Average customer rating:
- Excellent analysis with some weak points
- Redefining Health Care
- A new look
- Disappointed but Some Might Find Value
- Redefining Health Care
|
Redefining Health Care: Creating Value-Based Competition on Results
Michael E. Porter , and
Elizabeth Olmsted Teisberg
Manufacturer: Harvard Business School Press
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Binding: Hardcover
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ASIN: 1591397782 |
Book Description
The U.S. health care system is in crisis. At stake are the quality of care for millions of Americans and the financial well-being of individuals and employers squeezed by skyrocketing costs--not to mention the stability of state and federal government budgets.
In Redefining Health Care, internationally renowned strategy expert Michael E. Porter and innovation expert Elizabeth Olmsted Teisberg reveal the underlying and largely overlooked causes of the problem and provide a powerful prescription for change. The authors argue that participants in the health care system have competed to shift costs, accumulate bargaining power, and restrict services rather than create value for patients. This zero-sum competition takes place at the wrong level--among health plans, networks, and hospitals--rather than where it matters most: in the diagnosis, treatment, and prevention of specific health conditions.
In spite of competition among these systems, the patient care cycle is poorly coordinated. The fractured system undermines both efficiency and quality of outcomes.
Redefining Health Care lays out a breakthrough framework for redefining health care competition based on patient value over the full cycle of care—from prevention and diagnosis through recovery or long-term disease management. With specific recommendations for hospitals, doctors, health plans, employers, and policy makers, this book shows how to move to value-based competition on results that will unleash stunning improvements in quality and efficiency.
Customer Reviews:
Excellent analysis with some weak points.......2007-09-01
This book has received probably disproportionate attention due to Prof. Porter's notoriety as a strategic thinking theorist. There are better overall books on healthcare policy available. In particular I recommend the Bodenheimer/Grumbach books, one on healthcare policy and one on primary care, Dr. Arnold Relman's book, A Second Opinion, Strained Mercy, an outstanding and thorough analysis of healthcare economics with particular regard to Canada's healthcare system, among others.
I find the analysis of the USA healthcare system by Profs. Porter and Teisberg to generally be excellent, although I find it wanting in regard to their disparagement of a single-payer/single-insurer system and to their description and analysis of healthcare systems outside the USA. From my perspective private health plans play only a net negative role in the system. The authors' analysis of how the health insurance market works is quite good. However their recommendation that a system of private insurers should persist is refuted by their own analysis! A single payer/insurer system will not cure the problems of the US system, as they clearly point out, but it does remove the inherently dysfunctional characteristics of private insurance, not least of which is its failure to meet the needs of the uninsured - a very large number - and its inherent propensity to exclude the very people who need coverage and care. The authors rightly point out that mandatory health insurance along with risk-pooling among insurers to spread the costs of those insured individuals who generate the highest costs is a "solution" to the current non-functioning system, but the same result, at lower cost and with much greater simplicity, can be achieved through a single payer/insurer.
The other key aspect of healthcare - how it is delivered - is ultimately more important than the financing/insurance side. The authors provide excellent analysis and recommendations in this regard. They correctly address the aspects of the healthcare market that prevent its functioning as a "competitive" market, specifically the abysmal lack of patient information on prices for services, on outcomes of actions by providers, comparative statistics on provider performance and similar. They also provide an interesting report by the Cleveland Clinic on outcomes, i.e. results, of the Clinic's heart surgery activity. They appropriately use this as an example of the kind of reporting that is needed.
The authors' analysis of healthcare systems outside the USA is skimpy and inaccurate in my opinion. The authors underplay the demonstrated efficacy of government-funded systems that outperform the USA system almost across the board in gross measures of outcomes (infant mortality and longevity) and vastly outperform the US system in regard to cost. They gloss over the fact that per capita costs in the USA are 2.5 times! the average of other OECD countries. It is not as though the costs are say 10% above the average with comparable outcomes. They are 150% higher with worse outcomes. Instead of noting this and analyzing it thoroughly, the authors assert that waiting times and rationing of care are significant problems in those countries, assertions which are simply not borne out by a closer examination of the facts. Also the fact that (mostly) single-payer/insurer systems function well universally does not fit the authors' main thesis, so rather than revise the thesis based on this evidence they choose to ignore the evidence.
As a consequence of these limitations I rate the book with 4 stars rather than 5. Too bad, because most of the book is excellent.
Redefining Health Care.......2007-05-23
Book Review
Redefining Health Care by Michael Porter
I am writing this review to help share some excellent ideas on the availability and quality of medical treatment in the United States and on the U.S. economy which is being dragged down by ever-increasing medical costs. The economic impact is not just on corporate profits and stock prices but also on U.S. employment because everything that raises costs makes it harder for U.S. manufacturers to compete with foreign suppliers and makes it harder for U.S. manufacturers to sell in foreign markets.
Unfortunately, the book is long, turgid, and full of details, which help to substantiate his conclusions and also provide guidance on implementing improved policies. I am afraid the book does not appeal to executives, politicians, or doctors. It also proposes radical changes in all aspects of the medical system and its financing and operation. Dr. Porter proposes major changes on the part of all parties involved in delivering and paying for health care.
The book begins with a review of health indexes and health care throughout the world and shows, while the U.S. has the greatest expenditures by any set of measurements, it does not have the best results.
