An investor is considering in which of two start-up companies to invest. The investor has faith in the industrial organization model of above-average returns and is using that as a guideline to make a decision. Both start-up companies propose to manufacture health-focused foods with low salt, low sugar,high fiber, and no artificial additives. RexRich Foods has a business strategy of producing a differentiated product for which consumers will pay more. Green Pastures Foods is in the health-foods industry because of its internal culture and commitment to healthy lifestyles, but it does not have any executives
with experience in food production. Which firm will the investor feel is most consistent with the model of industrial organization?Green Pastures FoodsRexRich FoodsBoth firms are consistent with the I/O approach.At the entrepreneurial stage, the model that companies follow is not important.

Green Pastures Foods possess a great internal culture and commitment to healthy lifestyles, however, a major take back is the fact that none of its executives are experienced in food production. RexRich Foods, on the other hand, is more accomplished and is diversifying with the production of a differentiated product, which consumers will pay more.

Both companies have a good above-average returns industrial organization model. However, RexRich Foods possess expertise that Green Pastures Foods do not purchase, which makes them comfortable to produce in this space.