Industry Leader
PART 1 Principles of Competive Advantages
PART II Competitive Scope within an Industry
PART III Corporate Strategy and Competitive Advantage
PART IV Implications for Offensive and Defensive Competitive Strategy