CFA Level I · CFA Level I Exam · Business Models
A long-established camera film manufacturer sees demand collapse as smartphones replace its products, and it has no digital offering. This situation is best described as a business model exposed to:
The firm is best described as exposed to technological disruption. Smartphones, a new technology, substitute for its core film product and erode demand, and the firm has no digital offering to adapt its value proposition, so its existing business model is undermined.
- ARegulatory arbitrage
- BTechnological disruptionCorrect
- CSupplier bargaining power
Explanation
A new technology substituting for the firm's core product undermines its value proposition, which is technological disruption. Nothing in the facts concerns regulation or suppliers.
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