Your task is to prepare a report that would help a company make a decision about expanding into a certain industry. The company that commissioned the report would like to be informed both about the details of the target industry and a recommended entry strategy.
Your report will have two main parts. First, carry out a detailed economic analysis of the Chinese electric vehicle or new energy vehicle (NEV) Second, develop a set of recommendations regarding an entry strategy for a specific firm to move into this industry. The firm can either be an existing firm not currently competing in that industry, or a new venture developed specifically to enter the industry.
With only 2,500 words, it is not necessary to restate or summarize theframeworks,
Below, you will find six main sets of issues/questions that you need to address in your report. Although there may not be an equal amount of material/information available for each, all are
necessary for your report and so you should ensure that you address each one explicitly. You may want to consider organizing your report according to these points.
1. Defining the market and the characteristics of demand and costs. How did you decide where to draw the market boundaries, both geographically and in terms of the characteristics of the product/service? What are the closest substitutes? Carry out a qualitative or quantitative analysis of the price-elasticity of demand for the market. What does the cost structure look like for a typical firm in the market? Are there any scale effects? Describe.
2. Market competition. How concentrated is the market? Would you characterize the market as a monopoly, oligopoly or highly competitive? Are there any barriers to entry which protect industry profit levels? For an oligopoly: how do firms compete, e.g. on price (Bertrand), on output (Cournot) or on some other product characteristic? Is price discrimination widely used? Describe.
3. Market failures. Are there any examples of market failures? What is the nature of these market failures and the negative consequences stemming from them? Are there remedies in place to address them? Describe.
4. Entry Strategy: What would be a good possible strategy for an entrant (even if you think entry is not actually attractive)?Describe.
5. Key Resources and Capabilities: What resources and capabilities would be key for the firm to succeed in entering the industry based on the strategy you have described above? Don’t just list a whole bunch of resources and capabilities. Be specific and argue for their significance.
6. Non-market issues: What attributes of the non-market environment represent the largest challenges to the firm? Why? Be sure to touch upon key elements of the non-market environment.
You are free to make use of material from other courses BUT you will be judged primarily on your ability to use the material from your Firms and Markets and Strategy courses, and especially your integration of the material from these two courses to draw useful, interesting and clearly argued conclusions. You should include descriptions of the economic and strategic models and frameworks you employ, and reference appropriate academic literature and industry sources. While your answers should be based on actual data as far as possible, you will also get credit for qualitative judgements, and for indicating how you would improve your analysis if more information were available
Relevant sources:
https://www.energydigital.com/
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