Question

Capricorn Creative Inc., a U.S. based advertising firm, was the first in the advertising industry to identify the growth potential of Brazil and to make huge investments in it's economy. As a result, the firm was able to build brand loyalty and gain experience in that country's business practices. In the language of business strategy, Capricorn Creative has typically benefited from:
A.
a first-mover advantage.

B.
forward integration.

C.
unrelated differentiation.

D.
lateral diversification.

E.
technology transfer.

Answer 1

Answer:

Option A-First mover advantage

Explanation:

The first mover advantage is the advantage to the firm who first steps in to take the risks to ensure future benefits in the long term perspective. The particular example includes of TaTa company in India which has more than 90% of the market and was the first company in India that tried to meet requirements of every class of person, small and medium organization to large corporations. This increased production helped the company to gain economies of scale and the country import policies also though do helped the company.

Furthermore, here the advertising firm is not investing but is a means of investment for many investors which means it has no investment in the country and hence there are no forward integration and lateral diversification.

It can also be noted that the company was not transferring its technology in the state option E is also incorrect.

The unrelated differentiation comes when the firm offer its customers a uniqueness of product services which in this case can not be seen prominent. The company advertises similar to other advertises like the other firms and is not pursuing unrelated differentiation so the option C is also incorrect.