Question

Altair Inc., the largest firm in the electronics market, is facing stiff competition from a relatively smaller firm, the Cygnus Group. Which of the following is an advantage that Cygnus has over Altair due its size? Large fixed-asset bases

Multiple layers of administration

Flexibility and an entrepreneurial culture

Greater bureaucratic inertia due to well-developed policies and procedures

Answer 1

Flexibility and an entrepreneurial culture

Step-by-step explanation:

One of the major advantages a smaller size company has over its larger competitors is the flexibility it has. It can quickly respond to market changes due to a relatively less commitment to high costs larger fixed assets and thus this flexibility is its competitive advantage. Supported by its entrepreneurial culture that are able to vary decisions quickly.

Large fixed assets is not an advantage for Cygnus as they are relatively small. Multiple layers of administration also make flexibility less powerful as it takes time for decisions to trickle down from all the levels of management in wake of dynamic markets.

Furthermore Cygnus is unlikely to have bureaucratic inertia as they are smaller, this is likely a disadvantage for Altair.

Hope that helps.