"Three overarching game plans that work in one industry after another explain how thousands of real-world competitors come out on top."

--Fortune

"American executives are grasping for a logic to global competition. Mr. Porter... has given them one."

--The New York Times

"Few books warrant the too-common publisher’s blurb ’landmark.’ This one does. Highest recommendation."

--Choice

"Represents a quantum leap...may well be one of the most impor tant contributions to the discipline of strategic management."

--Strategic Management Journal

"Any manager who studies and uses the material in this book should be able to devise more successful strategies."

--Journal of Business Strategy

When Competitive Strategy was first published eighteen years ago, I hoped that it would have an impact. There were reasons to hope, because the book rested on a body of research that had stood the test of peer review, and the draft chapters had survived the scrutiny of my MBA and executive students.

The reception of the book and the role it has played in launching a new field, however, exceeded my most optimistic expectations. Most business school students around the world are exposed to the ideas in the book, invariably in core courses on policy or strategy, but often in specialized elective courses on competitive strategy and also in fields such as economics, marketing, technology management, and information systems. Practitioners in both large and small companies have internalized the ideas, as I learn from numerous thoughtful letters, personal conversations, and now E-mails. Most strategic consultants use the ideas in the book, and entire firms have emerged to assist companies in employing them. Budding financial analysts must read the book prior to certification.

Introduction

Preface

Introduction, 1980

PART I General Analytical Techniques

CHAPTER 1  THE STRUCTURAL ANALYSIS OF INDUSTRIES

      Structural Determinants of the Intensity of Competition 

      Structural Analysis and Competitive Strategy 

      Structural Analysis and Industry Definition 

CHAPTER 2 GENERIC COMPETITIVE-STRATEGIES

      Three Generic Strategies 

      Stuck in the Middle 

      Risks of the Generic Strategies 

CHAPTER 3  A FRAMEWORKFOR COMPETITOR ANALYSIS

      The Components of Competitor Analysis 

      Putting the Four Components Together--The Competitor Response Profile 

      Competitor Analysis and Industry Forecasting 

      The Need for a Competitor Intelligence System 

CHAPTER 4  MARKET SIGNALS

      Types of Market Signals 

      The Use of History in Identifying Signals 

      Can Attention to Market Signals Be a Distraction? 

CHAPTER 5  COMPETITIVE MOVES

      Industry Instability: The Likelihood of Competitive Warfare

      Competitive Moves 

      Commitment 

      Focal Points 

      A Note on Information and Secrecy  "

CHAPTER 6 STRATEGY TOWARD BUYERS AND SUPPLIERS

      Buyer Selection  

      Purchasing Strategy  

CHAPTER 7 STRUCTURAL ANALYSISWITHIN INDUSTRIES

      Dimensions of Competitive Strategy Strategic Groups 

      Strategic Groups and a Firm’s Profitability 

      Implications for Formulation of Strategy 

      The Strategic Group Map as an Analytical Tool

CHAPTER 8  INDUSTRY EVOLUTION

      Basic Concepts in Industry Evolution 

      Evolutionary Processes

      Key Relationships in Industry Evolution

PART II Generic Industry Environments

CHAPTER 9  COMPETITIVE STRATEGY IN FRAGMENTED INDUSTRIES

      What Makes an Industry Fragmented?  

      Overcoming Fragmentation 

      Coping with Fragmentation 

      Potential Strategic Traps 

      Formulating Strategy 

CHAPTER 10 COMPETITIVE STRATEGY IN EMERGING INDUSTRIES

      The Structural Environment 

      Problems Constraining Industry Development 

      Early and Late Markets 

      Strategic Choices 

      Techniques for Forecasting 

      Which Emerging Industries to Enter 

CHAPTER 1 1 THE TRANSITION TO INDUSTRY MATURITY

      Industry Change during Transition

      Some Strategic Implications of Transition 

      Strategic Pitfalls in Transition 

      Organizational Implications of Maturity 

      Industry Transition and the General Manager 

CHAPTER 12 COMPETITIVE STRATEGY IN DECLINING INDUSTRIES

      Structural Determinants of Competition in Decline 

      Strategic Alternatives in Decline 

      Choosing a Strategy for Decline 

      Pitfalls in Decline 

      Preparing for Decline 

CHAPTER 13 COMPETITION IN GLOBAL INDUSTRIES

      Sources and Impediments to Global Competition 

      Evolution to Global Industries 

      Competition in Global Industries 

      Strategic Alternatives in Global Industries 

      Trends Affecting Global Competition 

PART III Strategic Decisions

CHAPTER 14 THE STRATEGIC ANALYSIS OF VERTICAL INTEGRATION

      Strategic Benefits and Costs of Vertical Integration 

      Particular Strategic Issues in Forward Integration 

      Particular Strategic Issues in Backward Integration 

      Long-Term Contracts and the Economics of Information 

      Illusions in Vertical Integration Decisions 

CHAPTER 15 CAPACITY EXPANSION

      Elements of the Capacity Expansion Decision 

      Causes of Overbuilding Capacity Preemptive Strategies 

CHAPTER 16 ENTRY INTO NEW BUSINESSES

      Entry through Internal Development

      Entry through Acquisition 

      Sequenced Entry 

APPENDIX A PORTFOLIO TECHNIQUES IN COMPETITOR ANALYSIS

APPENDIX B How TO CONDUCT AN INDUSTRY ANALYSIS

      Bibliography

      Index

      About the Author