Final answer:
The durability of a competitive advantage is reliant on its imitability, substitutability, and sustainability, which includes the importance of innovation and flexibility in maintaining a firm's market position.
Step-by-step explanation:
The durability of a competitive advantage depends on imitability, substitutability, and sustainability. These factors determine a firm's ability to maintain its unique position in the market. Imitability refers to how difficult it is for competitors to copy a company's advantage. Substitutability addresses whether alternatives exist that can replace a company's products or services.
Sustainability involves whether a competitive advantage can endure over time through innovation, flexibility, and continuously adapting to market changes and customer desires. As industries evolve, firms must remain flexible, engage in new innovation, and evolve their comparative advantage in response to changing circumstances to maintain long-lasting competitive benefits.