Michael porter's five forces of competition model. The threat of the emergence of new competitors. External links and notes

Introduction Curriculum Vitae Main Contribution Evaluation Conclusion
Curriculum Vitae Born May 23, 1947 in Ann Arbor, Michigan; in 1969-1977 was a reservist in the US Army; received the rank of captain; in 1969 he received a BSE degree from Princeton University, and then an MBA (1971) and a Ph.D. (1973) from Harvard University; in 1973 he was accepted to work at Harvard University and in 1981 he was promoted to professor; in 1983-1985 Member of the Presidential Commission on Industrial Competition.
Main works
Interbrand Choice, Strategy and Bilateral Market Power (1976)
Competitive Strategy: Techniques for Analyzing Industries and Competitors (1980)
Competitive Advantage: Creating and Sustaining Superior Performance (1985) Competition in Global Industries * (1986)
The Competitive Advantage of Nations (1990)
Summary
Michael Porter's main scientific goals were to link enterprise strategy to applied microeconomics - two areas previously considered independently of each other - and to create models and methods for conducting research. His second major book, Competitive Strategy, revolutionized approaches to enterprise strategy; M. Porter's third book, Competitive Advantage, reflected his transition from analyzing competition to creating lasting competitive advantage. Later M. Porter concentrated his efforts on global application
their strategic principles, including the ideas he developed about the nature of global competition and the national determinants of competing power. Introduction
As one of the most influential experts on strategy problems, Michael Porter has largely determined the main direction of the development of theories of strategy and competition (primarily in a global context). His books on competitive strategies and competitive advantages are read and discussed all over the world; you are unlikely to meet (at least in the West) holders of an MBA who do not know by heart two of his most famous models - the "five forces" and the value chain. Based on these basic models, M. Porter performed a simple, but extremely useful analysis of the determinants of competition and the global forces acting on it, as well as the ways and means of ensuring the long-term competitiveness of the enterprise. Biographical data
Michael Porter was born in 1947 in Michigan into the family of an army officer. He managed to make an amazing scientific career. After graduating from Princeton University, M. Porter received his MBA and Ph.D. degrees from Harvard University, and he completed each stage of his studies with honors. Shortly after defending his doctoral dissertation, he received his first research position at Harvard University, and in 1981, at the age of thirty-four, became a professor. From 1981 to the present, M. Porter continues to work at Harvard.
Throughout his scientific career, M. Porter has been studying competition, its elements and determinants. Oi has also served as a consultant to many leading companies and advisor to governments in countries such as Canada and New Zealand; in the early 1980s. he became a member of the Industrial Competition Commission, set up by President R. Reagan. Main contribution
In his work "Competitive Strategy" (1980) M. Porter outlined a revolutionary new approach to enterprise strategy. Rejecting the approaches used in this area, M. Porter used the laws of microeconomics to analyze the process of developing a strategy. The first step was to consider strategy as a principle that could be applied not only to individual companies, but to entire sectors of industry. Analysis of the strategic requirements of various industries allowed M. Porter to develop the first of his models, the so-called model of five forces (see Fig. 1).
The importance of each of the five forces can vary from industry to industry, however, taken together, they determine the importance of long-term profitability. These


forces affect the prices set by firms, the level of acceptable costs and the amount of investment required to compete successfully in a particular industry. The threat of new competitors appearing on the market limits the market share, and hence the potential profits; bargaining power of buyers and suppliers leads to lower margins of profitability; the availability of substitute goods can lead to a decrease in the output of the industry. The magnitude of each of the five forces is a function of "industry structure", which is defined in the same way as "the main economic and technological characteristics of the industry" (1990: 35).
His second model describes the so-called generic (generic) strategies. According to M. Porter, each company has four main strategic choices (see Fig. 2). In order to determine a future generic strategy, two problems need to be addressed: (1) choose a space to maintain competitive struggle, i.e., decide whether the company will strive for a broad market or will be limited to specific target segments; (2) choose competitive advantage- cost leadership or product differentiation.

