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An example of a potential weakness or competitive deficiency is:

a) A rival developing unique resources and capabilities that require a high level of capital investment.

b) The growing bargaining power of customers or suppliers.

c) The lack of attention to customer needs.

d) Restrictive foreign trade policies or tight credit conditions.

1 Answer

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Final answer:

A potential weakness or competitive deficiency is the lack of attention to customer needs, which is critical in monopolistic competition. Restrictive foreign trade policies also affect competitive positions by limiting global market participation. Externalities and resource adaptability are additional factors that can undermine a firm's competitiveness.

Step-by-step explanation:

An example of a potential weakness or competitive deficiency is c) The lack of attention to customer needs. This can be detrimental to business performance because consumer preferences drive demand, and neglecting them can result in the loss of market share to competitors who are more attentive. This is particularly crucial in a monopolistic competitive market, where consumers have a variety of similar options; the failure to satisfy customer wants can easily lead to a shift in their loyalty.

Another aspect affecting competitive positions, which is mentioned in the provided scenarios, relates to restrictive foreign trade policies intended to safeguard national industries. Such policies can impact businesses by limiting their ability to compete globally or procure cost-effective inputs.

Externalities and the inability of resources to adapt also represent factors that could undermine a firm's competitive edge as they create additional costs or prevent a firm from effectively responding to market changes.