Competitive Strategy: Techniques for Analyzing Industries and Competitors

If the business is really successful, then there is usually a good strategic logic behind that success, be it hidden or not. But the truth is that many companies, especially large complex companies, don’t really have strategies. At the core, strategy is about focus, and most complex organizations don’t focus their resources. Instead, they pursue mu

If your value chain looks like everyone else’s, then you are engaged in competition to be the best.

This misses the mark in important ways. For Porter, competitive advantage is not about trouncing rivals, it’s about creating superior value. Moreover, the term is both concrete and specific. If you have a real competitive advantage, it means that compared with rivals, you operate at a lower cost, command a premium price, or both.

When managers focus on execution, on making sure that they are “best practice” when it comes to generic activities, then eliminating trade-offs can be a good thing. When it comes to strategy, however, trade-offs are essential in making what you do unique. Finding trade-offs—IKEA’s insight about the value of flat packs, for example—is essential to c