Cost Leadership Differentiation
Focus on costs Focus on differentiation

Wide
goal
REGION
COMPETITION
Limited
goal

COMPETITIVE ADVANTAGE Lower costs Differentiation

A source-. Porter (1980)

M. Porter makes it clear that there is no single best strategy in any industry; in particular in the industries he cites — automobile and shipbuilding — different firms use different strategies. Although each industry has the same five competitive forces, reactions to them, as noted above, can be of a different nature.
Finally, M. Porter introduces the concept of the value chain (see Fig. 3). In essence, the value chain takes into account all the actions of the firm that lead to an increase in the value of its product. The main activities are those related to the production of goods and their delivery to the consumer. Ancillary activities directly add value, such as technological development, or enable the company to operate more efficiently: “firms gain a competitive advantage through awareness of new lines of business, new procedures, new technologies, or new inputs” (1990: 41). M. Porter believes that the value chain is extremely important, as it shows that the firm is more than a simple set of activities; all actions of the firm are linked to each other and through these interrelationships the necessary trade-offs can be made. In order to successfully respond to external industry influences and ensure the achievement of competitive objectives, the firm must decide which of these activities should be optimized.

In Competition in Global Industries (1986), M. Porter and his colleagues apply the principles of analysis competitive strategy to those operating on international markets companies. As before, building on the results industry analysis M. Porter defines two types of international competition. According to his classification, there are multi-domestic industries in which each country has its own competition (for example, private banking) and global industries. At the same time, such a global industry is “an industry in which the competitive position of a firm in one country largely depends on its position in other countries, and vice versa” (1986: 18). As examples of such industries, the author singles out the automotive industry and the production of semiconductor technology. According to M. Porter, the key difference between the two types of industries is that international competition in multi-domestic industries is optional - companies can decide for themselves whether to compete in foreign markets or not - while competition in global industries is inevitable.
International competition is characterized by the fact that the activities that form the value chain are distributed among several different countries... Therefore, in addition to choosing the space for competition and the type of competitive advantage, companies can also choose their strategy options, taking into account the types of activities that form the value chain (where they are carried out, in other words, what is their geographical concentration), and their coordination (how closely they are related to each other). with a friend). This gives rise to four possible options: high concentration, high coordination (a simple global strategy with a value chain of actions carried out in one region or country, and characterized by high centralization); high concentration, low coordination (strategy based on export and decentralization marketing activities); low concentration, high coordination (strategy of large foreign investments in the implementation of geographically dispersed, but well-coordinated operations); low concentration, low coordination (country-oriented strategy in which decentralized subsidiaries focus on their own markets).
And there is no single best strategy; each strategy has its own application depending on the nature of competition in the industry, which is determined by five main forces. There may also be cases of scattering of some of the activities that determine the value chain, and the concentration of others; on the other hand, high dispersion may require deeper coordination. It is important to remember that competitive advantage is determined mainly by how, rather than where, a particular activity is carried out.
In "Competitive Advantage of Nations" ("International competition" ("Competitive advantages of nations")) (1990) M. Porter develops the analysis of competition, defining its national and sectoral determinants. Saying aloud
the belief that “nations will ultimately succeed in particular industries, as their home environments are the most dynamic and most active, and stimulate and nudge firms to increase and expand their advantages” (1990: 71), the scientist identifies the determinants of the competitive forces acting at the national level. He names four determinants that can be found in every country and in every industry: working conditions or the presence in a country of factors of production such as the skill required to produce a product. work force or industrial infrastructure; demand conditions or market characteristics of a specific product or service; the existence of supporting or related industries such as internationally competitive suppliers or distributors; the nature of the firm's strategy, its structure and characteristics of rivalry with other companies, including factors such as the organizational and managerial climate, as well as the level and nature of internal competition.
These determinants form the basis for the forces of competition within industries: "The determinants of national advantage reinforce each other and grow over time, favoring an increase in competitive advantage in the industry" (1990: 132). The nature of competitive advantage often leads to increased concentration both in individual industries (engineering in Germany, electronics in Japan) and in geographic areas (in northern Italy or in the Rhine regions and in Bavaria in Germany).
An important point, on which M. Porter lays special emphasis, is that national competitive advantage is often achieved due to an initially unfavorable environment, when nations or industries are forced to actively respond to a challenge. “Selected factor deficiencies, powerful local buyers, early market saturation, skilled international sourcing, and intense internal rivalry can be critical to creating and maintaining an advantage. Pressures and adversity are powerful drivers of change and innovation ”(1990: 174). It is for this reason that when new industrial forces try to change the existing order, nations experience ups and downs (in terms of competitive advantage). Grade
! "M 1 V. ¦, fi
The idea of ​​competitive advantages, which is of value in itself, first outlined by M. Porter, perhaps becomes even more important in the analysis of global competition and the identification of international competitive advantages. As M. Porter himself explains, the use of the found by him fundamental concepts(five forces, generic strategies, value chain) to international strategy has greatly expanded and deepened our understanding of this subject: -
; * International strategy was usually presented as a choice between general gt; ¦ global standardization and local specifics, or as a contradiction between economic (large high-performance production facilities) and political imperatives (local situation, local production) ... and neither one nor the other characteristic is took into account the complexity of the options for choosing an international strategy. A firm's choice of its international strategy implies a search for a competitive advantage through global configuration / coordination throughout the value chain ... The essence of international strategy is. not in finding a compromise between concentration and dispersion, but in weakening or eliminating the contradictions between them (1986: 35).
Taking the issue of choosing between full globalization and full localization for the management of companies from the agenda and providing a basis for developing a more advanced strategy, M. Porter offers them ample opportunities and additional freedom of maneuver.
Some shortcomings of M. Porter's works have caused a number of fair criticisms. When free trade demands and growing exports bring elements of international competition to the domestic markets of virtually all industries, the distinction it introduced between multi-domestic and global industries may disappear. Its determinants of competition are considered by some scientists to be too simplistic and do not allow for sufficient choice; however, the attractiveness of M. Porter's models lies precisely in their simplicity; it encourages readers to use them as a starting point to explore trade-offs and connections between different elements. When used properly, these models are extremely flexible options conducting an analysis that will help clarify the situation and determine the general direction of movement (especially within the framework of an international strategy). Conclusion
Michael Porter's work was provided to firms effective methods analyzing competition and developing strategies in both domestic and international markets. Having identified the point of intersection of economic and strategic objectives, M. Porter demonstrated the possibilities of their joint research, which allowed him to make an important contribution to the development of our understanding of strategy and competition.
Morgen Whitzel, London Business School Durham University Business School


