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Markets and Competitive Advantage

Drill 2 ·

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About This Drill

Markets and Competitive Advantage is a practice drill. It contains 5 original questions created by Brian Stewart, a Barron's test prep author with over 20 years of tutoring experience.

A meal-subscription business reads a local competitor-comparison table to identify its competitive advantage and the factors that affect it; uses an invented company and original figures.

Passage

Marrowfield Kitchen sells fresh, heat-at-home dinners through a weekly subscription in one metro area. Its operations manager pulls together a snapshot comparing Marrowfield with the three other meal services that compete for the same local customers.

Local meal-service comparison, this quarter

ServicePrice per mealLocal subscribersMain selling point
Marrowfield Kitchen$113,000Locally sourced ingredients
QuickPlate$74,500Lowest price in market
Harvest Box$121,500Organic certification
CityFork$103,000Widest menu variety

Questions in This Drill

  1. Which competitor has the largest number of local subscribers?
  2. Marrowfield charges $11 per meal, above QuickPlate and CityFork, yet keeps 3,000 subscribers by promoting its locally sourced ingredients. Which type of competitive advantage is Marrowfield pursuing?
  3. Treating the four services as the whole local market, what is Marrowfield Kitchen's share of local subscribers, to the nearest whole percent?
  4. Why can Marrowfield charge more than QuickPlate while still retaining 3,000 subscribers?
  5. Marrowfield's owner is listing factors that could affect the business. Which of the following is an EXTERNAL factor (one arising outside the firm) rather than an internal one?