What are two ways to sustain competitive advantage?

• A. Reducing cost, Product differentiation
• B. Increasing debt, expanding workforce
• C. Entering new markets, licensing products
• D. Outsourcing production, franchising

Answer: (A)

Two main ways to sustain a competitive advantage are reducing costs and differentiating the product. Lower costs boost efficiency and profit margins, letting you compete on price or reinvest to stay efficient. Differentiation adds unique value—through features, quality, branding, or service—so customers prefer your offering and are willing to pay more. When a business combines both approaches, it can stay ahead because it relies on distinct capabilities that are harder for rivals to copy quickly. The other options describe growth or operational choices, not lasting competitive advantages by themselves.