How and why organizations can achieve and then sustain competitive advantage, especially in turbulent and uncertain times
Although this book offers – in my opinion — the single best introduction to the major insights of Michael Porter, other than an extended period of one-on-one time with him during which he explains them himself, Joan Magretta also offers other invaluable business information, insights, and wisdom within a much larger context. Those who have read her earlier business classic, What Management Is: How It Works and Why It’s Everyone’s Business, already know that she possesses highly-developed perspectives on both the scope and depth of business, and, the specific details (and relevance thereof) of what management is and does as well as how its core competencies can be developed and then applied to achieve sustainable high-impact and superior performance.
Her brilliant analysis of Porter and his major contributions includes:
o How to develop the right mind-set for competition
o “The Five Competitive Forces That Shape Strategy”
o How and why a value chain can be a decisive competitive advantage
o What the “core” is and how it can help to create value
o How and why trade-offs are strategy’s “linchpin”
o How and why the value or cost of one activity is affected by how other activities are performed
o How and why continuity enables development of competitive advantage
The coverage of Porter material includes an Epilogue that consists of “A Short List of Implications, followed by Magretta’s interview of Porter and a “A Porter Glossary: Key Concepts.”
All this would be more than sufficient to establish Magretta’s book as a “business classic” but there is more, so much more that she offers. After providing a vigorous and comprehensive discussion of Porter’s major insights, she then calls upon her expertise as a business historian and her skills as an educator to help her reader to select and then apply whatever would be most relevant – and most appropriate — to the reader’s own specific needs, interests, strategic objectives, and resources. This is the “context” for understanding to which I referred earlier.
Here is a partial list of the mini-commentaries that Magretta’s inserts throughout her lively and eloquent narrative:
“One-Upmanship Is Not Strategy” (Page 25)
“The Fundamental Equation: Profit = Price – Cost” (40-41)
“The Five Forces: Competing for Profits” (61)
“Do You Really Have a Competitive Advantage? First You Quantify, and Then You Disaggregate” (82-83)
“Discovering New Positions: Where to Begin” (118-119)
“Keep the Core, Outsource the Rest? Not So Fast” (153)
“Ten Practical Implications” of mastering Porter’s major concepts (184-185)
As indicated, what we have in this immensely valuable book are separate but related, indeed interdependent discussions of “the essential Porter” and how that material can serve as an enduring foundation for decisive competitive advantage, one that almost any organization can achieve and then sustain, whatever its size and nature may be. Congratulations to Joan Magretta on a brilliant achievement. Bravo!