Leading guitar string producer Wound Up Inc. has enjoyed a competitive advantage based on its proprietary coating that gives its strings a clearer sound and longer lifespan than uncoated strings. One of Wound Up's competitors, however, has recently developed a similar coating using less expensive ingredients, which allows it to charge a lower price than Wound Up for similar-quality strings. Wound Up's competitive advantage is in danger due to
A) a lack of perceived value.
B) a lack of organization.
C) direct imitation and substitution.
D) resource immobility.

Question

Quizplus · Accepted Answer

Wound Up's competitor has found a way to directly imitate the benefits of the string coating while substituting cheaper ingredients. This combination of direct imitation and substitution undercuts Wound Up's competitive advantage and threatens to reduce its market share.

Leading Guitar String Producer Wound Up Inc