Question

Clean Rinse Shampoo has been the leader of hair-cleaning products for about 40 years. However, this company relied too long on its competency without refining or upgrading its product. As a result, other shampoo companies that began to offer organic shampoo gained a competitive advantage over Clean Rinse.

This case is an example of:

A. resource flow.
B. dynamic capabilities.
C. core rigidity.
D. value chain.

Answer 1

Answer: Core rigidity

Step-by-step explanation:

Core rigidity is the opposite side of a firm's core competencies and it is caused by a firm's prolonged overdependence on the advantages it possesses, such that it does not realize the need to change and also prepare for the future. It is when a company overrelies on any advantage it has for too long.

When this happens, the competitors of the firm with core rigidity continues to improve and hence have competitive advantage over the firm in the long run. This can be seen in the example of Clean Rinse Shampoo discussed on the question.