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Porter, M. E. 1980. Competitive Strategy: Techniques

for Analyzing Industries and Competitors. The Free
Press.
Preface, Introduction, and Links to Chapter Summaries 1-16

Summary by James R. Martin, Ph.D., CMA

Professor Emeritus, University of South Florida

Strategy Main Page | Balanced Scorecard Main Page

Preface and Introduction

Preface Introduction

Part I. General Analytical Techniques

Chapter 1: The Structural Analysis of Chapter 2: Generic Competitive

Industries Strategies

Chapter 3: A Framework for Chapter 4: Market Signals

Competitor Analysis

Chapter 5: Competitive Moves Chapter 6: Strategy Toward Buyers

and Suppliers

Chapter 7: Structural Analysis Within Chapter 8: Industry Evolution

Industries

Part II. Generic Industry Environments

Chapter 9: Competitive Strategy in Chapter 10: Competitive Strategy in

Fragmented Industries Emerging Industries

Chapter 11: The Transition to Chapter 12: Competitive Strategy in

Industry Maturity Declining Industries

Chapter 13: Competition in Global

Industries

Part III. Strategic Decisions

Chapter 14: The Strategic Analysis of Chapter 15: Capacity Expansion

Vertical Integration

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Chapter 16: Entry into New

Businesses + Appendixes

Preface

Porter explains how the book grew out of his research and teaching at the Harvard
Business School, the motivation for the book, and also mentions the groups and
individuals who helped make the book possible. His motivation for the book was
essentially the lack of research addressed to the concerns of business managers and
the subsequent need for more information and analytical techniques to help
practitioners and scholars understand competition and competitive strategy.

Introduction

Every firm has a competitive strategy although some strategies are implicit rather
than explicit. However, there are significant benefits available to firms that engage
in the explicit process of developing a strategy. This book presents a
comprehensive framework for analyzing a firm's industry, its competitors, and its
own position so that it can develop a competitive strategy.

Part I provides a framework for analyzing the structure of an industry (five

competing forces), and its competitors.

Part II shows how to develop a competitive strategy using the framework described
in Part I.

Part III completes the framework by examining various types of strategic decisions
such as vertical integration, capacity expansion, and entering new businesses.

Porter provides four figures to illustrate and review the classic approach to the
formulation of strategy. Figure 1-1, shows what he refers to as the wheel of
competitive strategy. The hub shows the firm's goals, mission, or objectives. The
spokes represent the firm's key operating policies. Like a wheel, the policies
(spokes) must be connected to each other and reflect the goals of the firm (the
hub).

Figure 1-2 includes the four factors that determine what the firm can successfully
accomplish. On the left hand side, the firm's strengths and weaknesses are related
to its assets and skills. These together with the personal values of the firm's key
members (implementers) determines the limits to competitive strategy from an
internal perspective. On the right-hand side, the industry environment together with
broad societal factors (government policy, social concerns, etc.) determines the
firm's external limits.

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Figure 1-3 provides a list of questions to test the firm's goals and policies for
internal consistency (e.g., Are the goals mutually achievable?), environmental fit
(e.g., Do the goals and policies exploit industry opportunities), resource fit (e.g.,
Do the goals and policies match the resources available to the firm relative to
competitors), and communication and implementation (Are the goals well
understood by the key implementers?).

Figure 1-4 provides three main groups of questions related to the process of
formulating a competitive strategy.

Group A: What is the business doing now? (Identification, and assumptions).

Group B: What is happening in the environment? (Industry, competitors,

societal, and strengths and weaknesses).

Group C: What should the business be doing? (Test assumptions and

strategy, strategy alternatives, strategic choice).

The purpose of the book is to show how to answer these questions.

__________________________________________________

Go to Chapter 1: The Structural Analysis of Industries

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