Then, Dr. Porter introduces his most important concept: that any medical treatment should be measured by its results; how much lost time and discomfort did the patient have, is he or she completely cured, or how much disability measured over the entire span of the illness or even the life of the patient. We tend to think of an operation as being successful if the patient left the hospital in good condition. But how much additional recovery time, disability, or reoccurrence was there? If the patient doesn't come back to see him, a doctor doesn't know whether he was cured by the treatment or if the patient was so dissatisfied he went to another doctor or simply gave up on a series of treatments. The goal is to develop a scoring system for each group of illnesses that can be compared with the cost of each individual's treatment and their results to determine what is the best set of procedures and the best doctor or group of doctors to do the work can be used to guide providers and treatments. Porter has some reason to believe that the best treatments are generally less costly even though the individual item costs may be more, the greater effectiveness and the less chance of complications reduces overall cost. Included in the overall cost should be lost wages, which is a reasonable proxy for the patient's time.
The goal is to develop a health plan that pays for results not for treatments. In many cases, that would be a single payment to the provider for a whole series of treatments from diagnosis on through operations, post-operative care, and follow ups which could extend over a long period of time. This is a radical change from the present system which pays for treatments and tends to produce more treatments and does not have any effective means for either the insurers, or the employers, or the patients even to compare one treatment option with another. This is an extreme, radical change and would take a long time to implement, but there are pieces of the program in operation. A number of these are explained at length. Health insurance companies could hire these firms for their specialized expertise and would not have to do the work on their own. An example of what is done is how the firm studies the history of heart transplant patients and will give an insurance company a single payment for the entire course of treatment providing it is done in the manner and by people they specify. They would particularly focus on caregivers who have an outstanding record of success. It appears that for most illnesses, there are organizations that are substantially better than others and this program could be extended broadly.
Another area of development would be to have counselors which would be part of the function of the insurer to advise a company's employees with a list of particularly well qualified doctors and suggest treatment elements.
Government would seem to be poorly adapted to facilitating these changes because they are radically different from Medicare. Medicare seems to promote cheap, but not necessarily effective treatments and set arbitrary pay scales which do not allow the better providers to charge more for their services and thus encourage more providers to be in the high performance category. Companies that pay for the insurance are the ones that have to put pressure on the insurers to implement the above changes. This could not be done over a short period of time but would eliminate a lot of the wasted time that is now involved in the payments for each little step of the process and for each treatment step.
Chapter 8 is a detailed discussion of how to implement the aforementioned concepts using modifications of Medicare and other laws. This is too complex to summarize here but it appears doable if Congress and the Executive are sufficiently motivated. It is likely that few people would understand what is happening, but the benefits to cost ratio is sufficiently great that the changes would probably be supported and accepted. On the other hand, the situation is so complex, it is questionable whether lawmakers and administrators would be willing to undertake the many complex tasks required. On the other hand, the downside risk appears quite small.
Porter approaches the whole subject from the points of view of business strategy and the problems of decisions with very imperfect information. While the government frequently acts with very imperfect information, its strategy for doing so is not well developed and poorly applied.
Redefining Health Care: Creating Value-Based Competition on Results
A new look.......2007-05-20
Though a little dry, and at times repetitive, this book offers practical information. In a mess of books describing the massive problems in healthcare today, this book was at once motivating and up-lifting. I bought it for a class, but it is one of the books I'll be keeping instead of passing along at the end of the quarter.
Disappointed but Some Might Find Value.......2007-04-05
I'm a big fan of Porter, but I was somewhat disappointed by this book. Let me be frank. The first problem I have with the book is that the authors try to capture as large of an audience as possible, being careful not to place blame on certain providers within the health care system. That approach might get better reviews and sell more copies, but it is not delivering real value. One cannot escape mention of the realities of corruption and fraud by every player in health care and expect to address the problems.
The second problem I have is that Porter fails to recognize that health care is distinct from any other industry in America because it is highly politically influenced. Much of the health care system is public (government funded). This is a main reason why competition in this industry is highly ineffective. How can you have a pure competitive environment when poor performing providers continue to receive government-funded contracts? How can you have full competition when Washington merely fines providers for fraud with no jail time? How can you have competition that creates value when Washington places the burden of increasing costs upon taxpayers, letting the industry charge what it needs to deliver earnings that Wall Street expects?
Overall, by failing to address the harsh realities of politics and big money within America's health care industry, Porter's book is too idealistic and therefore falls short of offering a real solution. Regardless, it is a quality book and at least does what no other has in trying to approach the problems from a reasonable standpoint. I expected more from him, but clearly this book is a view from academia and is far detached from many realities of big industry in America. There are many good points in the book, but without addressing the main problems of a system whereby lobbyist groups who control health care policy, very little will change.
Redefining Health Care.......2007-01-09
Overall the book is a very good essay on how our healthcare system needs to evolve. From my vantage point, many of the points are relevant. It is a relatively lenghty book, being 400 pages, but the book does have a good, logical flow. It is worth reading to better understand our current healthcare system and ways to improve it.
Book Description
What forces drive competition in an industry? What moves will competitors make? How will one's industry evolve? How do strategic planners respond to competitive actions? How can a firm be best positioned to compete in the long run?
Michael Porter's Competitive Strategy is the definitive work on the subject of "competitive strategy," the hottest new concept in American business today. The book addresses major questions of vital concern to managers, and presents a comprehensive set of analytical techniques for understanding a business and the behavior of its competitors.
Step-by-step, Porter provides the techniques and tools managers need to successfully conduct an industry and competitor analysis. Just a few examples:
- The fundamental factors determining the nature of competition in a business.