Porter, Michael (1947), Porter, Michael E.

1. Introduction
2. Biographical information
3. Main contribution
4. Evaluation
5. Conclusion

Brief biographical information

Born May 23, 1947 in Ann Arbor, Michigan;
in 1969-1977 was a reservist in the US Army; received the rank of captain;
in 1969 received a degreeBSEfrom Princeton University, followed by an MBA (1971) and a Ph.D. (1973) from Harvard University;
in 1973 he was recruited to Harvard University and in 1981 was promoted to professor;
in 1983-1985 Member of the Presidential Commission on Industrial Competition.

Main works

Interbrand Choice, Strategy and Bilateral Market Power (1976)
Competitive Strategy: Techniques for Analyzing Industries and Competitors (1980)
Competitive Advantage: Creating and Sustaining Superior Performance (1985)
(1986)
The Competitive Advantage of Nations (1990)

Summary

The main Michael Porter's scientific goals was to link enterprise strategy to applied microeconomics, two areas previously considered independently of each other, and to create models and methods for conducting research. His second major book,CompetitiveStrategy(“Competitive Strategy”), revolutionized approaches to enterprise strategy; the third book by M. Porter,Competitive Advantage(“Competitive Advantage”) reflected his move from analyzing competition to creating lasting competitive advantage. Later, M. Porter concentrated his efforts on the global application of his strategic principles, including his ideas about the nature of global competition and national determinants of competing power.

