37 of 38 people found the following review helpful
Framework for activities within a business,
By A Customer
This review is from: The Competitive Advantage (Hardcover)
Michael Porter is a Harvard Business School professor and a leading authority on competition and strategy. This book builds on his initial 1980-book 'Competitive Strategy', which focuses on the industries surrounding businesses (summary of 'Competitive Strategy' is Chapter 1!). In this book, 'Competitive Advantage', Porter focuses on the business itself. The book is based on the activity-based theory of the firm. Activities are what generate cost and create value for buyers/customers, and are the basic units for competitive advantage.
'Competitive Advantage' consists of four parts - Principles of Competitive Advantage, Competitive Scope within an Industry, Corporate Strategy and Competitive Advantage, and Implications for Offensive and Defensive Competitive Strategy. Part I introduces the concept of the value, which is a general framework for thinking about the activities involved in any business and assessing their relative costs and role in differentiation. Then Porter explains the impact of the value chain on cost advantage, differentiation, technology and competitors. Part II discusses industry segmentation and substitution. Part III explains the interrelationships among business units and their impact on horizontal strategy, achievement of interrelationships, and complementary products. Part IV discusses industry scenarios under uncertainty, defensive strategy, and attacks on industry leaders.
Although some parts of the book are somewhat outdated, I would say that many modern management books are based on this book. It is a very useful introduction into activities within businesses and is written in simple US-English.