Final answer:
A strategy that maximizes competitive advantage and minimizes competitive disadvantage is typically true, aimed to outperform rivals. Comparative advantage can arise from various factors beyond natural resources. Executives often prefer less competition, similar to an athlete who wants fewer competitors for better chances at winning.
Step-by-step explanation:
The statement that a strategy maximizes competitive advantage and minimizes competitive disadvantage is generally true. An effective strategy should indeed leverage a company's strengths while mitigating its weaknesses compared to its competitors.
This idea forms the basis of strategic planning where firms seek to position themselves in a way that capitalizes on their unique resources and capabilities to outperform their rivals.
However, the source of comparative advantage does not have to be only natural elements like climate and mineral deposits. Comparative advantage can come from a variety of factors including the education level of workers, specialized knowledge, economies of scale, and technological advantages.
It is derived from the ability of a country or firm to produce a particular good or service at a lower opportunity cost than others, leading to more efficient trade possibilities.
Executives might not always champion market competition, contrary to popular belief. They often prefer situations with less competition, which tend to be more conducive to higher profits. This is analogous to an athlete preferring to compete in the Olympics without strong competitors - the fewer the competitors, the higher the chances of achieving a gold medal.
In business, the extreme case of having no competition at all is known as a monopoly, which is a market structure where one firm dominates the market, thereby avoiding the challenges of intense competition.