Michael Porter’s theory has shaped a generation of academic research and business practice.
Understanding the competitive forces, and their underlying causes, reveals the roots of an industry’s current profitability while providing a framework for anticipating and influencing competition (and profitability) over time. A healthy industry structure should be as much a competitive concern to strategists as their company’s own position. Understanding industry structure is also essential to effective strategic positioning. Defending against the competitive forces and shaping them in a company’s favor are crucial to strategy.
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