When the laptop market overtook the desktop market, Blue Tech Inc., a leader in desktop technology, was left at a competitive disadvantage. Later, Blue Tech Inc.'s management channeled all of the company's efforts and revenue to develop an efficient laptop from scratch in less than a year. However, the company failed because Blue Tech Inc.'s models were inferior to the third- and fourth-generation models its competitors were selling. In this scenario, Blue Tech Inc.'s failure can be best attributed to
A) causal ambiguity.
B) diseconomies of scope and scale.
C) time compression diseconomies.
D) social complexity.

Question

Quizplus · Accepted Answer

In this scenario, Blue Tech Inc.'s failure can be attributed to time compression diseconomies. When attempting to compress lots of effort and resources such as R&D into a short time period, it will not be as effective as when a firm spreads out its effort and investments over a longer period. Trying to achieve the same outcome in a short time period, even with higher investments, tends to lead to inferior results.

When the Laptop Market Overtook the Desktop Market, Blue Tech