Competitive Advantage: The Ultimate and Actionable Guide for 2021.

What is a competitive advantage?

Definition of competitive advantage

A competitive advantage is a company’s “superior performance to other competitors in the same industry”.

That superior performance comes from an attribute that is unique to that company and very difficult to replicate, copy, imitate.

That attribute is usually: intellectual property (patents, copyrights, trademarks), brand equity, culture, know-how, reputation, unique competencies…(source)

A more detailed definition of competitive advantage

There are 2 types of competitive advantage:

1. Comparative advantage: “A firm’s ability to produce a good or service more efficiently than its competitors, which leads to greater profit margins.” (source). This basically means that a company is able to produce at a lower cost.
2. Differential advantage: “A firm’s products or services differ from its competitors’ offerings and are seen as superior.” (source). This…