- The three generic competitive strategies for coping with industry structure: cost leadership, differentiation, and "focus."
- How to recognize and act on "market signals" from competitors.
- Forecasting how the structure of an industry will evolve.
- The costs, risks, and returns of a "preemptive" strategy.
- Competing effectively in an emerging industry.
- Selecting new industries to enter.
Beginning with a comprehensive set of tools and techniques for analyzing any industry and any array of competitors, the book moves on to examine competitive strategies for fragmented industries, emerging industries, maturing industries, declining industries and global industries. The final section of the book provides analytical techniques for making the important strategic decisions that confront firms -- vertical integration, major capacity expansion, divestment and entry into new businesses.
This book will enable managers to anticipate and prepare for -- rather than simply react to -- sudden competitor moves, new entries into their business, and shifts in industry structure, as well as to take forceful positive action to improve a company's position through tested competitive strategies. Competitive Strategy is destined to become the Bible for Fortune 500 managers, company advisers, and securities analysts.
Customer Reviews:
A Classic.......2007-04-16
This book is perhaps the best overview of competitive strategy analysis ever written. The book together with Porter's "Competitive Advantage" and "Competitive Advantage of Nations" has remained as the model or classic work on business strategy. Although the business world has evolved significantly since 1980 when the book was published, the framework and analysis of the book is still applicable and relevant today. Therefore, this book is a "must-have" for anyone involved in Strategic Planning and Analysis since many of his concepts can easily be applied to the current economic environment, with some necessary adaptations. The framework Porter lays out is a great starting point for any analysis of industries or competitors.
The book is well written in a clear and straightforward, and easy to understand format, although sometimes I got the sense that the book can tend to repeat itself. However, the clarity of the concepts is a welcome change from some lesser textbooks you sometimes meet in many other books on business strategy, and his repetition serves to reinforce his message.
However, the rapid advances of technology mean that there is need for some adaptation of some of the concepts to take into account the changing paradigms such as the need to delight the customer with the competitor not being the centre of gravity but rather the customer. In this regard, the book has some limitations, because the competitive dimension is frequently less important than the customer element in the current environment.
Despite these weaknesses, this book provides an excellent start of how to think about competitors, as long as you keep a close look at the additional dimensions after grasping the analysis.
Comprehensive checklist.......2007-02-17
This book is a checklist, a great checklist for anyone doing analysis on industries or companies. Porter is a hard to miss if you work in this area, so you might as well get through this book, and you'll know what everyone is talking about, and you'll also get a good framework that ensures that your analysis doesn't skip important points.
Reading Art of War and those kinds of books gives you another kind of strategy, which is very useful in combination with the things Porter gives you. Basically, I think Porter has done a great job of "summarizing" the strategy-process, and this is why the book is fo famous, and it is also why I give it 4 and not 5 stars. With sound theory and thorough work you will get the same insights as with Porters framework, and you will also be better equipped to deal with the peculiarities in every situation. Nevertheless, many peole don't have time/the interest for more than a summary, so for them this book is great. And for the rest it's great to get through it to learn the "common language" that is prevalent in the industry of strategy and anlysis today.
Landmark Book on How to Think about Competing.......2006-10-11
"Competitive Strategy" was one of my favorite books when I was studying for an MBA. It continues to be one of my key reference books. It will help you learn how to think about competing. Although the concepts contained are now viewed as common sense, so many people ignore these basics and fail. This is a must read for anyone in business.
You Know It's a Classic -- So Just Buy It.......2006-07-20
There's no point in me telling you something you already know (this seminal book came out over 25 years ago -- its REQUIRED reading at every respectable MBA program I can think of).
What I will say is that this is a critical book to own if you want to understand how and why firms choose to penetrate (or avoid) markets. Speaking from my own experience, this is also a MUST HAVE if you want to understand industry dynamics if you are a consultant, or in my case, an aspiring equity research analyst.
An excellent book.......2006-06-17
Much has been written about Porter in these reviews and elsewhere, so I won't repeat that information. Instead, I will focus on what drew me to this book, and from that, what its strengths and weeknesses are.
I heard about "Competitive Strategy" because it was referenced by a number of stock analysts seeking to determine or project earnings of a particular company going forward. Read with that position alone in mind, "Competitive Strategy" is fairly esoteric. The book itself is written more from the perspective of a consultant or "big picture" thinker than it is from, say, the view of a financer or investor. While that was somewhat of a drawback for me for my purposes, it certainly does not detract from the overall value of the book.
The book itself is quite readable, despite the academic credentials of the author and much of its audience and its theoretical bent. However, readers seeking quantafiable information will not find formulas or other information of a comparable nature to guide them. This is not unexpected, yet Porter's book is cited or referenced by a fair number of stock market analysts seeking support a variety of conclusions they've reached. After reading the book myself, I am forced to conclude that (i) there is no crystal ball for anyone to determine the future, and (ii) while Porter's book is an invaluable tool for management of a particular entity to use in assessing its competitive environment and strategy, it does not provide the individual investor with the ability to read futur events.
In all, Porter's book is a great read, and should add greatly to any person's ability to analyze the environment in which a particular corporation exists. However, investors might wish to supplement it with methods from other disciplines (such as Benjamin Graham, Mary Buffett, Marty Whitman, etc.).
