Week 6 Reading Reflection

In the reading, I was surprised that when the five forces that shape industry competition are strong, there is actually little profit to be made in that area of industry. Upon further thought, this makes more sense, but it was initially confusing. For example, in the airline industry where there are so many other options, strong threats of new entry into the market, and where suppliers have a high bargaining power, airline companies can see a low return. In industries where these forces are less strong, like software or cell phones, companies stand to make a higher profit. I agree with most of what the author presents here, but would ask him whether the threat of substitutes is really something that can be stopped- especially in America, where capitalism and small business have been cornerstones of our economy. More products enter the market each and every day, which could both help and hurt other businesses.