Hello, folks!
Today I have a spin on the weekly reading review. This week, I was asked to review Michael Porter's The Five Forces that Shape Competitive Strategy!
The biggest surprise of this week's reading was seeing the 1992-2006 list of US industries listed in order of profitability. It lists the soft drink industry as second-- before prepackaged software and even pharmaceuticals! I think it is fascinating to see charts like this, because you can see trends over time from past studies to see which industries are gaining (or losing) steam.
I did not find any part of the reading that was confusing to me. Michael Porter is very concise in his words and gives many examples. However, if I could ask him two questions, I would ask him:
1) Do you think any of these forces are 'stronger' than the others, or do you think that they all weigh the same from a business perspective? I ask this because a company might easily adapt to new substitutes, but it might have an issue with new competitors, or vice versa. Are they all equally important?
2) Is it inevitable that a large, famous company will eventually be 'pushed out' by these forces? I am curious as to what Porter thinks, as new companies bring fresh ideas and solutions, but people may be not as tempted to begin a business venture knowing that they too will one day be 'pushed out.'
I really agreed with what Porter said in his article. It makes a lot of sense and really helps to give a clearer picture on how companies interact with each other, suppliers, customers, and, of course, time.
That's all! Good night!
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