Book Description
The World Economic Forum continues its tradition of excellence with the 27th edition of the annual Global Competitiveness Report featuring the latest national statistics and results of the Executive Opinion Survey, which captures the perception of over 10,000 business leaders. The report provides the most comprehensive assessment of 117 developed and emerging economies. Produced in collaboration with a distinguished group of international scholars and a global network of over 100 leading national research institutes and business organizations, the report presents individual detailed country profiles highlighting the competitive strengths and weaknesses of each economy as well as an extensive section of data tables containing country rankings for over 160 indicators. The report also showcases the latest thinking and research on issues of immediate relevance for business leaders and policy-makers. The forthcoming Report is scheduled to include thought-provoking papers by Jagdish Bhagwati, Nicholas Eberstadt, Michael E. Porter, Kenneth Rogoff, Beatrice Weder and John Williamson.
Book Description
The essential complement to the pathbreaking book Competitive Strategy, Michael E. Porter's Competitive Advantage explores the underpinnings of competitive advantage in the individual firm. With over 30 printings in English and translated into thirteen languages, this second volume in Porter's landmark trilogy describes how a firm actually gains an advantage over its rivals. Competitive Advantage introduces a whole new way of understanding what a firm does. Porter's groundbreaking concept of the value chain disaggregates a company into "activities," or the discrete functions or processes that represent the elemental building blocks of competitive advantage.
Now an essential part of international business thinking, Competitive Advantage takes strategy from broad vision to an internally consistent configuration of activities. Its powerful framework provides the tools to understand the drivers of cost and a company's relative cost position. Porter's value chain enables managers to isolate the underlying sources of buyer value that will command a premium price, and the reasons why one product or service substitutes for another. He shows how competitive advantage lies not only in activities themselves but in the way activities relate to each other, to supplier activities, and to customer activities. Competitive Advantage also provides for the first time the tools to strategically segment an industry and rigorously assess the competitive logic of diversification.
That the phrases "competitive advantage" and "sustainable competitive advantage" have become commonplace is testimony to the power of Porter's ideas. Competitive Advantage has guided countless companies, business school students, and scholars in understanding the roots of competition. Porter's work captures the extraordinary complexity of competition in a way that makes strategy both concrete and actionable.
Customer Reviews:
Using IT for Competitive Advantage.......2007-09-24
In his 1985 book titled Competitive Advantage: Creating and Sustaining Superior Performance Free Press 1985 Management and IT (information Technology) author Michael Porter set fourth some very useful ideas about creating competitive advantage with IT (e.g. building a strategically valuable system.) I've added an example or two after each of his points. They include:
(1) Building barriers to Entry (Microsoft Windows loaded on every new PC)
(2) Enhancing loyalty (American Hospital Supply on-line ordering)
(3) Favorably altering the balance of power with suppliers (American Airlines AAdvantage frequent flyer program)
(4) Changing the basis of competition within an industry (Federal Express hub & spoke delivery)
(5) Developing entirely new products (Finance and Insurance industries)
I believe this is very powerful stuff when thinking about the value of a new system proposal and in particular the inevitable 'build vs. buy decision'. It's also relevant to starting a new business and trying to find an approach that makes it unique!
A very timely book even after 20+ years!
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Porter is a topper.......2007-08-29
Read and learn.
It changes your life and the way you think about society.
Gives you a deeper understanding.
Excellent work by Porter.
The Bible.......2007-04-19
While Porter's Competitive Strategy is The Old Testament, this book, Competitive Advantage, is The New Testament. Enough said.
I recommend this book!.......2007-01-11
Prior to reading this book, "Competitive advantage" was just a phrase I used in my marketing material to hopefully get the reader's attention. Now I have a measuring stick for analyzing how specific companies can survive in the 'take-no-prisoners' real world.
The best part of my Strategy course.......2006-10-12
For me, the best part of MBA's Strategic Management course was getting to know the ground breaking works of Michael Porter. I found the book 'Competitive Advantage' so impressive that I also ended up ordering 'Competitive Strategy'. Competitive strategy is even used by wallstreet investors and analysts to develop investment insights.
The classic paper 'What is Strategy' still has me thinking and mulling over -definitely an uncontested winner as my year 2006's best read!
Book Description
With the publication of his best-selling books Competitive Strategy (1980) and Competitive Advantage (1985), Michael E. Porter of the Harvard Business School established himself as the world's leading authority on competitive advantage. Now, at a time when economic performance rather than military might will be the index of national strength, Porter builds on the seminal ideas of his earlier works to explore what makes a nation's firms and industries competitive in global markets and propels a whole nation's economy. In so doing, he presents a brilliant new paradigm which, in addition to its practical applications, may well supplant the 200-year-old concept of "comparative advantage" in economic analysis of international competitiveness.
To write this important new work, Porter and his associates conducted in-country research in ten leading nations, closely studying the patterns of industry success as well as the company strategies and national policies that achieved it. The nations are Britain, Denmark, Germany, Italy, Japan, Korea, Singapore, Sweden, Switzerland, and the United States. The three leading industrial powers are included, as well as other nations intentionally varied in size, government policy toward industry, social philosophy, and geography.
Porter's research identifies the fundamental determinants of national competitive advantage in an industry, and how they work together as a system. He explains the important phenomenon of "clustering," in which related groups of successful firms and industries emerge in one nation to gain leading positions in the world market. Among the over 100 industries examined are the German chemical and printing industries, Swiss textile equipment and pharmaceuticals, Swedish mining equipment and truck manufacturing, Italian fabric and home appliances, and American computer software and movies. Building on his theory of national advantage in industries and clusters, Porter identifies the stages of competitive development through which entire national economies advance and decline.
