Respond to the post below by explaining why you agree or disagree. Then, share an example from your professional experience to support your assertions. Back up your response with sources. 

 

 

Strategy to create a firm into monopoly requires sustainability of competitive advantages, which may not be the case in every instance. As stated by Barney and Mackey (2018), the change in "consumer tastes, technology, or many other factors can turn what was a source of a sustained competitive advantage into a source of zero economic profits, or even economic losses." The firm attempting to maintain monopoly status and economic profit must continue to determine the "many other" factors and apply strategic management from perhaps another theory that will sustain its competitive advantage. According to Ormanidhi and Stringa, Porter's model ensures that "if firms pursue any of his three recommended generic competitive strategies they will be able to outperform competitors who do not pursue such strategies." (2008). Those strategies include "cost leadership" or "differentiation" (2008).

 

For instance, in the healthcare area, there are multiple firms that provide the same services; however, one specific firm, Kaiser Permanente, has shown attributes of monopoly with its vision to provide every medical service within it. These services include general care like adult medicine, pediatrics, and women's health. It further offers specialty services of every possible disease process, whether it is acute or chronic. Moreover, it provides services for labs and pharmacy. One may refer to it as a "one-stop shop" of the medicine world. It also has its own insurance coverage to ensure that consumers are bonded in a contract with this firm to maintain a fixed economic profit. Kaiser Permanente has used the differentiation strategy to provide medical services in a unique way by setting up a pyramid of all medical services. There are other emerging medical firms such as: Dignity Health and Sutter that provider similar acute care services. However, these medical firms do not have the attribute to provide all medical services.  

 

What would be the best strategy to maintain Monopoly status for a firm, "cost leadership" or "differentiation"? If differentiation strategy entails a unique material or service for consumer, why would the firm prioritize cost? What strategy can medical firms like Dignity Health and Sutter utilize to achieve the status of Kaiser Permanente? Is monopoly equivalent to economic profit?

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Response to the Post The Elusive Monopoly and Maintaining Competitive Advantage I agree that sustainability of competitive advantages is crucial for a firm aspiring to maintain a monopoly but I would ... View the full answer