Question

1. Bourbon is having a moment in the United States. Marker’s Mark, one of the premier bourbon brands is earning large profits as a result. Marker’s Mark has the trademark protection so that no one can copy its name. It also enjoys a long, and well-deserved reputation for delivering top shelf bourbon. TFU and explain: Because Marker’s Mark has a strong brand, a valuable reputation, and a long history of producing bourbon, it will be able to keep potential entrants at bay and earn long run excess returns. (8)

Answer 1

Since bourbons have competitive advantage and first mover advantages it keeps entry barriers high as innovation and capital expenditure to large extent is difficult for new players.

Also woth trademark its difficult to emulate giving monopolistic prices and higher profits and thus makes competition stiff enough to beat.

With large pocket size and healthy balance sheet and considerably high global image customer awareness is high and ability to innovate is high making it difficult for others to enter.

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