Question 4

The contender strategy is appropriate when there is high industry pressure to globalize and competitive assets are transferable abroad.

The contender strategy is best utilized in situations where firms face significant industry pressure to expand globally and possess competitive assets that can be effectively transferred to international markets.

A) There is low industry pressure to globalize and competitive assets are customized to home markets

This option is incorrect because a low industry pressure to globalize indicates that firms do not need to pursue international expansion. Additionally, having competitive assets that are customized to home markets does not align with the need for a contender strategy, which relies on the ability to leverage transferable assets in a global context.

B) There is high industry pressure to globalize and competitive assets are customized to home markets

While this option recognizes high industry pressure to globalize, it fails because competitive assets that are customized to home markets cannot be effectively utilized in international markets. The essence of the contender strategy is to leverage transferable competitive assets, making this option unsuitable.

C) There is high industry pressure to globalize and competitive assets are transferable abroad

This option correctly identifies the conditions under which the contender strategy is most effective. High industry pressure necessitates a proactive approach to international expansion, and having competitive assets that are transferable abroad enables firms to compete successfully in global markets.

D) There is low industry pressure to globalize and competitive assets are transferable abroad

This option is incorrect as low industry pressure suggests that there is no urgent need for companies to expand internationally. Although having transferable competitive assets is beneficial, without the impetus of high industry pressure, the contender strategy would not be appropriate.

Conclusion

The correct answer, C, emphasizes the need for both high industry pressure to globalize and the presence of transferable competitive assets, which are critical for the effective implementation of the contender strategy. Options A, B, and D fail to meet these criteria, highlighting why they are not suitable in this context.