Annotaion on Porter Article.

Porter, Michael E. "How Competitive Forces Shape Strategy." Harvard Business Review Mar-Apr. (1979): 91-101. Web. 2 Feb. 2011.

This article is not specific to the hospitality industry but the components discussed are very useful.  Mr. Porter discusses the five forces that govern competition in an industry.  At the center is the rivalry amongst competitors.  Porter explains that a business within any industry must fight for control with competitors.  Bringing attention to your business and becoming a strong, dominate force is what every business wants and what every industry needs.  Circling around this statement are four aspects that can help or hurt an industry.  First is the threat of new entrants.  With every new business that arises Porter explains, it will cause changes economically and create more competition.  Second, is the threat of substitute products or services.  What this means is that companies will try and sell substitute brands of certain products or services at cheaper prices.  By doing so, they become more appealing to customers than the original simply due to the price.  Third is the bargaining power of suppliers.  Porter explains that suppliers can raise prices and reduce quality of products or services at their own will.  At the same time the fourth aspect, the bargaining powers of buyers can do the same.  Customers can influence industries to lower prices but still demand a high quality product or service.  Porter’s theory is that to have a successful industry strategy there must be a balance between all five forces. 

I think that this article can be very useful to me throughout my career.  Mr. Porters theory makes perfect sense.  All five points that he talks about are influences that any business will have to deal with.  This is why Dr. Shiring recommended it because he know that what Mr. Porter said is very important.  I think that if a manager were to take this concept and apply it to their field of study that it would work.  Once actually in the industry I feel that Porters Model will be something that I apply to my work. But at the moment I do not know whether or not this article will help me with my research. Simply because I have not yet chosen a topic.