Final answer:
Companies use a digital marketing strategy to market their products on the Internet and establish a competitive edge. This strategy benefits from increased reach and the ability to operate in 'winner-take-all' markets, where a firm can dominate sales globally.
Step-by-step explanation:
When companies use the Internet to market their products and gain a competitive advantage, they are using a digital marketing strategy. The strategy leverages online channels like social media, email, search engines, and websites to reach consumers, often leading to increased competitiveness due to globalization and technology shifts in recent decades. This approach helps businesses of all sizes compete by reaching out to customers well beyond their local geographic area, offering the potential of 'winner-take-all' markets that benefit from significant economies of scale.