Below are notes I've taken while reading the book. This is not a comprehensive summary but thoughts and ideas I've found valuable. I recommend reading these notes after you've read the book first to compare our thoughts. I can't stop you if you don't want to so I guess you can use the below as an idea of what you may get out of the book yourself if you read it... though if it ain't clear it's cause you didn't listen to me. 

Two barriers to entry: When the product is truly unique, or you can do it for cheaper than the rest

Truly unique products: brand, reputation (add desirability like denomination of origin i.e. Bordeaux wine), governments, network effects

Cost: economies of scale (spread through - R&D, purchasing, manufacturing, marketing, distribution), market niche (relative size >absolute size)

MES - minimum efficient scale: the optimal volume you need to achieve lowest cost

Large companies don't necessarily have scale but diseconomies of scale because they aren't as efficient. Coordination + management costs run high

For a company to earn return above cost of capital, the business industry must be imperfect. So that the business can make something better or cheaper in a sustainable way. Generally, you want high barriers to entry and low barriers to exit (you want it to be easy for your competitors to quit instead of sticking around. ex. McK, BCG)

Don't look at MES for the business. Look at MES for each activity! designing is different from assembling vehicles

For each profitable activity look deeper to analyze what the "uncopiable singularity" that makes this activity is

Any conceptual activity that is separable from the rest is like owning a separate business (i.e. restaurant owner is a property owner and food service owner. Because the restaurant being in that location is the opportunity cost of not renting it out for income)

4 steps to industry analysis: 1) Determination of the basic activities 2) Analysis of each one of those activities 3) Positioning of the different actors 4) Possible evolution of the activities

Strategy - the art of earning money in a sustainable fashion

Profitability of company changes when rules change. One of following: 1) technological change (lowering of cost to do things will increase MES, which reduces max number of competitors in industry and only the fast ones can survive to set up new barriers), changes in regulation, changes in demand (demand alone is meaningless without barriers because competitors can whittle margins to nothing)

Assessing vertical integration - does act carrying out 2 activities under 1 company i) decrease costs or ii) increase quality perceived by clients? Just accumulating activities is like adding businesses for diversifications sake. No value

Many times, we see companies with many activities, but that is because they had 1 activity that was highly profitable and sustainable, and all the other activities are surrounding it!

Vert integration doesn’t make sense if it is to just lower costs to avoid margins of supplier. I have to make some element of overall cost disappear, it has to completely eliminate an activity(business) from integration

Understand that depending on the business the company should have a tendency towards centralization and towards localization. Ex. airplane companies don't need to be localized but they need to have centralized ops. Food companies need to be localized and decentralized ops. where as telecom companies need to be centralized but also localized

Strategic logic: a business is good precisely because it is difficult to enter, thus purchase prices will reflect that. And generally, if it is easy to enter, it probably is not a good business

"Put all your eggs in one basket and watch it closely" - specialized company has much less operational risk than a diversified company since management will know the corp strat for it. It is only one business remember!

Criteria for successful merger - i) it must follow strategic logic ii) there must be clear authority from the beginning iii) price must include possibility of synergies being much lower than forecast and they may be achieved with a delay up to two years

The market leader is not the largest but the one that has the highest profitability. A competitor's acquisition should not be a threat if it will only increase the headache for management

Companies can buy sales, profits and volume. BUT they CANNOT buy profitability! Generally buying a profitable business will be very expensive and it won't be profitable in the beginning

Strategic thinking - 1) which customer need or segment need is not satisfied or sufficiently served well? What is the criteria for demand 5-10 years out? 2) what strategies are capable of responding to demand in value creative way through entry barriers