1. Introduction

As one of the most influential strategistsMichael Porterlargely determined the main direction of development of the theory of strategy and competition (primarily in a global context). His books on competitive strategy and competitive advantage are read and discussed around the world; you are unlikely to find (at least in the West) an MBA who does not know by heart two of his most famous models - the five forces and the value chain. Based on these basic models, M. Porter performed a simple, but extremely useful analysis of the determinants of competition and the global forces affecting it, as well as the ways and means of ensuring the long-term competitiveness of the enterprise.

2. Biographical information

Michael Porterwas born in 1947 in Michigan in the family of an army officer. He managed to make an amazing scientific career. After graduating from Princeton University, M. Porter received his MBA and Ph.D. degrees from Harvard University, and he completed each stage of his studies with honors. Shortly after defending his doctoral dissertation, he received his first research position at Harvard University, and in 1981, at the age of thirty-four, became a professor. From 1981 to the present, M. Porter continues to work at Harvard.
Throughout his scientific career, M. Porter has been studying competition, its elements and determinants. He has also served as a consultant to many leading companies and advisor to governments in countries such as Canada and New Zealand; in the early 1980s. he became a member of the Industrial Competition Commission, set up by President R. Reagan.

3. Main contribution

In work Competitive Strategy(1980) M. Porter outlined a revolutionary new approach to enterprise strategy. Rejecting the approaches used in this area, M. Porter used the laws of microeconomics to analyze the process of developing a strategy. The first step was to consider strategy as a principle that could be applied not only to individual companies, but to entire sectors of industry. Analysis of the strategic requirements of various industries allowed M. Porter to develop the first of his models, the so-called modelfive forces

The importance of each of the five forces can vary from industry to industry, however, taken together, they determine the importance of long-term profitability. These forces affect the prices set by firms, the level of eligible costs, and the amount of investment required to compete successfully in a given industry. The threat of new competitors entering the market limits market share, and therefore potential profits; bargaining power of buyers and suppliers leads to lower margins of profitability; the availability of substitute goods can lead to a decrease in the output of the industry. The magnitude of each of the five forces is a function of the “industry structure”, which is also defined as “the main economic and technological characteristics of the industry” (1990: 35).
His second model describes the so-calledgeneric (generic) strategies ... According to M. Porter, each company has four main strategic choices. In order to determine the future generic strategy, it is necessary to solve the following two problems: (1) choose the space for competition, that is, decide whether the company will strive for a wide market or will be limited to specific target segments; (2) choose a competitive advantage - cost leadership or product differentiation.

M. Portermakes it clear that there is no single best strategy in any industry; in particular, in the industries he cites as examples - automobile and shipbuilding - different firms use different strategies. While the same five competitive forces operate in each industry, reactions to them, as noted above, can vary.
Finally, M. Porter introduces the concept of the value chain (see Fig. 3). In essence, the value chain takes into account all the actions of the firm that lead to an increase in the value of its product. The main activities are those related to the production of goods and their delivery to the consumer. Ancillary activities directly add value, such as technological development, or enable a company to operate more efficiently: “firms gain a competitive advantage through awareness of new lines of business, new procedures, new technologies, or new inputs” (1990: 41). M. Porter believes that the value chain is extremely important, as it shows that the firm is more than a simple set of activities; all actions of the firm are linked to each other and through these interrelationships the necessary trade-offs can be made. In order to successfully respond to external industry influences and ensure the achievement of competitive objectives, the firm must decide which of these activities should be optimized.

