Summary of Why Firms Succeed

Choosing Markets and Challenging Competitors to Add Value

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Why Firms Succeed book summary
Your company has distinctive capabilities. Once you figure out what they are and how to deploy them, they can be powerful weapons in the marketing war.


5 Overall

4 Applicability

6 Innovation

5 Style


Using the approach of an economics business model, John Kay defines the major characteristics firms have used to succeed where others fail. To get on the right side of that fence, he says, work your corporate strengths. Kay maintains that success hinges on distinctive abilities a firm can muster to add value for its particular customers. These unique traits include skills, reputation, and relationships. While the book (and the reader) may choke a bit on the academic charts and examples, real meat is hidden here. On the plus side, Kay writes in a fairly clear, spare style that makes complex ideas easy to follow. On the minus side, he repeats the same basic principles and ideas. While executives might glean some real support for developing their companies’ strengths, getabstract recommends his book primarily to business school academics and to those top-level managers interested in studying and applying theoretical models.

In this summary, you will learn

  • Why you should compare yourself with your rivals to determine what unique value your company can offer
  • How to turn your distinctive capabilities into strategic assets
  • Why long-term client relationships will ultimately determine your success


The Importance of Adding Value
The critical importance of adding value shows up when you compare businesses that fail with those which succeed. Disney, BMW, and Honda succeeded by identifying their distinctive capabilities, selecting the most suitable markets, and creating good competitive...
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About the Author

John Kay is a professor of economics at the London Business School, where he has served as a director of the Center for Business Strategy. He wrote Foundations of Corporate Success, which was published in England in 1993. He adapted this book for the American market in Why Firms Succeed.

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