Bubble-Up, Inc

question 77

Multiple Choice

Bubble-Up, Inc., is a small manufacturer of educational toys for children under age 10. It has co-existed with three other competitors in the educational toy industry for over 20 years, each of them maintaining a stable market share. There is a wide-spread rumor that Mega-Toy, Inc., the market leader in the broad children's toy market, has decided to target educational toys. Which one of these statements is most likely TRUE?

• A) The owners of Bubble-Up are unconcerned about Mega-Toy's entry to the market because of the resource dissimilarity between the firms.
• B) Bubble-Up's greater organizational slack will allow it to aggressively attack Mega-Toy.
• C) Bubble-Up's smaller size may make it more flexible in introducing innovations than Mega-Toy.
• D) Competitive rivalry will not increase for Bubble-Up because Mega-Toy is not dependent on the educational toy market.

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Definitions:

Protectionism

A call for tariffs and favorable treatments to protect domestic firms from foreign competition.

Foreign Competition

The presence of companies from different countries competing in a market, often emphasizing the global nature of business.

European Union

The European Union is a political and economic union of member states that are located primarily in Europe, aiming to promote peace, stability, and economic cooperation among its members.

Cross-border Trade

Involves the exchange of goods or services between entities in different countries, navigating various regulations and market conditions.