Answer:
B. improve the quality of its product
Step-by-step explanation:
Competitive advantage can be defined as conditions, factors or circumstances that allow a business firm (organization) to manufacture finished goods or services better and perhaps cheaper than other (rival) firms in the same industry. Thus, it's responsible for putting a business firm in a superior or more favorable position than rival firms.
This ultimately implies that, a competitive advantage has a significant impact on a business because it increases its level of sales, revenue generation and profit margin when compared to rival firms in the same industry.
In this scenario, a small manufacturer of office equipment faces new competition from foreign firms. Thus, the company is most likely to respond to this competition by improving the quality of its product so as to increase value proposition.
In conclusion, competitive advantage is a feature that makes a customer to place a greater value on the product or service of a particular company than they do on similar products or services from its competitors (rivals) in the same industry.