Question

While most of Savvy Inc.'s competitors were moving toward developing and emerging markets, Savvy Inc. decided to keep its operations limited to its home country so that it could gain some advantage. A few years later, however, Savvy Inc. lost its footing in the home market due to a sharp fall in demand. It then decided to invest in large-scale operations in the same developing nations as its competitors, within a short period of six months. However, its costs kept increasing, so it could not compete against the already established brands. In this scenario, the failure of Savvy Inc. can be best attributed to

Answer 1

A) time compression diseconomies.

Step-by-step explanation:

Time compression diseconomies refers to the additional costs incurred by Savvy when it tried to enter new markets that were previously ignored by them.

If Savvy would have invested in expanding its operations earlier, by now it would already be an established competitor with normal operating costs and some amount of market share.

But since Savvy didn't invest before, it must try to do it on a hurry now and that results in higher costs and lower market share.

Answer 2

Answer: TIME COMPRESSION DISECONOMIES.

Explanation:Time compression diseconomies is a type of diseconomies that has to do with the time lost in taking or making Ng decisive or strategic steps in business.

Savvy Inc, failed to take the timely steps or action required at the right time to divest into new markets,this grossly affected its business because it entered at a later period,so it is not easy for it to gain a good competitive advantage over already existing brands or businesses.