How can mergers and acquisitions contribute to competitive advantage?

Mergers and acquisitions can significantly contribute to competitive advantage primarily by providing access to new markets and technologies. When companies merge or acquire another firm, they often gain the ability to enter markets that were previously out of reach. This access can lead to increased market share, revenue growth, and enhanced product offerings.

Furthermore, the acquisition of new technologies can provide firms with innovative capabilities that can streamline operations, improve products or services, and meet customer needs more effectively. This technological advancement can create a competitive edge over rivals, which is crucial in rapidly changing industries where innovation is key to survival.

The other options do not contribute positively to competitive advantage. For instance, increasing employee turnover is generally detrimental as it can lead to the loss of experienced personnel and a decline in organizational knowledge. Consolidating operations to eliminate competition might offer short-term benefits but can raise regulatory concerns and lead to negative public perception. Minimizing product diversity often restricts a company's ability to meet various customer preferences, which can be detrimental in a competitive landscape. Hence, the ability to tap into new markets and technologies stands out as a powerful mechanism for achieving sustained competitive advantage through mergers and acquisitions.