Thinking books · Strategy & competition · Michael Porter, 1980

Competitive Strategy — the big ideas

The structural analysis of industries, and where profit actually comes from.

Free — no account needed to read

The big ideas

Five forces — rivalry, new entrants, substitutes, supplier power, buyer power — determine how much value an industry can retain, largely independent of how well any one firm is run.

Its central claim is that structure shapes outcome: a good company in a bad industry usually loses to a mediocre company in a good one.

Being stuck in the middle — neither the cost leader nor genuinely differentiated — is the most common strategic position and the weakest.

It is dated in its examples and its assumption of stable industries, and the analytical frame still holds.

Practise it — no need to have read it

Map the five forces on your own industry or job market. Which one takes the most value from you?

A hint: Then ask what would change your position relative to that force specifically.

Where it shows up in real life

• Choosing a market
• Pricing
• Deciding which industry to work in

Described in our own words with the source named — never quoted, and not a substitute for reading the book.