What does 'competitive advantage' mean?

The concept of 'competitive advantage' refers to a condition or circumstance that enables a company to perform better than its competitors in the marketplace. This can manifest in various ways, such as through higher quality products, superior customer service, or more efficient production processes, allowing a company to attract more customers and achieve higher profits.

Having a competitive advantage can result from a variety of factors, including unique technologies, brand reputation, access to the best natural resources, or better-trained personnel. These factors not only help a business stand out from its rivals but can also create a sustainable edge that is difficult for competitors to replicate, leading to long-term success in the industry.

This definition captures the essence of what it means for a company to excel and thrive against its competitors, encapsulating the broad range of possible sources of that advantage, rather than limiting it to specific areas like marketing or cost reduction.