Week 6 Reading Reflection

After finishing the reading for this week I was most surprised by the statement that "Industry structure drives competition and profitability, not whether an industry is emerging or mature, high tech or low tech, regulated or unregulated.". This surprised me because I have traditionally thought, as I think most people do, that outside "magical" forces dictated the profitability of an industry. I believed that the simple fact that an industry is emerging or that it is specialized in products/services that are highly used by the average consumer played the highest role in determining profitability. 

One part of the reading that was confusing to me was how the power of suppliers affects profitability. Specifically how "supplier groups can credibly threaten to integrate for- ward into the industry." The wording here is what confuses me, as I'm not sure if the author is referencing the ability for suppliers to grow to become a competitor in an industry or the consequences of industry participants making more money relative to the suppliers themselves. 

Two questions I would ask the author are what are some more specific examples of high exit barriers and what are the best ways to gain market share (from the perspective of a corporation) without engaging in "innovation for its own sake". While I understand that company owners and workers can be very dedicated to their field and in maintaining the health of the company overall, I don't understand how those factors contribute to high exit barriers. It seems to me that if any company truly wanted to exit the industry it could do so, presumably with a new player entering the market or existing players taking up that market share. I'm also interested in learning different strategies for gaining market share, although I realize that some methods (like adapting to emerging substitutes) are mentioned in the article. 

Considering that the author, Michael E. Porter, is much more qualified on this subject than I am I find no reason to think that he is wrong in his statements. As stated at the beginning of the article, Porter's five forces have changed the way companies view their role in being profitable in an industry and I believe this is for good reason.