Capsim

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Discuss the current situation and the recent changes to the industry or competitive environment.

The sensor industry presents a large number of business opportunities and also great challenges to the identical competitors created by the government splitting a monopoly. Customers buying criteria had no effect on the pricing, performance, size or any other product attribute under the monopoly and customers were also forced to pay higher prices since there was no other options for sensors available. This situation will now change under the current market conditions because the customer now has buying power over the product offerings and product attributes that they seek to meet their needs. All identical competitors created as a result of the government split will now have to conduct research and develop products that will meet consumer demand in each market segment including low end and/or high end market, performance, traditional and size markets. Some other challenges to be faced and need to be addressed are: the age of products, company’s marketing efforts, production lines needing revamping and financial management as we strive to lead the company into operational success.

Identify the competition, and clearly explain the goals and objectives of each company.

The goal and objective of all companies now competing in the sensor market is similar if not identical due to all companies having a product offering for all market segments and that is to identify opportunities to reduce operating costs to increase margins and revise current product line with stronger product offerings that fall within the requirements of each market segment. There are 4 main departments that will carry the responsibility of meeting consumer’s changing demands and these departments are: Research and Development (R&D), responsible for inventing and revising products that appeal to customers in each market; Marketing, responsible for pricing and promoting the company’s products; Production, responsible for making buy and sell decisions on product lines and determining the total number of units that can be produced each year under its current capacity; lastly the Finance department, shares the responsibility of determining if company has the funds to finance the business critical activities within our operation and for seeking funds through bonds, bank notes and/or issuing new stock. All 4 departments must integrate their activities to ensure of the company’s success through strategic analysis and activity planning. Analyzing the market and product offerings by direct competitors, creating and executing a competitive strategy, and coordinating the activities of all departments involved will be the main responsibility of managers who are looking to succeed. For publicly traded companies, success is measured by the rate of return received by shareholders and investors in addition to making the company a market leader.

Describe a recent example of a monopoly industry that was dissolved. Explain your understanding of the reason why a monopoly industry would be dissolved.

A recent example of a monopoly industry that was dissolved was the AT&T case. In 1984, a court ordered that AT&T sell its regional companies over the US. Based on my understanding, the reasons why monopolies would be dissolve include the need for innovation and development of new technologies that could promote the economy, greater price controlled by consumer demand minimizing price fixing and demand inelasticity, creating high performance products among other reasons. Monopolies tend to be detrimental for economies because the consistently increasing prices on products in a monopoly could actually force consumer to demand less of other products.