Question

Gini's LLC, a footwear store, has the following characteristics. Which of the following characteristics of Gini's is most likely to be its least sustainable competitive advantage?
a. shared systems with vendors
b. convenient store location
c. knowledgeable employee force
d. helpful sales force
e. lower prices

Answer 1

Answer:

shared system with vendors

Explanation:

For Gini's LLC footwear store, having a shared system with vendors give ease of doing transactionsbut does not offer a sustainable competitive advantage.

However convinient store location gives a competitive advantage of place as customers can easily come and make purchases.

Knowledgeable employee force will give excellent customer service.

Helpful sales force will aid in customer retention.

And lower prices is a competitive advantage where other players in the market cannot sell profitably at the low price.

Answer 2

Answer:

E) lower prices

Explanation:

Gini's is a retailer and it is able to sell its products at a low price because it is able to maintain low costs. But keeping your costs down is something very difficult to do and specially if you are a retailer because you do not control production costs, you are part of a distribution channel. Even if Gini's is able to keep its own costs very low, e.g. low labor costs, low utilities, low rent, etc., if its vendors decide to increase merchandise costs, there is very little that can be done. They might search for new vendors, but that takes time and costs money.

Also, if they decide to keep their costs down, they might have to move to a less convenient location since good locations are expensive. If they decide to try to keep their labor costs down, good employees will eventually leave.

Cost leadership strategies (offering the lowest possible cost) are very hard to maintain during long periods of time, and it usually takes economies of scale to sustain them.