- 1 Marks
BMIS – L1 – SA – Q7.4 – Competitive advantage
Question
In which one of the following industries might a lock-in strategy be most appropriate?
A Subscription television service
B Aircraft manufacture
C Wheat production
D Wine making
Answer
B
Explanation:
A lock-in strategy is most appropriate in industries where customers face high switching costs, making it difficult to change suppliers. In aircraft manufacturing, if an airline purchases aircraft from a manufacturer, it is locked into future purchases of spare parts and pilot training specific to those aircraft, creating high switching costs. Option A is less appropriate because subscription television services, while having some lock-in through contracts, allow easier switching between providers. Option C is incorrect as wheat production involves commodity products with low switching costs between suppliers. Option D is incorrect because wine making allows customers to switch brands easily without significant cost or commitment.
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