Question

Which of the following statements about a business pipeline is true

A. It is likely to outperform even the most successful platform business.
B. It creates value by matching external producers and consumers in a way that creates value for all participants.
C. It is the traditional system of horizontal business organization.
D. It relies heavily on innovation and community feedback and involvement.

Answer 1

The correct answer is that a business pipeline creates value by matching external producers and consumers which facilitates transactions between them. This approach is different from platform businesses and is in line with focusing on a core competency, as discussed in the theory of the firm.

Step-by-step explanation:

The student has inquired about the characteristics of a business pipeline. Among the options provided, the correct statement about a business pipeline is: It creates value by matching external producers and consumers in a way that creates value for all participants.

This approach is commonly contrasted with platform businesses, which rely on external networks and ecosystems to generate value. The reference to the theory of the firm provides context to the discussion, emphasizing that while competition can lead to lower prices and innovative products, and large-scale production may reduce average costs, the market dynamics tend to be more complex. The insights gleaned from this theory inform policymakers on how much to intervene to prevent loss of competition due to growth and mergers of businesses. Additionally, businesses tend to be more successful when they focus on a core competency rather than trying to offer a wide range of products.