Hey everyone,
This is my weekly post dedicated to our weekly reading. This week's reading is the first reading of the semester to come from a source other than our Entrepreneurship book so that is pretty exciting (I guess). Instead, this week's reading comes from the Harvard Business Review and is an article written by Michael Porter titled "The Five Competitive Forces that Shape Strategy".
The thing about this reading that truly surprised me was the fact that such a large part of strategy revolves around analyzing and digging into the structure of the industry itself. After breaking down the five forces, Porter broke each of them down into even more specific factors. For example, for the force of "Threat of Entry", he analyzed another seven or eight factors that could contribute to that single force on the industry. I was completely unaware that there were so many different factors that can have an immense impact on a single industry.
To me, the part that was the most confusing revolved around the "Rivalry Among Existing Competitors" section. I am not too sure if rivalry among competitors is supposed to be a bad thing and why that would deter other companies from entering a market. The part about changing industry structure was also quite confusing to me.
Two questions that I would ask the author:
1. When entering a market, what do you believe is the most important out of the five forces to be aware of?
2. What makes these five "forces" so distinct compared to the possibly infinite factors that could perhaps affect a certain industry?
The only thing I did not really agree with in this reading would have to do with the rivalry among competitors. I believe that in any profitable industry or market, there will have to be very heavy competition so I do not understand why this would deter others from entering. To be unwilling to take on competition is to be unwilling to ultimately succeed.
Until next time,
-Bryce
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