Question

Technology and pharmaceutical companies require employees to continually develop new products and services to create an advantage in the market. In effect, these companies pursue competitive advantages based ________.

A) On financial stability
B) On human capital
C) On operational efficiency
D) On marketing strategies

Answer 1

Technology and pharmaceutical companies strive for competitive advantages through innovations in human capital and technology, as these can lead to higher profits and maintain a temporary market edge.

Step-by-step explanation:

Technology and pharmaceutical companies pursue competitive advantages based on human capital, technology, and physical plant and equipment. These companies are driven by market competition, which provides a strong incentive for the discovery of new technology. This can lead to higher profits by producing products more cost-effectively or with features that consumers desire. As emphasized by Gregory Lee, former CEO of Samsung, innovation is crucial to maintaining a temporary edge in the market, enabling firms to earn above-normal profits. Moreover, a competitive and market-oriented economic climate encourages the investment in human and physical capital, fostering macroeconomic growth and driving businesses to seek new technologies.