The Financial Times Guide to Strategy, 5th Edition

CHAPTER 2

AN ECOLOGICAL VIEW OF CORPORATE STRATEGY

Writers on Corporate Strategy generally fall into one of two competing camps. In the red corner, there is the positioning or portfolio-based approach. This says that companies should seek to be in attractive markets where the firm can establish a competitive advantage. The high priest of this movement is Harvard professor Michael porter,2 who believes in micro-economic analysis of the segments where competition occurs and who states bluntly that ‘Corporations don’t compete, business units do.’

In the blue corner, however, sits the resource-based view of strategy, which stresses the uniqueness of each corporation (not business unit) and claims that the success of firms is determined by the strength ...