Question

Brown Foods Inc., a leading chocolate producer, anticipated that the prices of cocoa beans would double in less than three years. This would disrupt the availability of cocoa in the industry. Thus, Brown Foods Inc. decided to purchase cocoa plantations in Ghana. As predicted, the prices of cocoa increased twofold. Because of the company-owned cocoa plantations, Brown Foods Inc. was able to sustain its competitive advantage in turbulent times. Which of the following isolating mechanisms does this scenario best illustrate?a) Social complexityb) Causal ambiguityc) Time compression diseconomiesd) Better expectations of future resource value

Answer 1

d) Better expectations of future resource value.

Step-by-step explanation:

Better expectations of future resource value involves competitive advantage that is attributed to intangible resource and future planning. It is a future expectation a business has about market dynamics that will bring future profits.

Brown Foods Inc anticipated that the prices of cocoa beans would double in less than three years, and they planned towards that expectation by buying cocoa plantations in Ghana. This eventually paid off and enabled the company survive in turbulent times.