Title: “Understanding Michael Porter: The Essential Guide to Competition and Strategy”

Author: Joan Magretta

Publisher: Harvard Business Review Press

Price: $24.95

Michael Porter's groundbreaking ideas on competition and strategy have unfolded over three decades and are spread across a dauntingly long list of publications. Every manager can name individual pieces of his work - competitive advantage, the value chain, five forces - but no one, not even Porter himself, has put the entire puzzle together to reveal it as an integrated whole. This lucid, concise audio book does just that. Written with Porter's full cooperation by Joan Magretta, his former editor at Harvard Business Review, this book provides an engaging summary of Porter's ideas and an invaluable synthesis of this important body of work, making clear how each of Porter's powerful concepts relates to the others and, most important, to the practical realities managers face.

Modern thinking about competition and strategy begins with Porter's frameworks. They are the most widely used in practice by managers around the world. But as Magretta points out, Porter is often misunderstood and his frameworks misapplied. Magretta's own wide-ranging business experience allows her to identify the most common of these misconceptions - among them, the deeply held but dangerous belief that competition is about being the best. Understand Porter and you will see why competing to be the best sparks an inevitable race to the bottom.

Understanding Michael Porter will enable all leaders throughout any organization to grasp Porter's seminal ideas about competition and strategy and deploy them to achieve competitive success.

In this book, the author distills Porter's core concepts and frameworks into a concise guide for us who run businesses. Her examination of Porter's work on value chains, metrics and “five forces” analysis is especially valuable and she provides plenty of references for those who want to study the original material more closely. In an interview with Professor Porter, Ms. Magretta asked him what he sees as the common strategic mistakes that companies make. Here is a summary of his response:

Trying to compete to be the best by going down the same path as everybody else and thinking that somehow you can achieve better results. This is caused by confusing operational effectiveness with strategy.

Confusing marketing with strategy by building strategy around the demand side of the equation and focusing on the value proposition. A vigorous strategy involves a tailored supply side or value chain element as well. Strategy connects choices on the demand side with the inimitable choices about the supply side or value chain. You cannot have competitive advantage without both.

Overestimating your strengths. This creates an inward-looking bias. For example, you might perceive customer service as a strong area. So that becomes the "strength" on which you attempt to build a strategy. But today, everyone has good customer service or they parish. The same can be said for quality.

Ms. Magretta has a knack for asking good questions. In a series of books starting with Built to Last, Ms. Magretta has addressed ...