Annabey Inc., a small candy manufacturing company established in 1937, now has several large units that sell unique flavors of candies and assorted chocolates. When the company started out in 1937, it initially experienced slow growth as it was selling brand new products in the market. Later on, their sales picked up at a drastic speed when customers decided to try their products. The CEO of Annabey credits its growth to all the customers who love their candies and chocolates. Which of the following factors of inimitability is best reflected in this scenario?

Question

Quizplus · Accepted Answer

The scenario reflects positive network externality as the growth of Annabey was mainly driven by customers trying and liking their products, leading to positive word-of-mouth and increasing demand for their candies and chocolates. This creates a network effect where the more people use or buy their products, the more valuable the products become to others.