Bonne Chance Cosmetics manufactures and sells a skincare line. It does not currently make or sell lipstick, but it could do so in future. A cosmetics company that makes and sells lipstick could view Bonne Chance as a potential
A supplier.
B competitor.
C distributor.
D consumer.
The correct answer and explanation is:
The correct answer is B competitor.
Bonne Chance Cosmetics is not currently making or selling lipstick, but it has the potential to do so in the future. If another cosmetics company already manufactures and sells lipstick, they would view Bonne Chance as a competitor because they could be entering the same market and targeting the same customer base for the product category (lipstick).
In the context of business competition, companies often see potential competitors as threats to their market share, especially when a company like Bonne Chance expands into new product lines that could draw away customers or divert attention from their own product offerings. For example, if Bonne Chance starts producing high-quality lipstick, it could attract consumers who currently purchase lipstick from other brands. These competing companies will have to adjust their strategies, which could involve enhancing their product offerings, improving marketing, or lowering prices.
Even though Bonne Chance doesn’t yet make lipstick, the mere possibility that it might start producing it makes it a potential competitor to the company that already sells it. Competition in business is not just about current products but also about the future ability of a company to expand and meet consumer demands in various segments.
Other options like supplier, distributor, and consumer do not fit because Bonne Chance is not yet a supplier or distributor of lipstick, and it would not be a consumer of its own product. Therefore, the most accurate term for Bonne Chance’s relationship with a lipstick-selling cosmetics company is “competitor,” based on the potential future competition in the lipstick market.