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 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.

Question

Quizplus · Accepted Answer

Bubble-Up's smaller size may make it more flexible in introducing innovations than Mega-Toy. This statement is likely to be true because smaller companies have less bureaucracy and are usually more agile in introducing new products to the market. It is a common advantage of small companies in the industry, especially when facing larger competitors. Although it is uncertain how Bubble-Up will react to Mega-Toy's entry to the market, being small may give them an edge in terms of introducing new products quickly. Options A, B, and D are not likely to be true because there is not enough information to support them.