Question

Strategies that yield sustainable competitive advantage are important because

a. a competitive advantage is what enables a company to achieve its strategic objectives.

b. these enable a company to attract sufficiently large numbers of buyers who have a lasting preference for its products or services over those offered by rivals, despite the efforts of competitors to offset that appeal and overcome the company's advantage.

c. competitive advantage forms the underpinnings of a company's strategic vision.

d. increases in shareholder value are contingent on a sustainable competitive advantage.

e. None of these choices are correct.

Answer 1

Sustainable competitive advantage is crucial for long-term shareholder value, achieved through innovation, cost leadership, or distinct products. Monopoly conditions, while not always achievable or lawful, reflect the ultimate competitive advantage with minimal competition and maximized profits.

Step-by-step explanation:

Strategies that yield a sustainable competitive advantage are essential for organizations aiming to maximize shareholder value over the long term. When a company can maintain a competitive edge through innovation, cost leadership, or unique product offerings, it can sustain above-normal profits before competitors replicate their success. Samsung's CEO Gregory Lee emphasized the importance of innovation as the key to unlocking new opportunities and maintaining a competitive lead. Sustainability goes beyond immediate gains - it involves a commitment to long-term growth and value generation that can endure market fluctuations and evolving consumer demand.

A monopoly represents the antithesis of perfect competition and provides the clearest path to sustained profits. Although many would surmise that firm executives advocate for market competition, the reality is they prefer scenarios of minimal competition, akin to an athlete desiring to outclass all competitors to claim an Olympic gold medal. With fewer rivals, a business can command higher profits and shareholder value without the constant pressure of market competition eroding its position. Balancing competitive pressures and striving for monopoly-like advantages without actual monopolization can lead to a sustainable competitive edge.