In the context of competitive markets, a competitive advantage based on location is often sustainable because:

• A. location-based advantages are easily transferable to other firms
• B. consumer preferences for location change frequently
• C. government regulations always prevent new entrants in all locations
• D. geographical barriers make it difficult for competitors to replicate the advantage

Answer: (D)

Verified step by step guidance

1. Understand the concept of competitive advantage in the context of competitive markets, which refers to a firm's ability to maintain superior performance relative to its competitors.
2. Recognize that a location-based competitive advantage arises when a firm's geographic position provides unique benefits, such as proximity to resources, customers, or transportation hubs.
3. Analyze why such an advantage might be sustainable: consider factors like geographical barriers that prevent competitors from easily replicating the firm's location benefits.
4. Evaluate the incorrect options by understanding that location-based advantages are not easily transferable, consumer preferences for location tend to be stable rather than frequently changing, and government regulations do not always prevent new entrants in all locations.
5. Conclude that the sustainability of a location-based competitive advantage primarily stems from geographical barriers that make it difficult for competitors to replicate the advantage.