CLA 2 Comprehensive Learning Assessment 2 CLO 2 CLO 5 CLO 8p

Cla 2 Comprehensive Learning Assessment 2 Clo 2 Clo 5 Clo 8please

Cla 2 Comprehensive Learning Assessment 2 – CLO 2, CLO 5, CLO 8 Please read the following scenario and answer the questions below by providing the analysis based on the relevant theories and applicable examples. If your business earns superior profits, existing and potential competitors will do their best to get a piece of the success. It is essential for firms to examine a variety of business strategies to enhance the prospects of sustainable profitability. Out of all factors that impact an industry’s sustainable profitability, this CLA2 assessment focuses on the most damaging threat to sustainable profit, the entry of competitors into the market. Entry into the market heightens competition and reduces the margins of existing firms in a wide variety of industry settings.

For this reason, the ability of existing firms to sustain profits depends on how barriers to entry affect the ease with which other firms can enter the industry, including the formation of new companies (e.g., Wendy’s entered the fast-food industry in the 1970s); globalization strategies by foreign companies (e.g., Toyota entered the U.S. automobile market in the mid-20th century); and the introduction of new product lines by existing firms (e.g., Apple now sells the popular iPhone in addition to computers). Your CLA2 is a paper of a minimum of eight pages, APA formatted, including one Industry Report and one Company Report, where you recommend to the CEO how to create a moat and prevent the threat of entry to the market.

Industry Report

Please select an industry and write a rigorous industry report that incorporates the following elements: the market structure of the industry by determining the concentration ratio and how the market structure affects entry; the nature of the industry and the network effects; the production structure, including initial capital requirements, sunk costs, and economies of scale; and the prospects of the industry in the future with regard to technological innovations.

Company Report

Assuming you are managing a company in this industry, write a company report that analyzes long-term strategic decision making. The report should recommend policies that ensure sustainable competitive advantage and long-term profitability. Include discussion of: sustainable market share and how to achieve it; branding, reputation, and a loyal consumer base; managerial efficiency regarding strategic decisions such as integration and merger activity, vertical and horizontal integration; and measures to prevent rivals’ entry through pricing and cost policies like limit pricing, predatory pricing, and strategies to raise rivals’ fixed or marginal costs.

Paper For Above instruction

The assignment involves conducting a comprehensive analysis of a chosen industry and a specific company within that industry to develop strategic recommendations for sustainable profitability and competitive protection. The industry report requires a detailed overview of market structure, network effects, production costs, and technological prospects, providing a foundation for understanding entry barriers. The company report focuses on strategic policies—including branding, operational efficiency, and pricing strategies—that can build a moat around the company, deterring new entrants and sustaining long-term growth.

Paper For Above instruction

In this paper, I select the technology industry, specifically the smartphone sector, as the focus for analysis. The smartphone industry is characterized by high market concentration, significant network effects, substantial economies of scale, and ongoing technological innovation, all of which influence entry barriers and competitive dynamics.

Market Structure of the Smartphone Industry

The smartphone industry is dominated by a few major firms, notably Apple, Samsung, and Huawei, accounting for a large percentage of global market share. This high market concentration suggests an oligopolistic structure, where a few firms exert significant control over pricing, innovation, and marketing strategies. The concentration ratio, which measures the total market share of the top firms, exceeds 70% globally. Such a concentrated market complicates entry for new competitors due to established brand loyalty, extensive distribution networks, and economies of scale enjoyed by incumbents. Entry barriers are thus substantial, limiting the proliferation of new entrants and reinforcing the dominant players' market power.

Nature of the Industry and Network Effects

The smartphone industry demonstrates strong network effects—value increases with the number of users and compatible devices. Apple's ecosystem exemplifies this; loyal consumers benefit from integrated services and seamless device compatibility, creating a barrier for new entrants lacking such ecosystem lock-in. Additionally, technological standards (e.g., Android OS, iOS) create switching costs, augmenting network effects that reinforce incumbents’ market positions and discourage innovative disruptions by new entrants.

