Technological innovation affects companies primarily by?

Technological innovation plays a crucial role in enhancing how companies operate by improving their efficiency. This improvement can manifest in various ways, such as automating processes, streamlining supply chains, or adopting new software that facilitates better data management and decision-making. As companies leverage technology to optimize their operations, they can produce goods and services more effectively, which often leads to cost reductions, increased output, and improved overall performance.

This, in turn, can positively influence profit margins and competitive positioning in the market. While the other options may have some relevance, they do not encapsulate the primary impact of technological advancements the way operational efficiency does. For example, while technology can indeed influence competition and pricing strategies, these are often secondary effects that arise after a company has improved its operational capabilities. Hence, the most direct and significant impact of technological innovation on companies is through the enhancement of operational efficiency.