Michael Porter
Michael Porter
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Full Name and Common Aliases
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Michael Eugene Porter is a renowned American economist, author, consultant, and researcher who is widely regarded as one of the most influential thinkers in business strategy.
Birth and Death Dates
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Born on May 4, 1947, Michael Porter is still active in his career.
Nationality and Profession(s)
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Michael Porter is an American national with expertise in economics, management, and entrepreneurship. He is a professor at Harvard Business School (HBS), where he has taught since 1972.
Early Life and Background
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Porter was born in Ann Arbor, Michigan, to a family of modest means. His father, Eugene Porter, was an economist who worked for the U.S. government. Growing up, Michael showed a keen interest in economics and mathematics. He earned his Bachelor's degree from Princeton University in 1969 and Ph.D. in Business Economics from Harvard University in 1973.
Major Accomplishments
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Porter has made numerous contributions to the field of business strategy. His most significant work includes:
Developing the concept of Competitive Advantage, which posits that a company can achieve sustainable success by creating value for its customers and differentiating itself from competitors.
Creating the Value Chain, a framework used to analyze an organization's internal activities and identify opportunities for improvement.
Proposing the Five Forces Model, a tool used to assess the competitive dynamics of an industry.Notable Works or Actions
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Porter has written several influential books, including:
"Competitive Strategy: Techniques for Analyzing Industries and Competitors" (1980)
"The Competitive Advantage of Nations" (1990)
"Redqueeting Capitalism" (2004)
He is also a prolific speaker, having delivered numerous keynote addresses at conferences worldwide. His ideas have been widely adopted by businesses, governments, and non-profit organizations.
Impact and Legacy
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Porter's work has had a profound impact on the business world. His concepts have become cornerstones of strategic management, influencing the way companies approach competition, innovation, and value creation. He is also recognized for his contributions to public policy, having advised governments on economic development strategies.
Why They Are Widely Quoted or Remembered
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Porter's influence extends beyond academia and business circles. His ideas have shaped the way people think about strategy, competition, and value creation. As a result, he is widely quoted in media outlets, such as The New York Times, The Wall Street Journal, and Harvard Business Review.
His enduring legacy serves as a testament to his groundbreaking work, which continues to inspire new generations of business leaders, policymakers, and scholars.
Quotes by Michael Porter
Strategy is the creation of a unique and valuable position, involving a different set of activities.
Approaches to differentiating can take many forms: design or brand image, technology, features, customer service, dealer network, or other dimensions.
The more competitors perceive the prospect of dogged, bitter retaliation to the point of severely hurting everyone’s profits, the less likely they are of initiating the chain of events in the first place. This is analogous to the situation in which the robber says, “stick ’em up, I want your money,” and the deranged-looking victim says “If you take it, I will explode this bomb and kill us both!
A production line with high levels of model variety is more valuable when combined with an inventory and order processing system that minimizes the need for stocking finished goods, a sales process equipped to explain and encourage customization, and an advertising theme that stresses the benefits of product variations that meet a customer’s special needs.
Cash Cows: Businesses with high relative share in low-growth markets will produce healthy cash flow, which can be used to fund other, developing businesses.
If a firm can spot an industry in which the fragmented structure does not reflect the underlying economics of competition, this can provide a most significant strategic opportunity. A company can enter such an industry cheaply because of its initial structure. Since there are no underlying economic causes of fragmentation, none of the investment costs or risks of innovations to change underlying economic structure need be borne.
This is analogous to the situation in which the robber says, “stick ’em up, I want your money,” and the deranged-looking victim says “If you take it, I will explode this bomb and kill us both!
Indeed, one of the most important functions of an explicit, communicated strategy is to guide employees in making choices that arise because of trade-offs in their individual activities and in day-to-day decisions. Improving.
Understanding industry structure is also essential to effective strategic positioning P. 26.
Competition on dimensions other than price – on product features, support services, delivery time, or brand image, for instance – is less likely to erode profitability because it improves customer value and can support higher prices. p.32.