Launch Cars, a car manufacturing company, has patented its breakthrough technology that reduces pollutant emissions by half. The company is now an active supporter of anti-pollution laws that are likely to diminish the profitability of many other auto makers. Launch Cars is attempting to ________.

Question

BlackTom AI · Accepted Answer

In this scenario, Launch Cars has patented a breakthrough technology that halves pollutant emissions and is actively supporting anti-pollution laws that may reduce profitability for many other auto makers. Analyzing the options in light of competitive strategy concepts:

Option 1: reduce costs. While the patent and support for stricter laws could indirectly affect costs in the industry, the primary described action is about shaping the market environment through regulation and barriers, not directly about reducing Launch Cars' own production or operating costs. Therefore, this choice does not best capture the strategic move implied by the scenario.

Option 2: raise barriers to market entry. By patenting a breakthrough technology and backing anti-pollution legislation that makes it harder or less profitable for other firms to compete, Launch Cars is creating conditions that deter new entrants and raise the difficulty for existing competitors to expand. Patents are classic barriers to entry, and favorable regulatory actions can heighten incumbency advantages, making it harder for rivals to enter or scale. This aligns with strategic behavior aimed at protecting a novel technology and constraining competition in the marketplace.

Option 3: establish alliances. The description emphasizes patenting and supporting regulation, not forming partnerships or coalitions with other firms. While alliances can be used to influence standards or markets, nothing in the scenario indicates a cooperative agreement or joint venture. Thus, this option does not fit the primary actions described.

Option 4: lock in customers. The information does not detail loyalty programs, exclusive contracts, or other mechanisms intended to secure customers. Though anti-pollution advocacy could influence consumer preferences, the explicit mechanism described—patent protection and regulatory backing—points more toward erecting entry barriers than directly locking in buyers.

Option 5: lock in suppliers. Similarly, there is no mention of exclusive sourcing, supplier agreements, or vertical integration aimed at locking in suppliers. The strategic emphasis is on technology protection and regulatory influence, not supplier relationships.

In summary, the scenario portrays actions that are best understood as creating higher barriers to competition—via intellectual property protection and favorable regulation—rather than primarily pursuing cost reductions, alliances, or customer/supplier locking mechanisms.

Launch Cars, a car manufacturing company, has patented its breakthrough technology that reduces pollutant emissions by half. The company is now an active supporter of anti-pollution laws that are likely to diminish the profitability of many other auto makers. Launch Cars is attempting to ________.

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Question at position 21 Licensing costs and legal requirements are a barrier to entry for Netflix in global markets.TrueFalse

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