A Company That Is at a Disadvantage in the Marketplace

question 87

Multiple Choice

A company that is at a disadvantage in the marketplace because it lacks competitively valuable resources possessed by rivals

• A)should consider divesting assets and making future investments in promising new industries.
• B)may be able to develop substitute resources that accomplish the same objective as the competitively valuable resource possessed by rivals.
• C)can still marshal competitive power in the marketplace by incorporating product or service features desired by niche buyers.
• D)is virtually blockaded from using offensive strategies and must rely on defensive strategies.
• E)should abandon strategy elements that have caused its weakness in the marketplace.

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Definitions:

Increasing-Cost Industry

An industry in which production costs increase as the industry's output expands.

Constant-Cost Industry

An industry where the cost of production does not change as the industry's output changes.

Increasing-Cost Industry

An industry in which costs per unit of output increase as the scale of output is increased due to factors such as shortages of resources or higher input costs.

Long-Run Equilibrium

A state in economics where all factors of production and outputs are variable, allowing for the adjustment to changes in demand, supply, and prices, resulting in a situation where firms earn normal profit.