Ambrosia Inc.,a leading chocolate producer,anticipated that the prices of cocoa beans would double in less than three years.This would disrupt the availability of cocoa in the industry.Thus,Ambrosia Inc.decided to purchase cocoa plantations in Ghana.As predicted,the prices of cocoa increased twofold.Because of the company-owned cocoa plantations,Ambrosia Inc.was able to sustain its competitive advantage in turbulent times.Which of the following isolating mechanisms does this scenario best illustrate?
A) social complexity
B) causal ambiguity
C) time compression diseconomies
D) better expectations of future resource value

Question

Quizplus · Accepted Answer

The scenario illustrates better expectations of future resource value. Sometimes firms can acquire resources at a low cost, which lays the foundation for a competitive advantage later when expectations about the future of the resource turn out to be more accurate.