Question

For a business, what may be a competitive advantage?

A. achieving a profit during its fiscal year
B. returning more value to shareholders than rival firms
C. winning awards for corporate social responsibility
D. purchasing a rival company

Answer 1

A competitive advantage for a business is a characteristic that allows it to outperform its competitors, such as innovation or the ability to reinvest profits into the business for sustained growth.

Step-by-step explanation:

In the context of business strategy, a competitive advantage may be defined as a characteristic that allows a company to outperform its competitors. Examples of competitive advantage include returning more value to shareholders than rival firms, and innovation, which enables a company to produce products more cheaply or with desirable characteristics that consumers seek. Gregory Lee, CEO of Samsung, emphasizes the importance of innovation as a key principle that allows consumers to discover new possibilities with technology and gives a firm the upper hand, at least temporarily.

Another source of competitive advantage is being able to reinvest profits into activities such as equipment, structures, and research and development, thereby enabling sustained growth and improvement over competitors.

Competitive Advantage