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By Michael E. Porter

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Extra info for Competitive advantage: Creating and Sustaining Superior Performance - With a New Introduction

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Introducing new autom ated m anufacturing technologies can have this effect, as can the introduction of new inform ation system technology to manage logistics or design products on the com puter. Innovative new practices unconnected to technology can also have this effect. Forging cooperative relations with suppliers can lower input costs and improve input quality, for example, as described in Chapter 3. The ability to be both low cost and differentiated is a function of being the only firm with the new innovation, however.

Part IV of the book draws on the concepts in this book and Competitive Strategy to develop broad principles for offensive and de­ fensive strategy. Chapter 13 discusses the problem of form ulating com ­ petitive strategy in the face of significant uncertainty. It describes the concept of industry scenarios, and shows how scenarios can be constructed to illuminate the range of future industry structures that might occur. The chapter then outlines the alternative ways in which a firm can cope with uncertainty in its choice of strategy.

The same principles involved in attacking a leader can be used in offensive strat­ egy against any competitor. Principles of Competitive Advantage 2 The Value Chain and Competitive Advantage Competitive advantage cannot be understood by looking at a firm as a whole. It stems from the m any discrete activities a firm performs in designing, producing, marketing, delivering, and supporting its prod­ uct. Each of these activities can contribute to a firm’s relative cost position and create a basis for differentiation.

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