Porter's finding are rich in implications for both firms and governments. He describes how a company can tap and extend its nation's advantages in international competition. He provides a blueprint for government policy to enhance national competitive advantage and also outlines the agendas in the years ahead for the nations studied. This is a work which will become the standard for all further discussions of global competition and the sources of the new wealth of nations.
Download Description
A four-year, ten-nation study of the patterns of competitive success in leading countries concludes that companies achieve competitive advantage through acts of innovation. A nation's capacity to innovate is affected by four broad attributes, the "diamond" of national advantage: 1) factor conditions; 2) demand conditions; 3) related and supporting industries; and 4) firm strategy, structure, and rivalry. Based on this analysis, government and companies should act as catalysts and challengers, but not get directly involved in competition.
Customer Reviews:
A Classic.......2007-01-24
"The Competitive Advantage of Nations" gives insights into why and how industries, regions, nations or some social groups thrive or fall short. The book explains and presents the theory on the sources of sustained prosperity in the contemporary worldwide economy. This seminal work has assisted countries to develop national policy based on their international competitiveness.
Porter methodically and systematically discusses why some nations achieve continual economic prosperity. He explains the roles of governments and companies in economic development. The author shows the distinction between competitive advantage as a source of wealth and the concept of comparative advantage which had been until recent years the paradigm on thinking about international competition.
Porter based his research in 10 leading trading nations. The book introduced the author's "diamond" which is a new way of looking and comprehending the competitive advantage of a nation. His concept of "clusters" or groups of interconnected firms, suppliers, related industries and institutions in certain locations opened a unique way for organizations and governments to look at economies and assess the competitive advantage of locations and set public policy.
This weighty tome is recommended reading for entrepreneurs, business executives, policy makers, economists and other readers who are interested in ensuring that companies can successfully face the future based on pragmatic assessment of how the firm can gain competitive advantage.
Strategy - It's a matter of life and death .......2005-05-03
As an active Business Consultant I'm often appalled at the lack of disregard for the importance of strategy. It's a matter of life and death (at least for your company).
"Vision without action is a daydream. Action without vision is a nightmare." - Japanese proverb
Why read a book on strategy? Quite simply, to be successful. Technology and globalization culminated in ferocious competition for virtually all industries. To be competitive in today's world, you must understand that all value is derived from the customer. Therefore, you will do well to delve deep into how to create value for the customer.
Competition is becoming increasingly global. Therefore, it is in your best interest to understand how national, international, and governmental issues affect your industry and hence, your company.
Third in Porter's landmark trilogy, Competitive Advantage of Nations, somewhat different from his first two books, focuses less on industries and companies themselves, and more on how a firm actually gains an advantage over its rivals.
Competitive Advantage of Nations consists of four parts:
Part I - Foundations, presents the theoretical frameworks which form the basis for the rest of the book. In Chapters 2, 3 and 4 Porter revisits most of his previous work, such as the five competitive forces, generic strategies, the value chain, and the advantages "diamond".
Part II - Industries, frameworks of Part I are applied to explain the histories of four industries (German printing press, American patient monitoring equipment, Italian ceramic tiles, and Japanese robotics). In addition, Porter applies the frameworks to the service sector.
Part III - Nations, frameworks of Part I are applied to ten nations. Porter splits these ten nations up in early post-war winners, emerging nations in the 1970s and 1980s, and the traditional business countries (Britain and USA).
Part IV - Implications, Porter discusses the impact of the frameworks of Part I on company's strategies and government policies. In the final chapter Porter tries to answer the question, "What of the future?" According to Porter "the central economic concern of every nation should be the capacity of its economy to upgrade so that firms achieve more sophisticated competitive advantages and higher productivity. Only in this way can there be a rising standard of living and economic prosperity."
In summary, Competitive Advantage is a must read for any Aspiring Entrepreneur. To lead your company into the future you must create and capture value. Reading this book will help you better understand how firms within industries gain a competitive advantage. Don't be blindsided by the comfort of the moment, prepare for the future now.
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Michael Davis, President - Brencom Strategic Business Consulting
Virtuosic analysis of national productivity and technology.......2003-06-14
Forty to fifty years ago economists and political theorists did much armwaving about what makes nations competitive. In the past 20 years tools like analysis of patents, R&D expenditures, the numbers of scientifically educated people, have provided more quantitative insight. To these tools Porter adds realistic analyses of top industries in various countries - from shoes and couture in Italy, to Silicon Valley in the U.S. He points out that the fastest growth comes when favorable factors are concentrated in centers where diverse groups - industrial, academic, sometimes government or traditional industries come together and have intense interactions. This book glitters with insights and ideas. The author is among the leading US analysists of economic performance, heading a study discipline at Harvard and working with the National Bureau of Economic Research
Reasons for success and failures of nations.......2001-12-12
Michael E. Porter is a Professor of Business Administration at Harvard Business School and a leading authority on competition and strategic management. Porter is the author of the legendary business and management books 'Competitive Strategy' (1980), and 'Competitive Advantage' (1985). I cannot start this review without a word of warning: This book is consists of 850 pages and is thus not a quick weekend-read.
In this book, the author aims to answer the question, "Why do some social groups, economic institutions, and nations advance and prosper? ... I titled the book 'The Competitive Advantage of Nations' to highlight the crucial distinction between my broader concept of competitive advantage as a source of wealth and the nation of comparative advantage which had long dominated thinking about international competition." In order to answer this question, Porter uses his traditional extensive research methods and tools to prove his point.
