Alligator Enterprises has earned above-average returns since its founding five years ago. No other firm has challenged Alligator in its particular market niche; therefore, the firm's owners can feel secure that Alligator has established a competitive advantage. T/F

Question

Business

Anabelle

23 March, 20:28

Alligator Enterprises has earned above-average returns since its founding five years ago. No other firm has challenged Alligator in its particular market niche; therefore, the firm's owners can feel secure that Alligator has established a competitive advantage. T/F

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Answers (1)

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Bridget Trevino · Answer 1

The correct answer is False.

Explanation:

A company has a competitive advantage when it has a unique and sustainable advantage over its competitors, and this advantage allows it to obtain better results and, therefore, to have a superior competitive position in the market.

In this case, it cannot be said that Alligator has a real competitive advantage, because at any time some other company can also get involved in its main niche, which would affect its performance exponentially.