Understanding Michael Porter: The Essential Guide to Competition and Strategy
Magretta, Joan. Understanding Michael Porter: The Essential Guide to Competition and Strategy. Harvard Business Review Press, 2011. Kindle file.
the publication of his groundbreaking classics, Competitive Strategy (1980) and Competitive Advantage (1985),
as Mark Twain once observed, is that they are often books “that everybody wants to have read and nobody wants to read.”
The most common error of all is that competitive success comes from “being the best.”
Only by competing to be unique can an organization achieve sustained, superior performance.
It’s a broader struggle over profits, a tug-of-war over who will capture the value an industry creates.
competitive advantage allows you to follow the precise link between the value you create, how you create it (your value chain), and how you perform (your P&L).
only if the best set of activities to deliver it is different from the activities performed by rivals.
Part One: What Is Competition?
1. Competition: The Right Mind-Set > 264
Strategy explains how an organization, faced with competition, will achieve superior performance.
2. The Five Forces: Competing for Profits > 495
industry structure is surprisingly sticky. Despite the prevailing sense that business changes with incredible rapidity, Porter discovered that industry structure—once an industry passes beyond its emerging, prestructure phase—tends to be quite stable over time. New products come and go. New technologies come and go. Things change all the time. But structural change—and therefore change in the average profitability of an industry—usually takes a long time.
2. The Five Forces: Competing for Profits > 531
Costs include all of the resources used in competing, including the cost of capital. These are the resources that the industry transforms to create value. Prices reflect how customers value the industry’s offerings, what they are willing to pay as they weigh their alternatives.
Part Two: What Is Strategy?
6. Fit: The Amplifier > 1908
fit means that the value or cost of one activity is affected by the way other activities are performed.
6. Fit: The Amplifier > 1929
the role of the designers is to spot trends and copy them. Rather than pay big-name designers big bucks to create something new, the company has scouts around the world looking for the latest fashion trends at shows and in nightclubs. Its large team of in-house designers can create a new collection in under a month and can modify existing collections in a couple of weeks. The size of the team allows Zara to be a fast copier, getting those new designs into production quickly.
7. Continuity: The Enabler > 2353
IKEA’s founder, Ingvar Kamprad, started his company in 1943, but he didn’t actually open a store until 1958, and it wasn’t until the mid-1960s that IKEA tested its signature self-service store design.
Epilogue: A Short List of Implications
Calvino, is a work “that has never finished saying what it has to say.”