The book is split up in four parts: (i) foundations; (2) industries; (3) nations; and (4) implications. In Chapter 1 - The Need for a New Paradigm, the author discusses the reasons for his research: "The central question to be answered is why do firms based in particular nations achieve international success in distinct segments and industries? The search is for the decisive characteristics of a nation that allow its firms to create and sustain competitive advantage in particular fields, that is, the competitive advantage of nations."
In Part I - Foundations, the author presents the theoretical frameworks which form the basis for the rest of the book. In Chapters 2, 3 and 4 Porter revisits most of his previous work, such as the five competitive forces, generic strategies, the value chain, and the advantages "diamond". Porter makes an important notion before turning the second part of the book: "The theory can and must be applied at two levels, the industry and the nation."
In Part II - Industries, the frameworks of Part I are applied to explain the histories of four industries (German printing press, American patient monitoring equipment, Italian ceramic tiles, and Japanese robotics). In addition, Porter applies the frameworks to the service sector. This is a sector which Porter has discussed very little in his previous books. "... an increasingly important class of industries where international competition has not been widely studied."
In Part III - Nations, the frameworks of Part I are applied to ten nations. Porter splits these ten nations up in early post-war winners, emerging nations in the 1970s and 1980s, and the traditional business countries (Britain and USA). Thank God, the author discusses both successes and failures within the different countries, plus identifying the reasons behind them. He also advises which steps can be taken to improve national advantage.
In Part IV - Implications, Porter discusses the impact of the frameworks of Part I on company's strategies and government policies. In the final chapter Porter tries to answer the question, "What of the future?" According to Porter "the central economic concern of every nation should be the capacity of its economy to upgrade so that firms achieve more sophisticated competitive advantages and higher productivity. Only in this way can there be a rising standard of living and economic prosperity."
This book is an impressive piece of research and Porter gets assistance from over 30 research assistants from all around the world. The book is not a simple read due to the amount of information provided and the length of the book. For readers who have read Porter's previous masterpieces I would like to stress that this book is considerably different than his previous masterpieces. It focuses less on industries and companies themselves, but more on national, international, and governmental issues. This book shows the author's education and training (Harvard PhD in economics). Still, the book is an impressive piece of work, although not for the fainthearted.
Act Three of Three in a Symphony.......2000-07-27
A model for localize advantage not exclusively predicated on geography, geography, geography (location, location, location). A guide for what a government can effectively do to attract, grow, and sustain world class competitive industries. Should be read by every sub-saharan nation that has try to create industries without much success. It's Balanced Regulation, Respect for Private Property, Even Handed Law, and Education STUPID! If every tin horn dictator would read Dr. Porter and Dr. Olson we may eventually all live in a better planet.
Book Description
What fundamentally determines the profit potential of a business? What does a company do to protect its territory from another firm seeking to enter it? How is it able to forecast its future under shifting and uncertain conditions -- or predict how its rivals will behave under those same conditions?
Most firms must face strategic questions like these when planning their future. The decisions they make must be based upon a rigorous, thorough analysis of the competition. That analysis and those decisions are the subject of this broad and comprehensive casebook, the essential companion volume to Michael Porter's widely acclaimed Competitive Strategy. The focus here is the actual competitive strategies of companies in 18 important industries and the portrayal of the competitive situations they face.
The 26 indepth case studies provide the student with a laboratory in which to develop a working understanding of competition and the ability to identify the factors that shape the success or failure of a firm. Each case places the reader in a real-world business setting -- giving him the strategist's view of Kodak, for example, or General Electric -- and allows for the firsthand exploration of various problems involved in designing and implementing strategy. The reader must cope with making choices actual companies have faced.
A major theme of the book is that a firm can shape the roles of competition in its favor if it understands these rules in a sophisticated way.
Michael Porter first developed his ideas on competitive strategy in a famous course at the Harvard Business School. As described in Competitive Strategy, Porter finds three types of tools for strategy development. The first is the "general analytic techniques," applicable to any industry or competition, which allow an indepth analysis of such competitive issues as industry evolution, competition profiling, strategy toward suppliers and buyers, entry barriers, and market signals. The second is tools for analyzing "generic structure settings," or characteristic types of industry structures such as fragmented industries, global industries, and declining industries. The third is tools for making such strategic decisions as capacity expansion, integration, entry, divestment, and coalition.
Each of the 18 industries in Cases in Competitive Strategy provides an opportunity for analysis using these tools. The intent of the book is cumulative, building through successively complex situations to an overview of how, when, and why various offensive and defensive strategic decisions can and should be made.
Though the cases in Cases in Competitive Strategy are significant and informative when studied on their own, they were designed to be read and analyzed in combination with the companion volume, Competitive Strategy. Used this way, both the conceptual materials and the cases themselves are mutually reinforcing, establishing in the reader's mind the connection between the theory and the practice of competitive strategy formulation. No student of business strategy can afford to be without this broad-range series of applications of the most talked-about topic in business today.
Customer Reviews:
You think you are good enough to compete?.......2000-03-03
THis is a great book. It's best for peolple who are interested in economics, commerece or management. It introduced the mordern theory on competitive advantages which is developed by Michael E Porter who is a professor at Harvard Business school. In my opinion, I think Porter's theory really braoden my view of various competitive strategies. It's an excellent book for experienced management operator, specially CEOs.