Production Structure, Capital Requirements, and Economies of Scale

Developing a competitive smartphone product requires significant initial capital investment in research and development, manufacturing facilities, and marketing. Sunk costs are considerable, especially for establishing economies of scale—mass production reduces per-unit costs and enhances profit margins. Incumbent firms leverage large-scale manufacturing, supplier relationships, and distribution channels to outcompete smaller entrants and sustain profitability.

Prospect of the Industry and Technological Innovations

Future prospects for the smartphone industry rely heavily on technological innovation—such as foldable screens, 5G connectivity, and augmented reality capabilities—driving consumer demand. Despite high competitive pressures, continuous innovation allows established firms to reinforce their market positions and create new entry barriers, maintaining their strategic dominance in the evolving landscape.

Strategic Recommendations for the Company

To ensure sustained competitive advantage and long-term profitability, the company must adopt strategies that reinforce its market position and deter potential entrants. Key policies include strengthening brand loyalty, optimizing operational efficiency, and implementing strategic pricing tactics.

Achieving Sustainable Market Share

The company should invest in ongoing innovation and brand differentiation to secure a loyal customer base. Enhancing after-sales service, developing a unique ecosystem (hardware, software, accessories), and consistent marketing campaigns bolster customer retention. Integrating customer feedback into product development helps maintain relevance and preference among consumers.

Branding, Reputation, and Loyalty

Cultivating a strong brand reputation through quality, innovation, and social responsibility builds consumer trust. Loyalty programs, exclusive features, and superior user experience deepen consumer commitment, making it costly for competitors to lure customers away. Establishing a robust online community enhances brand advocacy and consumer engagement.

Managerial Efficiency in Strategic Decisions

Efficient management of strategic decisions, including mergers, acquisitions, and alliances, can bolster market power and innovation capacity. Vertical integration—such as controlling supply chains for key components—reduces costs and enhances product quality. Horizontal integration through strategic partnerships can expand market reach and technological capabilities.

Preventing Entry with Pricing and Cost Strategies

The company should employ limit pricing—setting prices low enough to deter new entrants without sacrificing profitability. Predatory pricing, carefully executed, can suppress potential competitors during market entry phases. Raising rivals’ fixed or marginal costs—by investing heavily in proprietary technology and economies of scale—raises barriers to entry and sustains incumbent dominance.

Conclusion

In conclusion, the smartphone industry exemplifies a highly competitive yet strategically guarded sector where barriers to entry are established through market concentration, network effects, economies of scale, and technological innovation. To secure a sustainable competitive advantage, firms must focus on branding, customer loyalty, operational efficiency, and strategic pricing strategies. These measures will enable a company to create a formidable moat against new entrants and ensure long-term profitability in a dynamic industry.

References

  • Baily, M., & Solow, R. (2007). Economics, Sixth Edition. Pearson Education.
  • Bresnahan, T. F., & Trajtenberg, M. (1995). General purpose technologies ("GPTs") and their impact on economic growth. Handbook of New Growth Theory.
  • Cassiman, B., & Wu, Y. (2010). Do firms learn from their international innovation efforts? Research Policy, 39(2), 236-251.
  • Porter, M. E. (1980). Competitive Strategy. Free Press.
  • Shapiro, C., & Varian, H. R. (1999). Information Rules: A Strategic Guide to the Network Economy. Harvard Business School Press.
  • Schumpeter, J. A. (1934). The theory of economic development. Harvard University Press.
  • Singh, J., & Koshy, V. (2020). Technological innovations in the smartphone industry. Journal of Business Innovation, 6(3), 45-59.
  • Utz, S., & Belz, F. (2018). Market dynamics and the role of technological innovation in the smartphone industry. European Journal of Market Research, 56(2), 134-152.
  • Yoffie, D. B., & Kim, R. (2021). Apple’s Ecosystem Strategy: Reinforcing a Competitive Moat. Harvard Business Review.
  • Zhang, Y., & Li, X. (2019). Entry barriers and strategic positioning in high-tech industries. Strategic Management Journal, 40(4), 567-589.

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