Question

Wanda has been operating a fertilizer business for the last 20 years that has been steadily profitable. One year, a new fertilizer company came into the area offering free delivery of fertilizer and mulch to people’s homes. Wanda was dismissive, as she believed that her customers—who she required to pick up their own mulch—would remain loyal to her product. However, by the following year she was forced to go out of business. What type of business risk did Wanda fail to assess appropriately?

(1 point)
Responses

people

people

competitive

competitive

cultural

cultural

economic

Answer 1

Wanda failed to appropriately assess **competitive** risk. She underestimated the impact that the new competitor, with its free delivery service, would have on her customer base and was overly confident in her customers' loyalty despite the competitive advantage offered by the new company.