Amazon.com
On Competition, a collection of works by Michael E. Porter, is a critical examination of the dog-eat-dog international economy. A Harvard Business School professor, Porter is one of the most respected and innovative economists of his time. Author of 15 books, he advises key elected officials and business leaders in all parts of the world. On Competition features 13 of his best articles over the past 15 years, including 2 new ones. The essence of Porter's message is that every company, country, and person must master competition to thrive in brutal international and domestic economies. Competition is the key to excellence. Worried about losing your job or your services becoming obsolete? Porter believes that a little fear is good for everyone. "Companies that value stability, obedient customers, dependent suppliers and sleepy competitors are inviting inertia and, ultimately, failure," he writes in his 1990 study and essay "The Competitive Advantage of Nations." Porter is a longtime critic of the short-term thinking on Wall Street that often stifles competition and hurts the economy. In "Capital Disadvantage: America's Failing Capital Investment System," he calls for much lower capital-gains rates for people who invest for the long term. He also urges investors and businesses to start thinking together. He contends that pension funds and institutional investors should get a greater say over the companies they own. It's wacky to have company directors with little expertise or financial interest in the company, he writes.
Porter is often unconventional and asserts that businessmen must be, too. In his essay "Green and Competitive," he shows little sympathy for businesses that complain about environmental regulations. Rules to protect the environment don't have to strangle companies--they can actually improve productivity with the right attitude and approach. Rhone-Poulenc, a French chemical and drug company, proved this when it stopped incinerating a certain byproduct and began selling it as an additive for dyes and tanning. Readable and provocative, On Competition is vital for business, government, and financial leaders as well as small-business people and investors. --Dan Ring
Book Description
For the past 15 years, Michael Porter's work has defined our fundamental understanding of competition and competitive strategy. Presented here for the first time as a collective whole are a dozen articles: two entirely new articles and ten of Porter's articles from the Harvard Business Review. The collection includes a framing introduction from Porter. As a collection, these essays assume a new strength and significance, with each piece augmenting and supporting a complete picture of Porter's perspective on modern competition. To read through this collection is to experience Porter at work: we see first hand as his important theories take shape, deepen, and evolve over time. Organized around three primary categories: Competition and Strategy: Core Concepts, The Competitiveness of Location, and Competitive Solutions to Societal Problems, these articles develop the building blocks that define competitive strategy as we know it. With his unique ability to bridge economics with management, Porter addresses the important issues of competition, from its relationship with environmental regulation to the counterintuitive role of geography in the global economy. A Harvard Business Review Book.
Customer Reviews:
Even More Relevant and More Valuable Today.......2006-05-30
I read this book when it was first published (in 1979) and recently re-read it prior to reading his most recent work, Redefining Health Care which I will also review in the near future. In the Introduction (which then became the first chapter of Competitive Strategy, published in 1980), Porter observes that competition "has intensified over the last decades, in virtually all parts of the world." That is even more true of competition - especially global competition -- during the 27 years since Porter shared that observation. Nonetheless, the core concepts which he and his collaborators rigorously examine remain relevant...indeed, in my opinion, have become even more relevant. Consider these assertions:
1. Competition shapes strategy
2. Successful strategy creates a "fit" among all organizational activities
3. Information can provide a decisive competitive advantage
4. Declining industries require an "end-game" strategy
5. Successful corporate strategy "builds" on three premises: Competition occurs at the business unit level, diversification inevitably adds costs and constraints to business units, and, shareholders can readily diversify themselves.
6. "Moving from competitive strategy to corporate strategy is the business equivalent of passing through the Bermuda Triangle."
Porter carefully organizes the material within three Parts: First, he focuses on competition and strategy for companies at both the level of a single industry and then for multinational or diversified companies; next, he addresses the role of location in competition; and then he Part III, he addresses some important societal issues (e.g. environment, urban poverty, health care, and income inequality), each of which he asserts - and I wholly agree - is "inextricably bound up with economics and, more specifically, with competition."
All but two of the articles originally appeared in Harvard Business Review, the exceptions being "Clusters and Competition: New Agendas for Companies, Governments, and Institutions" and "Competing Across Locations: Enhancing Competitive Advantage through a Global Strategy." In the former, Porter explains his concept of clusters, clusters which are geographic concentrations of firms, suppliers, related industries, and specialized institutions that occur in a particular field in a nation, state, or city. In the latter, Porter brings together the two dimensions of international strategy - location and global networks. As he observes, "The concept of activities, so important to understanding competitive advantage in general terms, provides the basic framework for international strategy as well."
This is by no means an "easy read" but it will generously reward those who read it with appropriate care. By all accounts, Michael Porter is among the most influential and productive knowledge leaders, justly renowned for his cutting-edge thinking on the subject of strategy formulation and implementation but in this volume and in countless others, he also has much of great value to say about competitive and corporate strategy insofar as their global impact is concerned. That said, many of his greatest concerns are those specifically related to the U.S. economy. Hence the importance to me of what he and his collaborators (Claas van der Linde, Elizabeth Olmsted Teisberg, and Gregory B. Brown) have to say in Part III: "Competitive Solutions to Societal Problems."
Those who share my high regard for this volume are urged to check out Porter's other works as well as two recently published books: Kenichi Ohmae's The Next Global Stage and C.K. Prahalad's The Fortune at the Bottom of the Pyramid.
