India's leading management portal MBAUniverse.com has officially tied-up with UK based Thinkers 50, to present this global ranking.
Our readers will remember the first article in this series was on none other than CK Prahalad who was ranked as the # 1 Business Guru on this ranking. Second article explored Bill Gates' business wisdom.
What makes Michael Porter the Strategy Guru?
Michael E. Porter is the Bishop William Laurence University Professor at the Harvard Business School. He has an almost "living legend" status in the world of management thinking. He has written eighteen books and countless articles. In addition to his teaching he consults widely with the Monitor Group which he helped establish. Above and before everything he is an educator, either by the spoken or by the written word. But he is not a performer or management superstar. The Economist once commented that he was as likely to write a best-selling management blockbuster like … (the reader can no doubt supply an example) as to give a lecture wearing a bra and stockings (what an awful image!). Few of his books are available in paperback. He has advised both the public and private sectors throughout the world.
Porter studied mechanical and aerospace engineering at Princeton and then switched to business, earning an MBA and a PhD in economics from Harvard. He later joined the faculty there.
Porter has always been obsessed by competition. His first widely-read book Competitive Strategy (1980) is now in its 63rd imprint. In it he analyses competition. There is
- natural competition and tension between existing players in an industry
- threats of new entrants to the market
- the prospect of substitute products or services
- the bargaining power of suppliers
- the bargaining power of consumers
There are three ways to compete effectively:
- produce a product or service either more cheaply,
- produce something that is better and different from the competition. He defined the latter as "differentiation".
- dominate a niche market and close out the competitors.
He did not believe many companies could do all three or even two at a time. The particular strategy chosen depended on what type of company you had. He noted five:
- global
- fragmented
- emerging
- mature
- declining
The company also had to look at the series of links that went into its provision or production. He called this The Value Chain (and the name has stuck). He isolated five primary activities in any value chain.
- internal logistics -–getting the necessary materials
- production or provision
- external logistics and distribution;
- marketing
- after-sales services
These were each accompanied by a range of secondary activities. Each company's value chain in turn fitted into a wider value system.
Porter subsequently moved from competition between firms to competition between nations. In The Competitive Advantage of Nations (1990) he examined how some states were wealthy and why others were not. The important element here were National Value Systems. He visualised these as akin to a four-sided diamond. The four components were:
- domestic rivalry – the tougher it was the better
- traditional economic resources
- infrastructure, including the education level of its citizens
- the cluster phenomenon
The latter was very important, thought frequently overlooked. These were concentrations of particular types of industry in defined geographical areas. They embraced the low-tech Portuguese cork-makers and Silicon Valley. These areas can use economies of scale to attract workers and increase efficiency, as well as cross-subsidization and skills pools.
Allan Greenspan: Money matters!
Alan Greenspan was the chairman of the Board of Governors of the Federal Reserve of the United States from 1987 to 2006. Greenspan was lauded for his handling of the Black Monday stock market crash that occurred very shortly after he first became chairman, as well as for his stewardship of the Internet-driven, "dot-com" economic boom of the 1990s. This expansion culminated in a stock market bubble burst in March 2000 followed by a recession beginning in late 2000 and continuing through 2002.
He currently works as a private advisor through his company, Greenspan Associates LLC.
Greenspan attended New York University (NYU), and received a B.S. in Economics ( summa cum laude) in 1948, and an M.A in Economics in 1950. Greenspan went on to Columbia University , intending to pursue advanced economic studies, but subsequently dropped out. Much later, in 1977, NYU also awarded him a Ph.D. in Economics.
In 2007 Greenspan boosted his guru ratings by writing 'The Age of Turbulence: Adventures in a New World' which was one of the most publicized business book of the year. The book made headlines with its derision for the current US Administration's economics, and political affairs in US. The volume is also a memoir of Greenspan's life -- from his upbringing in New York to the rise to the top of the world's most powerful central bank. The book's true value lies in its second half, where the author offers his views on everything from Russia to financial regulation and the inevitable slowdown of globalization.
Next week: How another strategy guru Gary Hamel (#5) and Blue Ocean proponents ChanKIM and Renee Mauborgne (#6) are influencing the global business thinking. This special Thinkers' series is presented by India's leading management portal MBAUniverse.com in tie-up with UK based Thinkers 50. Thinkers 50, produced by UK based management experts Des Dearlove & Stuart Crainer of Suntop Media, is a bi-annual guide to which thinkers and ideas are most influential in today's times. ( www.thinkers50.com)