In work Competition in Global Industries (“Competition in Global Industries”) (1986)M. Porterand his colleagues apply the principles of competitive strategy analysis to companies operating in international markets. As before, based on the results of industry analysis, M. Porter defines two types of international competition. According to his classification, there aremulti-domestic industries in which each country has its own competition (for example, private banking) andglobal industries ... At the same time, such a global industry is “an industry in which the competitive position of a firm in one country largely depends on its position in other countries, and vice versa” (1986: 18). As examples of such industries, the author singles out the automotive industry and the production of semiconductor technology. According to M. Porter, the key difference between the two types of industries is that international competition in multi-domestic industries is optional - companies can decide for themselves whether to compete in foreign markets or not - while competition in global industries is inevitable.
International competition is characterized by the fact that the activities that form the value chain are distributed among several different countries. Therefore, in addition to choosing the space for competition and the type of competitive advantage, companies can also choose options for their strategy, taking into account the types of activities that form the value chain (where they are carried out, in other words, what is their geographical concentration) and their coordination (how closely they are related to each other) ... This gives rise to four possible options:

      1.high concentration, high coordination (a simple global strategy with a value chain of actions carried out in one region or country, and characterized by high centralization);
      2. high concentration, low coordination (strategy based on export and decentralization of marketing activities);
      3. low concentration, high coordination (strategy of large foreign investments in the implementation of geographically dispersed, but well-coordinated operations);
      4. low concentration, low coordination (country-oriented strategy in which decentralized subsidiaries focus on their own markets).
And there is no single best strategy; each strategy has its own application depending on the nature of competition in the industry, which is determined by five main forces. There may also be cases of scattering of some of the activities that determine the value chain, and the concentration of others; on the other hand, high dispersion may require deeper coordination. It is important to remember that competitive advantage is determined primarily byhow, and not where this or that kind of activity is carried out.

V Competitive Advantage of Nations (“International Competition” (“Competitive Advantages of Nations”)) (1990) M. Porter develops the analysis of competition, defining its national and sectoral determinants. Expressing the belief that “nations will ultimately succeed in individual industries because their home environments are the most dynamic and most active, and stimulate and nudge firms to increase and expand their advantages” (1990: 71) , the scientist identifies the determinants of the competitive forces acting at the national level. He names four determinants that can be found in every country and every industry:

      1. production conditions or the presence in the country of such factors of production as a skilled labor force or industrial infrastructure necessary for the production of products;
      2. the conditions of demand or the characteristics of the market for a particular product or service;
      3. the existence of supporting or related industries such as internationally competitive suppliers or distributors;
      4. the nature of the firm's strategy, its structure and characteristics of rivalry with other companies, including such factors as the organizational and managerial climate, as well as the level and nature of internal competition.
These determinants form the basis for the forces of competition within industries: “The determinants of national advantage reinforce each other and grow over time, favoring an increase in competitive advantage in the industry” (1990: 132). The nature of competitive advantage often leads to increased concentration both in individual industries (engineering in Germany, electronics in Japan) and in geographic areas (in northern Italy or in the Rhine regions and in Bavaria in Germany).
An important point, on which M. Porter lays special emphasis, is that national competitive advantage is often achieved due to an initially unfavorable environment, when nations or industries are forced to actively respond to a challenge. “Selected factor deficiencies, powerful local buyers, early market saturation, skilled international sourcing, and intense internal rivalry can be critical conditions for creating and maintaining an advantage. Pressures and adversity are powerful drivers of change and innovation ”(1990: 174). It is for this reason that when new industrial forces try to change the existing order, nations experience ups and downs (in terms of competitive advantage).

4. Evaluation

Valuable in their own right, first set forthM. Porterthe idea of ​​competitive advantage is perhaps even more important in the analysis of global competition and the identification of international competitive advantages. As M. Porter himself explains, the application of the fundamental concepts he found (five forces, generic strategies, value chain) to international strategy significantly expanded and deepened our understanding of this subject:
International strategy was usually presented as a choice between global standardization and local specifics, or as a contradiction between economic (large, highly productive production facilities) and political imperatives (local situation, local production) ... and neither of these characteristics took into account the complexity of the options for choosing an international strategy ... A firm's choice of its international strategy implies a search for a competitive advantage through global configuration / coordination along the entire value chain ... The essence of an international strategy is not to find a compromise between concentration and dispersion, but to weaken or eliminate the contradictions between them (1986: 35).

