Final answer:
A company's strategy that aligns with competitive conditions can lead to increased market share, improved profitability, and competitive advantage. Through innovation and mergers, companies can stay competitive, offering better or cheaper products and contributing to economic prosperity.
Step-by-step explanation:
A company's strategy is increasingly effective the more it can match the company strategy to competitive conditions. This effective strategic alignment allows the firm to achieve several objectives: increase its market share, improve its profitability, and gain a competitive advantage. Specifically, through mergers, a company can grow larger, become more efficient, acquire new product lines, address competitors, and change its corporate identity.
Moreover, market competition is a catalyst for innovation. It incentivizes firms to develop new technology to produce products more cheaply or with unique features that consumers desire. This innovation can provide a temporary edge, leading to above-normal profits. As highlighted by a statement from Gregory Lee, former CEO of Samsung, continuous innovation is crucial for staying competitive in the market.
It is clear that companies stand to benefit by matching their strategies to market conditions — they can offer consumers better or less expensive products, and in doing so, can outperform their competitors and ultimately contribute positively to the overall economy.