Final answer:
To create a sustainable competitive advantage, businesses should focus on technological advancements which enable them to produce products more efficiently or with features that meet consumer demands. They must also adapt to the changing nature of comparative advantage and the increased competition that comes with globalization.
Step-by-step explanation:
Creating a sustainable competitive advantage is essential to the survival of a business and its ability to deliver above-average performance. Technological advancements play a crucial role in this process. The rigorous competition in the market incentivizes firms to innovate and create technology that allows products to be produced more efficiently or with desirable features that consumers demand. Companies like Samsung, who focus on the relentless pursuit of innovation, can maintain a temporary edge over their competitors, which results in earning above-normal profits. Moreover, in the realm of intra-industry trade, comparative advantages are not static; they are dynamic and can change over time. Firms must engage in continuous learning about specialized products and take advantage of economies of scale to improve worker productivity. This dynamic nature of comparative advantage indicates that businesses should be adaptable and responsive to changes to maintain their competitive edge.
Additionally, the emergence of globalization has redefined markets, increasing competition and encouraging businesses to adapt their strategies. The interconnectedness of technology and globalization means that local businesses now compete on a global scale, encountering both opportunities and threats from overseas competitors. Successful businesses understand the nature of this dynamic environment and continually adapt to maintain relevance and competitive advantage.