1) What was the biggest surprise for you in the reading? In other words, what did you read that stood out the most as different from your expectations?
As I was reading through Porter’s article, I was surprised to realize that there were five forces that shape industry competition. I hadn’t realized that competition sparks from five various forces. The threat of new entrants, bargaining power of buyers, threat of substitute products or services, and bargaining power of suppliers are the five different forces that shape competition, which stood out to me in that if an existing entrepreneur can pinpoint these five points, he or she will better maximize profits.
2) Identify at least one part of the reading that was confusing to you.
The return on invested capital (ROIC) is something that was somewhat confusing to me. The ROIC is the appropriate measure of profitability for strategy formulation, not to mention for equity investors.
3) If you were able to ask two questions to the author, what would you ask? Why?
One of the questions I would ask the author is: what do you mean when you say that faced with pressures to gain market share, managers can spark new kinds of competition that no incumbent can win? The other question I would ask is: how do you define the relevant industry? It seems difficult to define the industry in which competition takes place because there can be so many competing firms and similar products.
4) Was there anything you think the author was wrong about? Where do you disagree with what she or he said? How?
I do not think that there was anything the author was wrong about. The five forces that shape strategy were unique and helped me realize how to better identify competition and how to gain market share.
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