Removing the choice between full globalization and full localization for company management and providing a basis for developing a more advanced strategy,M. Porteroffers them ample opportunities and additional freedom of maneuver.
Some shortcomings of M. Porter's works have caused a number of fair criticisms. When free trade demands and growing exports bring elements of international competition to the domestic markets of virtually all industries, the distinction it introduced between multi-domestic and global industries may disappear. Its determinants of competition are considered by some scientists to be too simplistic and do not allow for sufficient choice; however, the attractiveness of M. Porter's models lies precisely in their simplicity; it encourages readers to use them as a starting point to explore trade-offs and connections between different elements. When used properly, these models provide extremely flexible analysis options that can help clarify the situation and determine the general direction of movement (especially in the framework of international strategy).

5. Conclusion

Works by Michael Porter provided firms with effective methods for analyzing competition and developing strategy in both domestic and international markets. Having determined the point of intersection of economic and strategic objectives,M. Porterdemonstrated the possibilities of their joint research, which allowed him to make an important contribution to the development of our understanding of strategy and competition.

Material from the site

Porter's biography

Michael Eugene Porter is an American economist, leading specialist in the field of competitive strategy and economic development of countries and regions. Professor at Harvard Business School, where he runs a program designed for new CEOs large corporations.
Michael Porter's writings are recognized by governments, corporations and academics around the world.
This is a vivid example of a person who used all his abilities to 100%, skillfully setting priorities and goals in life, achieving them.
Born into the family of an army officer in the town of Ann Arbor, Michigan, on May 23, 1947. Has two daughters, is divorced and lives in Brooklyn, Massachusetts.


Michael Porter's education

State high school to New Jersey, then college.
Graduated from Princeton University in 1969 with a degree in aerospace engineering.
This was followed by Harvard Business School in 1971 with an MA with honors, followed by a PhD in business economics in 1973.


Porter's career

Was appointed by Ronald Reagan Chairman of the Industrial Competitiveness Commission under the President.
Professor Porter has served as a senior advisor to the senior management of many companies, both in the United States and abroad. Here is a far from complete list:

  • Shell,
  • Procter & Gamble,
  • Scott Mirale-Gro,
  • Sysco DuPont Caterpillar - Holland,
  • Semiconductor Manufacturing Company - Thailand.

He currently serves on the board of directors of two public companies: Thermo Fisher Scientific Corporation and Parametric Technology Corporation.
He also serves as Senior Strategy Advisor for the Boston Red Sox, baseball's main team.
Has advised numerous educational and public organizations in terms of strategic development.
He is actively involved in helping governments in the United States and abroad.
Plays an active role in American economic policy of the executive branch, Congress, and international organizations.
Positions held, membership and foundation:
- On the Executive Committee of the Competitiveness Council.
- In the private sector competitiveness of the American organization, the main executive directors large corporations, trade unions and universities.
- Chairman of the Board of Trustees for the US Secretary of Commerce's Annual Corporate Award.
Professor Porter has been an advisor to national leaders in many countries, assessing their competitiveness. These include Armenia, Colombia, Ireland, Nicaragua, Russia, Rwanda, Saudi Arabia, Singapore, Taiwan and the United Kingdom.
He personally led the main studies of the economic strategy of the governments of such countries as: Canada, India, Kazakhstan, Libya, New Zealand, Portugal and Thailand.
Currently, he is the head of the Teaching and Learning Center. K. Roland Christensen.

