Final answer:
A competitive advantage is typically a temporary condition that allows a firm to outperform its rivals by being more innovative or cost-efficient, not by reducing investor risk to zero or preventing other firms from finding investors.
Step-by-step explanation:
A competitive advantage can be defined as having a temporary edge over competitors, which allows a firm to earn above-normal profits. This advantage arises when a company can either produce products more cheaply, or create products that have desirable characteristics that consumers seek. The insight from Gregory Lee, CEO of Samsung, highlights the importance of innovation as a driver for finding that edge. A firm that is continuously innovative will have a better chance at maintaining a competitive advantage, as it can swiftly adapt to market changes before others can catch up.
Competitive advantage is not permanent but can be sustained for a period if a firm is able to keep competitors at bay through strategies that are costly or difficult to duplicate. Over time, as a company establishes itself, it relies less on personal investor relationships and more on widely available information regarding products, revenues, costs, and profits—making it easier to attract investment without drastically reducing investor risk.