Question

The owner of a store that sells fine-quality fabrics for home seamstresses bemoans the fact that few young women know how to do fine tailoring, much less simple dressmaking. Many potential customers are unable to appreciate the premium quality of the fabrics and are deterred by the high prices, as well as the complexity of fine sewing. In the past, the store had a strong demand for fabrics, large classes for women learning the fine points of sewing, and a reputation for excellent service and technical advice. Now the store is earning lower-than-average returns. This case is an example of:

a. the need for firms to stick to their core competencies through temporary downturns in market demand.
b. the lack of intangible resources undermining the core competencies of the firm.
c. core competencies that have become core rigidities.

Answer 1

The answer is: C) core competencies that have become core rigidities.

Step-by-step explanation:

Core competencies over time become core rigidities, sometimes due to new technologies and other times due to changing consumer habits or preferences. This case would be a change in consumer habits, most women no longer know how to make a dress. Most of the times core rigidities occur due to technological changes, for example Kodak's photographic paper gave them a competitive advantage until digital cameras became popular and Kodak went bankrupt. Technology has changed so rapidly that even digital cameras are no longer common, people use their smartphones now.