As an active Business Consultant I'm often appalled at the lack of disregard for the importance of strategy. It's a matter of life and death (at least for your company).

"Vision without action is a daydream. Action without vision is a nightmare." - Japanese proverb


Why read a book on strategy? Quite simply, to be successful. Technology and globalization culminated in ferocious competition for virtually all industries. Since industry forces, like ocean tides, loom large over the success on any individual business, it is wise to carefully study business strategy.

Competitive Strategy is part one of Michael Porter's trilogy, providing a foundation for Competitive Advantage: Creating and Sustaining Superior Performance, and The Competitive Advantage of Nations.

Two main themes are Porter's analysis of industries, which captures the complexity of industry competition in five underlying forces and his three generic strategies -- lowest cost, differentiation, and focus. In this book, Porter presents a whole new perspective on how profit is created and divided.

As technology fads and Internet business models come and go, every company must still address the basics of competition as outlined within this book.

The book consists of three parts - General Analytical Techniques, Generic Industry Environments, and Strategic Decisions. In addition, the two appendices - Portfolio Techniques in Competitor Analysis, and How to Conduct an Industry Analysis - should also be mentioned, as they are very useful.

Part I, Porter discusses the structural analysis of industries (with the world-famous five forces), the three generic competitive strategies (overall cost leadership, focus, and differentiation). Also he discusses an excellent framework for competitor analysis, competitive moves, strategy toward buyers and suppliers, structural analysis within industries (strategic groups, strategic mapping, mobility barriers), and industry evolution (life cycle, evolutionary processes).

In Part II, Porter discusses competitive strategy within various generic industry environments, such as fragmented industries (with no real market leader), emerging industries (e-commerce and Internet are excellent examples, although not mentioned in this book as it was written in 1980), mature industries, declining industries, and global industries.

In Part III, Porter discusses strategic decisions which businesses/firms can take, such as vertical integration (forward, backward, partnerships), capacity expansion, and entry into new industries/businesses.

In summary, it is your responsibility, as a business owner or senior manager, to lead your company into the future by identifying and seizing possibilities. Competitive Strategy helps you understand the competitive forces within an industry and the strategic steps a company can take to enhance its competitive position.

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Michael Davis, President - Brencom Strategic Business Consulting

Understanding the strengths an weaknesses of your competition is the key to just about any field where success is winning over someone else. This book does an excellent job of showing how to evaluate your own strengths and limitations. Finding un-tapped markets and finding the best strategy to tap into them is what this book is about. The book also shows the pitfalls you can get into if you don't focus your market and market to everyone. Highly recommended to business students as well as seasoned businessmen. The sound basics taught in this book can improve the probability of success in your pursuits of profits.

When this book was published for the first time over twenty years ago, it changed the way that people thought about strategy in business, and it gave us what has become a common language for discussing strategic situations. That's why you should consider buying the book. Without an understanding of the terminology that Michael Porter developed originally in Competitive Strategy, you won't be able to follow many of the arguments that other people use when they're talking about the subject.

When you get past that, you need to ask yourself your primary reason for reading any book on strategy. If you're looking for a "how-to" book, one with ideas that you can implement reasonably quickly, this is not the book for you. This is written by a professor and the presentation is academic. That doesn't make the insights any less valuable, but often it makes them harder to unearth.

Here's my recommendation. You should be familiar enough with Porter's basic methods and terminology to recognize and understand them in other books, articles, and discussions. If you don't have that knowledge now, buy this book and develop that understanding.

If you already have a basic knowledge of some of Porter's terminology and concepts, then this book will give you an excellent structural underpinning to take to the other books about strategy. But, if you're looking for something that you can dip into quickly to work on your company's strategic plan, find something a little less dense and academic.

This seminal book is a classic and ought to be read by anyone in business. Michael E. Porter's ideas on competitiveness have lost little relevance despite the fact that he first advanced them in this book in 1980. They have now become so much a part of business practice and business language that one reads the book more with a sense of recognition than a sense of discovery. His prose style is clear and straightforward, albeit somewhat plodding, and the book can tend to repeat itself. However, Porter's clarity is a welcome change from the murk you encounter in many other books on business strategy, and his repetition serves a useful pedagogical purpose. We highly recommend this excellent book. If you're in business, it's relevant.

This is one of the foundation books of the modern business education. Yes, it was written over twenty years ago and you cannot take a business course anywhere without the term "Porter's Five Forces" not at least being mentioned. But, really, this book is still completely relevant and should be on every businessperson's bookshelf, front and center.

For a concept that has so much a place in b-school discussions, you might think the book focuses on the 5-forces, but it is only a small part of the book. It outlines the Generic Competitive Strategies (again, a now well known topic), Competitor Analysis (extremely valuable), Market Signals, Competitive Moves, and so much more.

The book is in three parts, General Analytical Techniques, Generic Industry Environments, and Strategic Decisions. There is an appendix on Portfolio Techniques in Competitor Analysis, and a very useful appendix on How to Conduct an Industry Analysis.

I think a lot of times this book is not given as active a place in the pantheon as it deserves because so many books and articles are recycling a lot of what was in this book and most don't add much to the discussion. Honestly, this book is worth referring to over and over and over again. It is a tool or a weapon in your competitive war chest that needs to be kept active and in play.