📚 Learning Guide
Business Strategy
medium

A company has recently gained a competitive advantage in its market. Which underlying cause is most likely responsible for this change?

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Learning Path
Learning Path

Question & Answer
1
Understand Question
2
Review Options
3
Learn Explanation
4
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Choose the Best Answer

A

The company invested heavily in marketing without analyzing its market position

B

The company effectively utilized its existing resources and competencies to innovate

C

The company reduced its workforce to cut costs

D

The company followed its competitors' strategies blindly

Understanding the Answer

Let's break down why this is correct

Answer

A company’s sudden competitive edge usually comes from a strategic change that improves its value proposition, such as launching a new product that meets a unique customer need or cutting costs so it can price lower while keeping quality. This shift shows that the firm has identified a gap in the market and acted on it, either by innovating or by streamlining operations. For instance, a smartphone maker that introduces a battery‑lasting feature that competitors lack can instantly attract more buyers. In short, the underlying cause is a deliberate, well‑executed strategy that delivers something customers value more than rivals do.

Detailed Explanation

Using the company’s own strengths and skills, it created something new that customers liked. Other options are incorrect because People often think more money spent on ads automatically wins customers, but ads only raise awareness; Cutting jobs can save money, but it usually hurts teamwork and ideas.

Key Concepts

Competitive Advantage
Resource Utilization
Market Dynamics
Topic

Business Strategy

Difficulty

medium level question

Cognitive Level

understand

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