Toy sales have declined by 10 percent each year, forcing many retailers to exit the industry. To eliminate its remaining competition, Bleaker Toys sells all of its product at a loss and relies on its significant cash holdings to cover costs until its competition is forced to exit the industry. Is this an example of a successful strategy? Why or why not?
A) Yes. Any strategy that forces competition from the market is by definition successful.
B) Yes. Bleaker has achieved a sustainable competitive advantage by selling its toys at a lower price than competitors.
C) No. Bleaker has failed to create value for its customers.
D) No. Bleaker's strategy and competitive advantage are unsustainable.

Question

Quizplus · Accepted Answer

Strategy is not a zero-sum game. Competition focuses on creating value for customers rather than destroying rivals. Although Bleaker Toys has created temporary value for its customers by offering its goods below cost, the advantage it achieved is unsustainable. When Bleaker runs out of cash to cover its operating expenses, it will no longer be able to offer its toys at such a low cost and will either be forced to raise prices or exit the industry.

Toy Sales Have Declined by 10 Percent Each Year, Forcing