Value chain analysis is key, and both for-profit and nonprofit organizations need a tailored value chain. The unique value chain should serve a specific target market and meet specific needs at an acceptable relative price that no one else offers. Every organization should focus on maximizing profit margins, not market share. Defining your strategy requires choices. Trade-offs are necessary to stand out from others by providing superior performance. Commonality leads to pricing wars, low profit margins, and lower probability of survival.
The book is intended for those who seek insight into their industry and the unique needs, if any, being served by their organization. Managers and their teams will benefit from Michael Porter’s proven framework to recognize good or bad strategy and explain why some companies are more successful than others in the same industry. By working with Porter’s framework, organizations can better understand themselves, their industry, their competition, and their customers. Nonmanagers can relate Porter’s framework to their careers to create a unique personal competitive advantage to stand out in their department and in their organization.
Porter’s framework isn’t a step-by-step list to understand competition and create a good strategy. Rather it’s a guide down a path that leads to greater understanding. Porter created a general theory that applies to for-profit and nonprofit organizations. Chasing the same markets as your competition will most likely lead to failure via low profits and high costs. Companies need to differentiate themselves in order to thrive. For nonprofits, this means providing unique value to those you serve.
Readers will find this book very helpful in distilling and explaining Porter’s concepts via real-world examples. You’ll finish with an understanding of what strategy is and isn’t and how to start thinking in ways that add value to both your organization and your personal performance.