Q1) Like most qualitative concepts the word “only” is pretty strong. Generally yes, the business cycles of companies are comprised of temporary stages (hence the term cycle). The business cycle isn’t necessarily correlated to local or global, which was something I tried to get at earlier. Some companies are counter-cyclical to the macro (national or global) economy, but still follow their own business cycle (health insurance companies, for instance). The key with business cycles is you could look at a time series and see that they follow (to some varying degree) a pattern.
Q2) “An industry’s structure can be reshaped in two ways: by redividing profitability in favor of incumbents or by expanding the overall profit pool. Redividing the industry pie aims to increase the share of profits to industry competitors instead of to suppliers, buyers, substitutes, and keeping out potential entrants. Expanding the profit pool involves increasing the overall pool of economic value generated by the industry in which rivals, buyers, and suppliers can all share.”
Based on this logic I’d say there’s no reason why structural changes couldn’t result in recurrent profitability. Reading #31 gives an example of how Microsoft capitalized on structural change, and if you remember they almost lost an anti-trust case.
Q3) This is no easy task and I’d bargain looking at structural changes is probably one of the things that sets great equity investors (growth or value) apart from the herd. I’d imagine some of the key areas to look would be technological changes, educational trends, immigration patterns, regulations, and who the key players in an industry are (and are now not).