During market testing, Sensation Cosmetics (SC) realized that the cosmetics industry was dominated by multiple, well-established brands. These brands mostly sold their products in exclusive outlets and departmental stores. SC management realized that a new entrant would require a different business model to be successful. Thus, SC started selling its products through direct marketing. In this scenario, Sensation Cosmetics accomplished substitution primarily through
A) path dependence.
B) technology transfer.
C) knowledge diffusion.
D) strategic equivalence.

Question

Quizplus · Accepted Answer

In this scenario, Sensation Cosmetics accomplished substitution primarily through strategic equivalence. An avenue of imitation for a firm's valuable and rare resource is through substitution. This is often accomplished through strategic equivalence.

During Market Testing, Sensation Cosmetics (SC) Realized That the Cosmetics