Final answer:
A company using its resources to reposition its product line into a growth category within the same sector is utilizing innovation strategies such as product line extension or market development. Focus on core competencies and innovative disruption are key to achieving temporary competitive advantages and higher profits.
Step-by-step explanation:
When a company stays in the same sector but repurposes its resources to reposition its product line into a growth category, it is engaging in a type of innovation known as product line extension or market development. This involves altering or improving existing products, or creating new ones, to present better characteristics or performance which consumers desire. For example, a company may leverage its core competency by focusing on a few key products and revamping them to meet emerging market trends, thus seeking to generate higher profits and gain a temporary edge over competitors.
Firms concentrate on innovation because, as noted by Gregory Lee, former CEO of Samsung, innovation is pivotal in enabling consumers to explore a world of possibilities with technology. Successful innovation can lead to products that disrupt their industry and deliver enhanced value to customers, often resulting in short-term advantages and above-normal profits.