Week 6 Reading Reflection

This week, we were not reading the normal textbook by Kuratko.  Instead, we focused on an article written by Michael Porter of the Harvard Business Review.  The article was:  "The Five Competitive Forces That Shape Strategy."  Porter's postulation is that there are 5 main forces that drive competition and force people to create effective strategies.  Four of those forces are external, and one is internal.  The internal force is rivalry among existing competitors.  The external ones are threat of new entrants, bargaining power of buyers, threat of substitute products or services, and bargaining power of suppliers.  The biggest surprise to me this week was just how many potential threats there were and how difficult it is t succeed.  In the category of "new entry," there were several barriers.  These ranged from supply and demand to government policy.  With each force, there were more and more ways for a company to buckle under the pressure and fail.  Even if one was able to get a desired product to market, while maintaining a competitive price, they would then have to fend off existing competitors and substitute products.  That was what jumped out at me the most in this week's reading.  The reading seemed pretty clear, and I didn't have anything I disagreed with.  If I could ask Mr. Porter a few questions, I would focus on surviving in such a tough environment.  I would ask him how to stand out from substitute products.  Porter said that substitutes often get overlooked because they don't have to just be one particular thing.  The example he gave was of father's day gifts, and how neckties and tools could be substitutes.  So, I would ask him what was the best way to prepare for that sort of issue.  This article was very well written, and I thoroughly enjoyed it.  I feel much better educated on the forces that shape competition and the strategy that goes into it.