Research Summary

Competitive Strategy

by Michael E. Porter

Description

Porter is engaged in a major new body of work on the theoretical foundations of competitive positioning and the underpinnings of sustainable competitive advantage. This research highlights the distinction between positioning and operational effectiveness; the fundamental role of differences in company activities in positioning; and the central importance of tradeoffs in delivering different types of customer benefit to the sustainability of differences in positioning; the role of fit among a firm's activities (or activity systems); competitive advantage and sustainability; and the relationship between strategy, organizations, and incentives.

He is exploring his ideas in theoretical papers, mathematical models, and company studies. An early discussion of this body of work appears in "What is Strategy?", Harvard Business Review, November-December 1996 and Activity Systems as Barriers to Imitation," Harvard Business School Working Paper #98-066.

Porter's next book on strategy, focusing on these ideas, is nearing completion.

Michael Porter and Anita McGahan are completing a series of statistical papers on the sources of company and industry profitability. Based on large new database on the profitability of U.S. business segments between 1981 and 1994, their research examines topics such as the relative importance of industry; business segment positioning; corporate parent effects on superior or lagging profitability; the persistence of profit differences over time; and how high and low performers differ along such dimensions.