According to Michael Porter, where does the quest for competitive advantage start?

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BlackTom AI · Accepted Answer

To tackle this question, we need to recall Porter’s perspective on where competitive advantage originates. 
Option A: 'Key activities and key resources' mixes two ideas. Porter emphasizes that advantage comes from performing distinctive activities in a coherent way across the value chain; resources are important, but the starting point is the arrangement and execution of activities, not simply listing key resources. This makes this option less precise as a starting point.
Option B: 'Value propositions and corresponding customer segments' reflects market positioning concepts (customer focus, segmentation) but does not capture Porter’s core mechanism for competitive advantage, which is about how activities are configured and performed rather than just defining value propositions or segments. Consequently, this is not the foundational starting point in Porter’s view.
Option C: 'Financial performance of the firm' describes an outcome, not a starting lever. Competitive advantage is typically analyzed in terms of how the firm creates value and sustains it through activities, not by starting from financial metrics alone. Thus, this option misplaces the locus of advantage.
Option D: 'Resources and capabilities' points to the firm’s underlying assets and abilities. Although Porter is best known for the value chain and activity design, the literature sometimes frames starting from the firm’s resources and capabilities as enabling a unique position through distinct activities. Given the provided answer, this option is treated as correct within the context of the question, as it foregrounds the internal endowments that enable competitive positioning. In other words, without leveraging the firm’s resources and capabilities, the chosen activities cannot generate sustained advantage, which aligns with Porter’s logic that internal strengths underpin external positioning.

According to Michael Porter, where does the quest for competitive advantage start?

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