Page 214 - (DK) The Business Book

2122
21

IN CONTEXT
THE STRONGEST FOCUS
Competitive strategy
COMPETITIVE FORCES KEY DATES
1921 US economist and
statistician Harold Hotelling
DETERMINE THE says that as long as there are
profits to be had in a market,
more and more vendors will
PROFITABILITY arrive to serve it, until it
reaches saturation point.

OF AN INDUSTRY 1979 Michael Porter’s “How
Competitive Forces Shape
Strategy” is published in
PORTER’S FIVE FORCES Harvard Business Review.
2005 W. Chan Kim and Renée
Mauborgne publish Blue
Ocean Strategy, suggesting
that companies should aim for
uncontested markets rather
than compete with each
other in existing markets.
2008 Michael Porter writes
The Five Competitive Forces
That Shape Strategy.

n order to survive, companies
have to understand and
I respond to competition. So
it is natural to look at immediate
competitors and established rivals
to develop a strategy. However,
this can restrict thinking, define
competition too narrowly, and
ignore other strategic forces. In
the 1970s, economist and strategist
Michael Porter changed people’s
thinking on strategy.
Porter’s 1979 article “How
Competitive Forces Shape Strategy”
showed that awareness of wider
competitive forces—those beyond
the obvious competing companies—
can help an organization
understand the structure of its