The tendency of existing firms to be slow to respond to changes in the industry environment due to their large size,established routines,or prior strategic commitments to existing suppliers and customers is known as:
A) monopoly costs.
B) path dependency.
C) incumbent inertia.
D) technology trajectory.

Question

Quizplus · Accepted Answer

Incumbent inertia refers to the resistance to change that existing firms experience due to their existing size, routines, and supplier and customer commitments. This resistance makes it difficult for firms to adapt to changes in the industry environment, including new technologies, and can lead to their eventual downfall.

The Tendency of Existing Firms to Be Slow to Respond