Introduction: Michael Porter's "Competitive Strategy"

Author(s): Nicholas Argyres and Anita M. McGahan

Source: The Academy of Management Executive (1993-2005), Vol. 16, No. 2, Theme:
Achieving Competitive Advantage (May, 2002), pp. 41-42
Published by: Academy of Management
Stable URL: https://www.jstor.org/stable/4165838
Accessed: 29-10-2019 06:56 UTC

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t Academy of Management Executive, 2002, Vol. 16, No. 2
Introduction: Michael Porter's
Competitive Strategy
Nicholas Argyres and Anita M. McGahan
The publication in 1980 of Competitive Strategy:
Techniques for Analyzing Industries and Competi-
tors by Michael E. Porter marked a critical juncture
in the field of business strategy. At the time, the
young field was rich with interesting and impor-
tant questions but poor in robust frameworks for
analyzing them. As they disseminated among ac-
ademics and practitioners, Porter's frameworks for
analyzing industries and competitive positioning
brought a new level of discipline and rigor to the
field.
More than twenty years later, Competitive Strat-
egy is available in 17 languages and is in its 53rd
printing. Executives around the world continue to
rely on the industry analysis and competitive po-
sitioning frameworks that were first articulated in
the 1980 book. Porter has used these frameworks in
his consultations with firms on every continent and
in every sector of the economy, and he actively
advises national leaders on competitive strategy.
Major management consulting firms use the Porter
frameworks, and a Porter Prize is offered annually
to a Japanese company for strategic excellence.
Nearly all business schools in the United States,
Europe, and Asia cover Porter's ideas in a required
undergraduate or graduate course on business
strategy or policy. In short, Porter's ideas have had
enormous staying power, in a field where fads and
fashions are common.
Porter's ideas have had enormous
staying power, in a field where fads
and fashions are common.
We interviewed Porter in March 2002 at his Insti-
tute for Strategy and Competitiveness at the Har-
vard Business School. We asked him about his
experiences in writing Competitive Strategy, the
book's impact, and how his ideas have evolved
since the book's publication. The interview also
provided a unique opportunity to ask Porter about
41
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issues that are particularly relevant to executives
and academics today. In the interview, Porter dis-
cussed innovation and its relationship to his core
frameworks, and the relevance of speed, knowl-
edge, and dynamic capabilities to competitive po-
sitioning. The interview also addressed Porter's
views on emergent strategies, partnerships and
alliances, antitrust enforcement, environmental
policy, the resource-based view of the firm, socio-
logical approaches to strategy, and the state of the
academic field.
Compiling this special section for The Academy
of Management Executive has been a valuable
learning experience for both us. One of us (Ar-
gyres) met Porter personally for the first time at the
interview and was struck both by the depth and
breadth of Porter's ideas about strategy. Some of
our questions were incisive and critical. Porter re-
sponded graciously each time. His responses re-
flected a deeply rooted commitment to identifying
and understanding competitive processes and to
clarifying fundamental principles of competitive
strategy. One of the most pervasive features of his
responses was a sense that he had carefully con-
sidered alternative points of view and adapted his
ideas either to incorporate or reject them. For ex-
ample, Porter indicated that today he would adapt
the Five Forces Model to incorporate demand-side
economies of scale (i.e., network or bandwagon
effects) into his ideas about buyer bargaining
power.
Argyres was also struck by Porter's breadth of
interests. In the interview, Porter touched on so-
phisticated ideas about antitrust policy, account-
ing policies, education reform, environmental pro-
tection, and urban revitalization. Porter was
preparing for a major speech on antitrust when we
interviewed him. His views on antitrust are based
on the idea that corporate and governmental inter-
ests are aligned in ways that are not incorporated
into prevailing views about antitrust policy. An
advocate of vigorous enforcement, Porter believes
that policies should be transformed to encourage
 42 Academy of Management
innovation. Porter's work in a broad range of policy
areas reflects a deep-seated belief that competi-
tion leads to better outcomes and transcends
tradeoffs between corporate interests and social
welfare.
Porter's work in a broad range of policy
areas reflects a deep-seated belief that
competition leads to better outcomes and
transcends tradeoffs between corporate
interests and social welfare.
For McGahan, Porter's depth and breadth of in-
terests are familiar. McGahan met Porter as a stu-
dent in Porter's industry and competitive analysis
course at Harvard, shortly after the publication of
Competitive Strategy. Over nearly twenty years,
she has worked with him as a student, colleague,
and co-author. Yet despite her close familiarity
with Porter's ideas, the interview revealed several
important facets of Porter's way of thinking that
she hadn't fully appreciated. For example, the dis-
cussion toward the end of the interview on the
future of the field led to questions about insights
from sociology on the importance of status in busi-
ness. Porter's response, which emphasizes that
competition tends to overwhelm initial status dif-
ferences, reveals an underlying faith in the funda-
mental fairness of competitive processes.
The commentaries that accompany the Porter in-
Nicholas Argyres is an associate
professor in the Strategy & Policy
Department at the Boston Uni-
versity School of Management.
He studies the relationships be-
tween the strategies and intemal
organization of firms; the de-
terminants of organizational
boundaries; govemance of uni-
versity technology transfer; and
organizational politics. He
t, currently serves on the edi-
torial board of the Academy of
Management Journal. Contact:
nargyres@bu.edu.
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Executive May
terview, by Jay Barney, Adam Brandenburger, and
John Bachmann, provide context and perspective
on the relevance of Porter's ideas. Barney, a distin-
guished authority on competitive strategy, de-
scribes the state of the field when Competitive
Strategy was first published and reflects on how
the book's frameworks have influenced both strat-
egy research and practice. Brandenburger, a noted
game theorist, strategy professor, and author of a
leading practitioner-oriented book on strategy,'
demonstrates the robustness of the theoretical un-
derpinnings of the two major frameworks in Com-
petitive Strategy. Bachmann, managing principal
of the investment company Edward Jones, writes
about how Porter's ideas have influenced the way
he thinks about his company's strategy.
Through 16 books and over 75 articles, Michael E.
Porter has articulated a broad range of ideas that
have had unparalleled impact on corporate prac-
tice, academic research, and the business school
curriculum. Competitive Strategy, the first of his
books to present frameworks for use by practi-
tioners, set an agenda for the field of strategy that
continues to be relevant today. We hope that you
find the interview transcript and accompanying
commentaries to be as stimulating as we did.
Endnote
' Adam M. Brandenburger and Barry J. Nalebuff, Co-opetition
(New York: Currency Doubleday, 1996).
Anita M. McGahan, professor
of strategy & policy at the Bos-
ton University School of Man-
agement, is also a fellow at
the Harvard Institute on Strat-
egy and Competitiveness. She
is the author of over 50 articles
and case studies on competi-
tive advantage, industry evo-
lution, and company financial
performance. She earned an
MBA and a Ph.D. in business
economics from Harvard. Con-
tact: amcgahan@bu.edu.