Question

DigiGames Inc. established itself as the foremost producer of computer games. However, as the market for these games moved from laptop computers to cell phones based on cloud applications, DigiGames failed to adapt its games enough to this new environment. As a result, the firm soon lost its competitive advantage. Which of the following best describes this scenario?

1) Market saturation
2) Technological obsolescence
3) Strategic misalignment
4) Financial mismanagement

Answer 1

The correct descriptor for DigiGames Inc.'s failure to adapt to market changes is technological obsolescence, where the company's products became outdated due to new consumer preferences for mobile and cloud-based gaming.

Step-by-step explanation:

In the scenario described, DigiGames Inc. failed to adapt its product offerings to the shift in the market from laptop computers to cell phones based on cloud applications, resulting in the loss of their competitive advantage. The situation that best describes this scenario is technological obsolescence. This occurs when a company's products or processes become outdated due to new technologies emerging and changing consumer preferences, which in this case is the transition to mobile and cloud-based gaming environments. DigiGames faced a critical need for innovation and adaptation in the face of changing market dynamics and technology but failed to align its strategy with these industry shifts.