CLA 2 – Comprehensive Learning Assessment 2

Industry & Company Report: Creating a Sustainable Competitive Moat

📘 Assignment Overview

If your business earns superior profits, competitors will attempt to enter the market and capture a share of that success. Sustainable profitability depends on a firm’s ability to create barriers to entry and defend its competitive position.

This CLA 2 focuses on the most damaging threat to long-term profitability: market entry by competitors.

Your task is to write a minimum 10-page APA 7 formatted paper that includes:

1. One Industry Report
2. One Company Report

Your objective is to recommend strategies to the CEO of a company on how to create a competitive moat and prevent new market entry.

You must incorporate and demonstrate understanding of:

1. CLO 2
2. CLO 5
3. CLO 8

🎯 Required Course Learning Outcomes

CLO 2

Analyze demand, supply, equilibrium prices, and price elasticities as quantitative tools to forecast changes in revenues.

CLO 5

Investigate the conditions under which a firm operates as:

1. Perfectly competitive
2. Monopolistically competitive
3. Monopoly

CLO 8

Evaluate and present the economic basis for:

1. Limit pricing
2. Conditions under which a firm can profit from such a strategy

📊 Industry Report Requirements

Select an industry of your choice and conduct a rigorous economic analysis incorporating:

1. Market Structure

1. Determine the concentration ratio of the industry
2. Identify whether the industry operates as:
3. Perfect competition
4. Monopolistic competition
5. Oligopoly
6. Monopoly
7. Explain how market structure affects entry

2. Nature of the Industry & Network Effects

1. Identify whether network effects exist
2. Explain how they influence competitive advantage

3. Production Structure

1. Initial capital requirements
2. Sunk costs
3. Economies of scale
4. Cost structures

4. Barriers to Entry

Analyze how entry can occur via:

1. New firms (e.g., Wendy’s entering fast food in the 1970s)
2. Global expansion (e.g., Toyota entering the U.S. auto market)
3. Product line expansion (e.g., Apple expanding into smartphones)

5. Technological Innovation & Future Outlook

1. Evaluate technological trends
2. Forecast industry prospects

🏢 Company Report Requirements

Assume you are managing a company within the selected industry. Prepare a strategic report recommending policies that ensure sustainable competitive advantage.

Your Company Report must address:

Sustainable Market Share

1. How it can be achieved and maintained

Branding & Consumer Loyalty

1. Reputation
2. Differentiation
3. Switching costs

Strategic Decision Making

Analyze managerial strategies including:

1. Vertical integration
2. Horizontal integration
3. Merger activity

Entry Deterrence Strategies

Evaluate:

1. Limit pricing
2. Predatory pricing
3. Raising rivals’ fixed or marginal costs

Explain the economic logic behind each and the conditions under which they are effective.

📚 Research & Formatting Requirements

1. Minimum 10 pages
2. APA 7 formatting
3. One Industry Report section
4. One Company Report section
5. Separate APA reference page
6. Use scholarly and peer-reviewed sources
7. Cite all sources properly

Recommended reference:

Guell, R. C. (2018). Issues in Economics Today (8th ed.). McGraw-Hill Education.

🧠 Analytical Expectations

Your paper should demonstrate:

1. Application of supply and demand theory
2. Price elasticity analysis
3. Revenue forecasting
4. Market structure evaluation
5. Strategic barrier-to-entry design
6. Integration of managerial economics theory

This is not a descriptive paper. It must be analytical and strategic.

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✔ Industry concentration ratio analysis

✔ Market structure evaluation

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✔ Limit pricing explanation

✔ APA 7 formatting

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