After Competitive Advantage and Competitive Advantage of Nation, DT Books Company continues to release Michael Porter's third book called Competitive Strategy. . This trilogy of his works is considered a bedside book for business administrators and policy makers. We would like to respectfully introduce to readers the Introduction of the book's author.
This book marks an important place in my research life. It is based on my research and teaching in the economics of industrial organization and in competitive strategy. Competitive strategy is an important area for managers and depends largely on an understanding of the industry and competitors. However, the field has very few analytical tools, and those tools lack breadth and comprehensiveness. In contrast, because economists have long studied industry structure but mainly from a public policy perspective, economic research does not address the concerns of managers.
As a researcher and teacher of both business strategy and industrial economics, my work at Harvard Business School over the past decade has sought to fill this gap. The origin of the book is my research on industrial economics, starting from my doctoral thesis. The book was compiled when I prepared the materials for use in the business policy course at the school in 1975 and when I developed the Industrial Analysis and Competitive Analysis course to teach to students. MBA and management students over the past few years. I rely not only on traditional statistical research but also on research in hundreds of disciplines, results from preparing teaching materials, from personal research, and guiding industry research by groups of students. MBA student, as well as experience working with US and international companies.
The book is written for practitioners who need to develop strategies for specific businesses and for scholars who want to understand competition better. It is also aimed at other readers who want to understand the industry and their competitors. Competitive analysis is important not only for business strategy planning but also for corporate finance, marketing, stock analysis and many other business fields. I hope the book will provide valuable knowledge for practical practitioners in many different departments and organizational levels.
I also hope the book will contribute to the development of sound public policy towards competition. The book “competitive strategy” examines how a business can compete more effectively to strengthen its position in the market. Any such strategy must be implemented within the context of the rules of the game with socially desirable competitive behaviors, established in the form of ethical standards or through public policies. The rules of the game cannot achieve their desired effects if they do not accurately predict how firms will respond strategically to competitive opportunities and threats.
I received considerable help and support while working on this book. Harvard Business School has created favorable conditions for conducting research; Deans Lawrence Fouraker and John McArthur have provided invaluable input, assistance, and, most importantly, encouragement from the beginning. The school's research department supported most of the research costs, in addition to financial support from the General Electric Foundation. Richard Rosenbloom, director of the Research Department, is not only a patient investor but also a valuable source of opinion.
This research could not have been completed without the efforts of a group of talented and dedicated research associates who worked with me over the past five years to conduct industry research and prepare documents. . Jessie Bourneuf, Steven J. Roth, Margaret Lawrence, and Neal Bhadkamkar – all MBA students at Harvard – each spent at least a year working full-time with me on this research.
I also gained much insight from the work of some of my doctoral students in the field of competitive strategy. Kathryn Harrigan's work on declining industries is a major contribution to chapter 12. Research by Joseph DCruz, Nitin Mehta, Peter Patch, and George Yip also enriches my understanding of important themes in this book.
My colleagues at Harvard and associates in outside firms also played central roles in developing the book. Research I co-authored with Richard Caves, an esteemed friend and colleague, has made an important contribution to this book; Richard also provided insightful comments on the entire manuscript. Members of the business policy faculty at Harvard, especially Malcolm Salter and Joseph Bower, helped sharpen my thinking and provided valuable assistance. Catherine Hayden, vice president of Strategic Planning Associates, suggested many ideas, in addition to providing comments on the entire manuscript. Joint research and countless discussions with Michael Spence have enhanced my understanding of strategy. Richard Meyer taught the Industry Analysis and Competitive Analysis course with me and pushed my thinking in many areas. Mark Fuller has been helpful while working with me on industry research. Thomas Hout, Eileen Rudden and Eric Vogt – all experts at the Boston Consulting Group – contributed to chapter 13. Others provided encouragement and helpful comments on the draft at various stages including professors John Lintner, C. Roland Christensen, Kenneth Andrews, Robert Buzzell and Norman Berg; as well as John Nils Hanson (Gound corporation), John Forbus (McKinsey and Company) and my editor, Robert Wallace.
I am also grateful to Emily Feudo and especially Sheila Barry, both of whom worked on the manuscript and helped me clear my mind and be productive as I conducted this research. Finally, I want to thank my students in the Industry Analysis and Competitive Analysis, Business Policy, and Practical Research in Industry Analysis courses for their perseverance as “test subjects” when "digesting" the concepts in the book, but more importantly because of their enthusiasm for learning these ideas and helping me sharpen my thinking in many different ways.
Michael E. Porter
