Final answer:
Firms need to develop b)strategic flexibility to handle hyper-competition, which involves continuous adaptation and innovation to sustain and evolve their competitive advantages.
Step-by-step explanation:
In order to cope with hyper-competition, firms need to develop strategic flexibility through continuous learning. This concept is essential as it relates to a firm's ability to adapt and evolve in response to changes in the competitive landscape.
An innovative firm must consistently seek out new ways to improve and differentiate their products and processes, capitalizing on economies of scale and focusing on core competencies.
Companies like Samsung emphasize the importance of innovation as a means to maintain a competitive edge and achieve above-normal profits, even if only temporarily, before competitors can adapt.
Developing strategic flexibility allows businesses not only to sustain their current comparative advantages but also to evolve them over time.
As stated by Samsung's CEO, they achieve this by pursuing new innovations relentlessly. Such agility in business aligns with the dynamic nature of intra-industry trade.
where advantages stem from how firms learn and grow, rather than static factors like geography or climate.