The share price of Groupon,a daily-deal website,fell by 90 percent just a year after its successful initial public offering.The firm was not able to sustain its competitive advantage because of the emergence of other daily-deal sites that were able to better serve the needs of local markets and specific population groups.Which of the following is the most accurate inference from this example?
A) Groupon's competency was not hard to imitate.
B) Groupon's competency was built more on an intangible resource than on a tangible one.
C) Groupon operated in an industry where the barriers to entry were high.
D) Groupon invested in resources that were invaluable and common.

Question

Quizplus · Accepted Answer

As discussed in Strategy Highlight 4.1, to target and fine-tune its local deals, Groupon relies heavily on human labor to do the selling. Barriers to entry in this type of business are nonexistent because Groupon's competency is built more on a tangible resource (labor) than on an intangible one (proprietary technology). Given that Groupon's valuable and rare competency was not hard to imitate, hundreds of new ventures (so-called "Groupon clones") rushed in to take advantage of the opportunity.

The Share Price of Groupon,a Daily-Deal Website,fell by 90 Percent