CFA Level I · CFA Level I Exam · Business Models
A long-established film-processing company sees demand collapse as customers move to digital photography, and its management continues to invest in existing plants. This situation is best described as a business model risk arising from:
This is best described as technological disruption. Digital photography replaced the value proposition of film processing, so demand fell structurally. The stem mentions no supply interruption or new regulation, and continued investment in legacy plants shows management failing to adapt the business model.
- Asupply chain disruption
- Btechnological disruptionCorrect
- Cregulatory change
Explanation
A new technology (digital imaging) replaces the product's value proposition, which is technological disruption. Nothing in the stem suggests input supply problems or new rules. Continued investment in obsolete plants compounds the risk.
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