ABOUT THIS BOOKIn this study of industrial organization, Michael Porter extends the field in three major areas. First, he develops a comprehensive model of the relationship between manufacturers and retailers. The model is used to test hypotheses in such important areas as how consumer products are differentiated, the effects of advertising, and the determinants of profitability in consumer goods manufacturing. Second, he proposes a new perspective for analyzing industry competition which focuses not only on the overall structure of industries but also on the strategies of individual firms within them. Third, he presents a new approach to the theory of consumer demand that emphasizes the consumer's search for information in choosing among brands and the importance of seller information outlays. Statistical tests in a wide sample of consumer goods industries support the new theories advanced here and lead to a major improvement in understanding industry performances.