Michael Porter - Estratégia

[Music] thank you Michael for being with us how would you define strategy what is strategy and very simple term well in very simple terms it's what's going to make a particular organization different and provide a competitive advantage basically competition is destructive when companies are basically competing on the same thing that forces competition to gravitate to price strategy is is finding a different way to compete to create a different sort of value for the customer which allows a company to prosper to achieve superior profit what is not strategy simply implementing best practices buying the latest machine

using the internet to communicate with your customers there are lots of things that managers do that they have to do to actually keep making the company more productive and more efficient and to attain the kind of latest technology and knowledge about management all those things are a necessity but they're not strategy strategy is not about doing the same thing better strategies about finding that different place for the organization to deliver value but what what makes it challenging is you have to do both of these things at the same time you got it you got to

keep assimilating best practices but at the same time having real clarity about what's gonna make you he wrote a book 25 years ago that has remained at the top of the list of the strategy books what were the key messages in that book well yeah I've written a number of books about strategy I think the the the my first really major book on strategy was a book called competitive advantage and I think the really major message of that was really how to look at the industry in which you compete and how to think about what

causes industry profitability and how by understanding that a company can improve its its own position in that book I introduced so-called five forces framework that in any industry you've got to look at the power of the customer the power of the supplier the barriers to entry the threat of substitute products and the nature of the rivalry itself and that those Five Forces collectively define really the profit potential of any business and and and this was I think a breakthrough in in the field because really we had no systematic way of looking at industry uh the

next book I was a book called competitive advantage in which I really talked about how to look at a company's own position and introduce the concept of the value chain any company when it competes is is simply conducting a lot of activities and marketing activities procurement activities service activities and so forth and the value chain provided a framework for understanding how a particular company was competing versus its competitors and therefore sharpening the distinctions in terms of its position I would also say that equally important of the first two books is an article called what is

strategy which really tried to get at the fundamental distinction between someone where some fool would challenge the concept of industry if you take for example this device what industry is it it's a phone it's a computer business or even a restaurant is it in the food business and the entertainment business more and more the boundaries of industries are less clear well I'd say that the boundaries of industries can certainly evolve and shift and change I'm not sure that they're not clear at any given point in time by by thinking about you know fundamental economics we

need to we need to draw a set of boundaries at that moment and so what we call the phone before is that that industry definition is probably now a broader definition now whenever we look at an industry and whenever you look at how companies compete we've got to always be sensitive to you know where are the right boundaries and how are those boundaries evolving what I have found for whatever it's worth is that industry boundaries change less and more slowly than some authors would have us believe somehow authors would have us believe that every business

is constantly restructuring itself every day and and and there are some and and they tend to be concentrated in the technology space you pulled out a a blackberry and and and I think that's a little bit of a you know sort of a loaded example if you will that said even in industries as mundane as distributing food why you can't what do you think about the new social networks the Facebook's the youtubes what are the implications of these phenomenons I can tell you that that they really have changed the way that young people you know

particularly younger people relate and communicate with each other and there's lots of related ideas like blogs and and and various other devices to to communicate and I think that that that application is is is undoubtedly going to at least persist for for for the for the foreseeable future what is less clear is how those forms of communication are actually going to work their way into what I would call the mainstream economy and in mainstream business because I think that it's it's not clear how they connect in some in some very clear way to value creation

or commerce or what what people will integrate into their work as opposed to their leisure time so or even can can you read their strategy because they don't charge I mean it's hard to see how they will stay well it's a little bit like the internet bubble that is you know gee whiz look at what we can do look at all the people that use it but ultimately if nobody's willing to pay and there's not some kind of a way of really realizing the value then then ultimately you you don't have a sustainable phenomena you

know for every 100 internet companies they were probably only two that survived and and that was because only those two were doing something that really could capture the value they were creating