In business, competitive advantage involves having something your competitors do not. It is a distinctive feature that makes a business successful. Good competitive advantage has to be hard to copy, otherwise competitors will soon find a way to imitate or improve on it.

Simple competitive advantage

The simplest form of competitive advantage is merely the ability to charge less than your competitors do for a particular product.


A very powerful way to be distinctive is through innovation. This means you come up with new ideas. They could be - It is important to protect innovation through patents - if you want it to last.


Good relationships with stakeholders can give a company competitive advantage. Customers who are treated well will hopefully come back, suppliers that are treated well will supply punctually. These relationships are known as a business' 'architecture', and can be a powerful form of competitive advantage.

These relationships are often retained more easily when times are good than in times of hardship - for instance, Marks and Spencer had to pull out of relationships with UK suppliers to buy more cheaply in the Middle East when times were hard.


Business which have a particular reputation and image have a powerful competitive advantage. If people associate you with a particular value or product, you're onto a winner. Examples - Reputation takes a long time to build, but is invaluable once gained.

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