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.

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.