Insightful!.......2005-06-20
Remember when you were a youthful entrepreneur operating a neighborhood lemonade stand? If author Michael E. Porter had walked up to buy a cup of punch from you, he probably would have asked about your business strategy. While you poured, he would have questioned what made your lemonade different from anyone else's. If he liked your lemonade, he'd no doubt give you suggestions on how to earn millions competing in the global marketplace. Ah, if only you had listened... The author, America's dean of competition, has spent two decades asking seminal questions such as, "What is competition? What are its effects? How can society benefit?" The Harvard Business Review previously published 11 of the 13 articles collected in this book. In the two new essays, Porter serves up invaluable concepts. His take on the growing importance of location, despite rising globalization, is a tour de force. Oddly, Porter sees no inconsistency in encouraging "productive competition" in the health care industry while advocating universal health care. For Porter, competition is the ingredient that turns lemons into lemonade. We recommend his latest book to any corporate strategist who seeks ideas on becoming more competitive, starting in your own neighborhood.
Helpful Essays from a Corporate Strategy Icon.......2002-12-07
This book is a collection of essays and articles by Michael Porter alone or with others. Most of them are collected from his writings in the Harvard Business Review although two are new to this book. Think of this as a "Porter's Greatest Hits" kind of thing. That is a bit misleading because his HBR articles are not exactly the same thing as his Competitive Advantage books although the topics are definitely related.
The essays are grouped into three broad sections: 1) Competition and Strategy: Core Concepts, 2) The Competitiveness of Locations, and 3) Competitive Solutions to Societal Problems. Will you find each article of the same high quality? Probably not (again, like a greatest hits collection), but you will find them informative and thought provoking. It is impossible to study for an MBA nowadays without invoking "Porter's Five Forces" in your discussions of competitive and marketing strategy.
This book can help add to your thinking and understanding of how every aspect of our life is in some way part of a competitive context and the ways it improves our standard of living. It will also help you improve your thinking in how to best strategize for and participate in competitive situations.
It would be a mistake to think that Porter advocates for a Hobbesian nightmare of life being nasty, brutish and short. Rather, he is more or less helping us think through the nature of the way competition arises and how to best think about its sources and how to manage it and the traps to avoid.
While Porter's model is used by some as a hammer that sees everything as a nail, it really needn't be used that way and, in its proper context, is very helpful.
Great aggregration of Porter's work.......2001-10-26
'Porter On Competition' is 'lighter' to read than his 'Trilogy', but it nicely consists the core ideas of his work & how it evolved during the past decades. It provides reader a nice overview about how competitive strategy & competitive advantage are applicable to a wide range of areas: from corporation, industry & nation, to social issues such as health care & environment.
Ladies and Gentlemen please! time to get out the Porter.......2001-03-04
You can always tell when it's time to dust off the old Michael E. Porter books and to start to frantically search for better and sounder ways to do business and compete, it's when the economy starts to get a little tighter and begin to show signs of taking a down-turn, like about now.
So, before you fork out good money and time to read the next great and grandiose book on how to make a fast few million bucks on the internet read this first, and you will still be in business this time next year, and after that - maybe.
Book Description
The annual Global Competitiveness Report is widely recognized as the world's leading cross-country comparison of data and information relating to economic competitiveness and growth. Over the years, the Report has become the most authoritative and comprehensive assessment of the comparative strengths and weaknesses of national economies throughout the world. The World Economic Forum continues its tradition of excellence with The Global Competitiveness Report 2003-2004, which provides the most updated and recent data, rankings and analysis of industrialized and emerging economies, and the latest thinking and research from prominent academics and international institution leaders on global competitiveness. The 2003-2004 Report will be even more comprehensive than the previous Reports, assessing at least 100 countries, with the inclusion of several African economies. Data tables have been expanded to incorporate new survey questions on human resource indicators such as health and education as well as new sets of questions on trade, labor policy, and corporate governance. Over 7,300 business leaders worldwide participated in the Executive Opinion Survey, which captures the perceptions and observations of business leaders operating in a given country. The Report consists of three main parts: the first consists of analytical chapters related to competitiveness; the second contains country profiles, while the third part consists of the data tables which contains country rankings for every indicator. Written in a non-technical language and style, the Report appeals to a broad audience consisting of policy makers, business leaders and academics. In the tradition of the Global Competitiveness Programme of the World Economic Forum, the Report brings together a range of leading experts in the field: Academic experts, industry consultants, industry leaders and representatives of multilateral organizations.
Book Description
Many argue that developing countries should now strive for greater Competitiveness. At the same time the term has been widely criticized for being a dangerous obsession: a vague code-word for pro-business, anti-worker, anti-environment, and anti-poor policies. This report is part of a series of Competitiveness Reports first published by the World Economic Forum in 1979. In this 2000 edition, co-authors Jeffrey Sachs and Andrew Warner of Harvard University define Competitiveness more precisely as the ability to achieve rapid economic growth over a long time period. Michael Porter of Harvard University defines a competitiveness index that ranks countries on the ability to achieve high current productivity. The first is called the growth competitiveness index and the second is called the current competitiveness index. According to the growth index, countries are deemed Competitive if they score high on economic indicators that have been shown empirically to be related to recent cross-country growth rates. The rankings that come out of this process show that competitive countries do not tend to be high-inequality countries nor anti-environment countries. This book includes these two competitiveness rankings, an executive summary that describes the framework behind these two rankings, and further articles on globalization, economic creativity, the underpinnings of productivity, environment, the euro and education. The book also includes country-profiles that summarize the strengths and weaknesses of each country, and an extensive body of data from the Forum's executive opinion survey.
Customer Reviews:
Mundania.......2001-01-29
Good for research but not exactly coffee-table blurb.
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