Question

Lobelia's Nursery and Garden Resource Center has long provided high quality, typical types of seasonal bedding plants to customers in the Mobile, Alabama, metropolitan area. It has traditionally competed with the other plant nurseries within a 50-mile radius of Mobile. Recently, Lobelia has opened a branch in Fairfax, Virginia. Lobelia's research shows that most Fairfax nurseries have only one location. Lobelia can expect the local Fairfax nurseries to

a. be unmotivated to respond because their market position is not threatened by a new competitor from out-of-town.
b. respond with fierce attacks because of resource dissimilarity.
c. respond aggressively because of high market dependence.
d. take no competitive response because of the lack of mutual interdependence among the nurseries.

Answer 1

Lobelia's entrance into the Fairfax market is likely to prompt an aggressive response from local nurseries due to their high market dependence. The local nurseries will view Lobelia as a significant competitor and may take competitive actions to defend their market share.

Step-by-step explanation:

Lobelia's Nursery and Garden Resource Center's expansion into Fairfax, Virginia, introduces new dynamics into the local competitive landscape. Considering the research indicating that most Fairfax nurseries only operate one location, it is likely that these nurseries have a high market dependence on their current customers. Market dependence refers to the extent to which a business relies on a particular market or customer base for its sales. When a new competitor enters the market, local businesses who are highly dependent on the market may respond aggressively to protect their market share and customer base. Therefore, Lobelia can expect the local nurseries in Fairfax to perceive Lobelia's new branch as a significant threat and likely to take competitive actions to defend against the potential loss of market presence.