Which of the following represents a threat for ABC in the case?

• A. Government subsidies
• B. Oversupply of raw materials
• C. No competitors
• D. Competitors may copy or develop similar technology, reducing ABC's competitive advantage

Answer: (D)

In strategic analysis, a key external risk is competitors copying or developing similar technology. When rivals can imitate what makes ABC unique, ABC’s difference narrows or disappears, so customers may switch to cheaper or more similar offerings. That erodes ABC’s pricing power, market share, and returns on investment in R&D, weakening its sustainable competitive advantage.

Other options aren’t as threatening to that advantage. Government subsidies would be a supportive factor from outside the firm, not a threat. An oversupply of raw materials affects costs and operations but doesn’t directly attack ABC’s unique position. And having no competitors would actually be favorable, reducing competitive pressure rather than posing a threat.