Book Review: Understanding Michael Porter

Book Review: Understanding Michael Porter

Porter

My MBA didn’t seem like it was 5 years ago until I started reading this book.  The amount of strategy I had known and forgotten was a little bit staggering.  Eventhough my job is firmly entrenched in technology these days, this was a solid refresher on some of Porter’s best works (the Business Value Chain, Five Forces, Competition, etc…).  Magretta does a very compelling job distilling the many volumes of Porter’s work down to just the parts that are important for managers.  She masterfully annotates some of his older concepts with some of his newer thinking, letting you pretend that you’ve followed his work closely since the 80s.

A short list of the things I remembered I had forgotten includes:

  • You can have a distinct value proposition from focus, differentiation, or cost leadership but true differentiation does not come just by being the best at delivering something that everyone else delivers.  Operational efficiency, while important in the trenches, is not differentiation.
  • Leverage an activity map to be sure that your value chain consistently drives for the same value.
  • The Five Forces rarely change for an industry.  Even high-tech ones where products and trends cycle regularly.  The key is learning your industry and choosing how to differentiate.