Managerial Economics 2nd Edition by William Boyes

Exercise 4

In 1994, the $3.5 billion Avery Dennison Corporation developed a new film for use in product labeling. The film unit won a contract to provide the labels for Procter Gamble shampoo bottles and appeared to have huge growth potential. But an analysis of patent activity indicated that Dow Chemical was beginning to move into this business. Should Avery commit the huge resources needed to exploit the market opportunity for the film unit?