Week 6 Reading Reflection

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? 

That capital is not always as big of a barrier as presented. Since investors can expect returns, and are well-collateralized (in the example of airlines), the capital barrier is a lot lower than could be expected.

2) Identify at least one part of the reading that was confusing to you.

When the author says Government is a factor, but not a force. It seems like the government could easily step in and say “this is illegal” and allow it no more (i.e. BitCoins, e-cigarettes [not yet regulated, but there is scrutiny]). I realize that this is rare, but it seems like operating within regulation would be a force that acts upon a company rather than simply a factor to account for as it could damage entire industries.

3) If you were able to ask two questions to the author, what would you ask? Why?

Do you think it is dangerous to always look to competition for the answers? Is it possible that some industry threats are just houses of cards that could fall at any moment, therefore you lean down your own business TOO much in response, only to realize that the competition is dealing unfairly or misrepresenting their numbers?

Do you believe that investors and executives are in competition with each other when it comes to developing a positioning strategy? Do you think the executives have their hands tied too much by investor risk-aversion? Not necessarily in competition, but forces acting upon each other – if the investor would just step aside and let the executive do their job hired to do, would the company be more profitable?

4) Was there anything you think the author was wrong about? Where do you disagree with what she or he said? How?

Companies only using the “threat” of competitive entry to hold back their profitability was confusing to me, as it seems like you can only plan so much (i.e. divert resources as an insurance plan of sorts), but when a competitor is, and never will be, present, why should one worry about them – especially when resources are burned thinking competitors are going to do one thing, only to be completely disrupted when the competitor acts completely different than expected. Maybe this is something more relevant to huge corporations, but, at least for small to mid-size businesses, if the company just focuses on their own actions (while not necessarily ignoring competition) and innovates on their own, then there should never be too much competitive threat.