On Competition

Synopsis

For the past two decades, Michael Porter's work has towered over the field of competitive strategy. 

On Competition, Updated and Expanded Edition brings together more than a dozen of Porter's landmark articles from the Harvard Business Review. Five are new to this edition, including the 2008 update to his classic "The Five Competitive Forces That Shape Strategy," as well as new work on health care, philanthropy, corporate social responsibility, and CEO leadership.

This collection captures Porter's unique ability to bridge theory and practice. Each of the articles has not only shaped thinking, but also redefined the work of practitioners in its respective field. In an insightful new introduction, Porter relates each article to the whole of his thinking about competition and value creation, and traces how that thinking has deepened over time.

This collection is organized by topic, allowing the reader easy access to the wide range of Porter's work. 

• Parts I and II present the frameworks for which Porter is best known-frameworks that address how companies, as well as nations and regions, gain and sustain competitive advantage. 
• Part III shows how strategic thinking can address society's most pressing challenges, from environmental sustainability to improving health-care delivery. 
• Part IV explores how both nonprofits and corporations can create value for society more effectively by applying strategy principles to philanthropy. 
• Part V explores the link between strategy and leadership.

Summary

Chapter 1: The Nature of Competition

Summary:
Competition is a fundamental force in business, driving companies to improve and differentiate themselves. It encompasses price, quality, and innovation, and can take various forms, such as direct competition, indirect competition, and entry barriers.

Example: Apple and Samsung compete fiercely in the smartphone market, offering similar products with unique features and pricing strategies.

Chapter 2: The Tools of Competition

Summary:
Companies have a range of tools at their disposal to compete effectively. These include price, product design, advertising, distribution, and customer service. Each tool must be carefully aligned with the company's overall strategy.

Example: Walmart leverages its vast retail network and low prices to attract cost-conscious consumers, while Nordstrom focuses on high-quality products and exceptional customer service to cater to a more affluent clientele.

Chapter 3: The Dynamics of Competition

Summary:
Competition is not static; it evolves as companies enter and exit markets, new technologies emerge, and consumer preferences change. Companies need to constantly monitor and adapt to these dynamics to stay competitive.

Example: The rise of e-commerce has led to increased competition for traditional brick-and-mortar retailers, forcing them to develop online sales channels and improve their in-store experiences.

Chapter 4: The Impact of Competition

Summary:
Competition has both positive and negative effects on businesses and society. On the positive side, it can drive innovation, efficiency, and lower prices for consumers. On the negative side, it can lead to market concentration, monopolies, and job loss.

Example: The dominance of Google in the search engine market has led to concerns about reduced competition and innovation in the tech industry.

Chapter 5: Managing Competition

Summary:
Companies can take proactive steps to manage competition and gain a competitive advantage. This involves developing a clear strategy, building strong customer relationships, investing in research and development, and forming strategic alliances.

Example: Amazon's relentless focus on customer satisfaction, vast product selection, and efficient logistics has allowed it to become one of the most dominant companies in the world.

Chapter 6: The Future of Competition

Summary:
The future of competition is uncertain but likely to be characterized by increased globalization, technological disruption, and shifts in consumer behavior. Companies will need to embrace innovation, agility, and a global mindset to succeed.

Example: The growth of artificial intelligence and automation is creating both opportunities and challenges for businesses, forcing them to adapt their strategies and workforce.