Awards and prizes

1) 1973 - Harvard University Economics Prize for Research in Industrial Organization.
2) 1980 - Graham and Dodd Awards from Financial analytical organization.
3) 1985 - Prize of the Academy of Management for the book "Competitive Advantage".
4) 1991 - Charles Parlin Award for Outstanding Contribution in Strategy and Marketing from the American Marketing Association.
5) 1997 - Laureate of the Adam Smith Prize, for exceptional contribution to the professional economics of enterprises from the National Association of Business Economists.
6) 2001 - The annual Porter Award is established in Japan. A similar award was established in 1951 in honor of Deming for the contribution and development of quality in manufacturing in Japan.
7) 2003 - the highest award from the Academy of Management for contribution to scientific management.
8) 2005 - Honorary Fellow of the Royal Society of Edinburgh. Also honored with the J.K. Gelbraith Medal of American Economy Agriculture, noted by the South Carolina authorities for providing assistance and assistance in economic development.
9) 2007 - Porter's book "On Health Care" wins the Hamilton Award for Outstanding Work.
10) 2008 - For the first time in history, an unprecedented award from the US Department of Commerce.
Received six awards to them. McKinsey (marketing award), including the first four places in the history of the award were awarded to Porter.
He holds honorary doctorates in the United States and nine other countries around the world.
Received national awards in Spain and Nicaragua.

Professor in the Department of Business Administration, Harvard Business School, Distinguished Specialist in Learning economic competition, including competition in international markets, competition between countries and regions. Developed a theory of countries' competitive advantages.


Michael Porter was born in 1947 in Michigan into the family of an army officer. He graduated from Princeton University, then received an MBA and a PhD from Harvard University, completing each stage of study with honors. Since 1973 works in Harvard business School (was the youngest professor in the history of this college). Spent a huge research work to study over 100 industries in different countries.

Professional awards, prizes:

Winner of the McKinsey Awards for his articles three times.

George R. Terry Book (Academy of Management) award for "Competitive Advantage as Outstanding Contribution to Management Development."

Reward Adam Smith(National Association of Industrial Economists).

Seven honorary doctorates.

Consulting companies and government agencies

Michael Porter is one of the leading experts in the study of the nature of competition. Throughout his career, Porter has acted as a business consultant for world-renowned companies, including, for example, AT&T, DuPont, Royal Dutch/ Shell and Procter & Gamble, served the boards of directors of Alpha-Beta Technologies, Parametric Technology Corp., R&B Falcon Corp and ThermoQuest Corp.

Porter also served as a government consultant. He was appointed to the Presidential Commission on Industry Competitiveness by President Reagan and was also invited by Massachusetts Governor William Weld to serve as Chairman of the Governor's Council of economic growth and technology. M. Porter has advised the governments of countries such as India, New Zealand, Canada and Portugal, and is currently the leading regional strategy development specialist for the presidents of Central America. In the 1990s, he advised the South Korean government.

In 2006, the Russian Government commissioned M. Porter to conduct a study to analyze the country's competitiveness. According to the economist, the main problem in Russia is a one-sided focus on raw materials and the presence of a mass of vertically integrated companies. “To become competitive, key corporations do not have to build on the concept of national security... The concept of national leaders died with General Motors - nobody believes in it. The heart of the economy is small mobile companies. ”

Professor Porter has pioneered the revitalization of America's old inner cities. M. Porter is the founder and chairman non-profit organization Initiative for a Competitive Inner City (USA), which seeks to accelerate the development and growth of the old city center based on business, and offers a new approach to its economic development.

Scientific views

Porter, as a popularizer of the concept of an economic cluster, showed that the competitiveness of a company is largely determined by the competitiveness of its economic environment, which, in turn, depends on the basic conditions (common resource) and competition within the cluster.

Porter developed a well-known methodology for analyzing competitiveness, and also described the stages of growth in the competitiveness of the national economy (from the stage of "primary factors", such as cheap labor, to the stage of competition based on innovation and the last stage - competition based on wealth).

According to Michael Porter, the stronger the competition in the domestic market of a country and the higher the demands of buyers, the more likely the companies from this country will succeed in international markets (and vice versa, the weakening of competition in the national market usually leads to the loss of competitive advantages).

Porter's fundamental book The Competitive Advantage of Nations was published in Russian under the title International Competition.

 

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