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

  1. Competitive Advantage: The Core Concepts
  2. PART 1 Principles of Competive Advantages

  3. The Value Chain and Competitive Advantage
  4. Cost Advantage
  5. Differentiation
  6. Technology and Competitve Advantage
  7. Competitor Selection
  8. PART II Competitive Scope within an Industry

  9. Industry Segmentation and Competitve Advantage
  10. Substitution
  11. PART III Corporate Strategy and Competitive Advantage

  12. Interrelationships among Business Units
  13. Horizontal Strategy
  14. Achieving Interrelationships
  15. Complementary Products and Competitive Advantage
  16. PART IV Implications for Offensive and Defensive Competitive Strategy

  17. Industry Scenarios and Competitve Strategy under Uncertainty
  18. Defensive Strategy
  19. Attacking an Industry Leader