Introduction: Michael Porter's "Competitive Strategy" Author(s): Nicholas Argyres and Anita M.

McGahan Reviewed work(s): 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: http://www.jstor.org/stable/4165838 . Accessed: 05/02/2013 10:03
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Academy of Management

Executive, 2002, Vol. 16, No. 2

Introduction: Michael Porter's CompetitiveStrategy

Nicholas Argyres and Anita M. McGahan

The publication in 1980 of Competitive Strategy: Techniques for Analyzing Industries and Competitors 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 important questions but poor in robust frameworks for analyzing them. As they disseminated among academics 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 Strategy is available in 17 languages and is in its 53rd printing. Executives around the world continue to rely on the industry analysis and competitive positioning 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 Institute for Strategy and Competitiveness at the Harvard 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
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issues that are particularly relevant to executives and academics today. In the interview, Porter discussed innovation and its relationship to his core frameworks, and the relevance of speed, knowledge, and dynamic capabilities to competitive positioning. The interview also addressed Porter's views on emergent strategies, partnerships and antitrust enforcement, environmental alliances, policy, the resource-based view of the firm, sociological 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 (Argyres) 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 responded graciously each time. His responses reflected 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 considered alternative points of view and adapted his ideas either to incorporate or reject them. For example, 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 sophisticated ideas about antitrust policy, accounting policies, education reform, environmental proPorter was tection, and urban revitalization. preparing for a major speech on antitrust when we interviewed him. His views on antitrust are based on the idea that corporate and governmental interests 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

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Academy of Management

Executive

May

innovation. 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.

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 interests are familiar. McGahan met Porter as a student 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 discussion 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 business. Porter's response, which emphasizes that competition tends to overwhelm initial status differences, reveals an underlying faith in the fundamental fairness of competitive processes. The commentaries that accompany the Porter in-

terview, by Jay Barney, Adam Brandenburger, and John Bachmann, provide context and perspective on the relevance of Porter's ideas. Barney, a distinguished authority on competitive strategy, describes the state of the field when Competitive Strategy was first published and reflects on how the book's frameworks have influenced both strategy research and practice. Brandenburger, a noted game theorist, strategy professor, and author of a book on strategy,' leading practitioner-oriented demonstrates the robustness of the theoretical underpinnings of the two major frameworks in Competitive 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 practice, academic research, and the business school curriculum. Competitive Strategy, the first of his books to present frameworks for use by practitioners, 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).

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Nicholas Argyres is an associate professor in the Strategy & Policy Department at the Boston University School of Management. He studies the relationships between the strategies and intemal organization of firms; the determinants of organizational boundaries; govemance of university technology transfer; and He organizational politics. currently serves on the editorial board of the Academy of Management Journal. Contact: nargyres@bu.edu.

Anita M. McGahan, professor of strategy & policy at the Boston University School of Management, is also a fellow at the Harvard Institute on Strategy and Competitiveness. She is the author of over 50 articles and case studies on competitive advantage, industry evolution, and company financial performance. She earned an MBA and a Ph.D. in business economics from Harvard. Contact: amcgahan@bu.edu.

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