Heeleo Inc. is a television manufacturer that has been in the market for several years. Most television companies are now manufacturing LED and smart televisions as they provide more utility and a better viewing experience when compared to direct view televisions. Heeleo, however, has been reluctant to adopt new strategies because it thinks that its direct view televisions were selling well when it first started and will continue to sell the same way even if new competitors and better products enter the market. Which of the following concepts is illustrated in this scenario?

Question

Quizplus · Accepted Answer

The scenario illustrates the concept of competitive inertia, which is the tendency of established companies to stick to their current strategies and products instead of adapting to changing market conditions and new technologies. Heeleo is reluctant to adopt new strategies and products despite the fact that LED and smart televisions provide more utility and a better viewing experience. This mentality can lead to a decline in competitiveness and market share as competitors introduce better products.