Something that allows a company to win customers or earn profits that competitors find hard to match.
Example
Proprietary data that improves a product in ways rivals cannot copy.
Important
An advantage is only valuable if it is durable.
Related terms
Moat — A durable competitive advantage that protects a business from rivals.
Economies of scale — Cost advantages that arise as output grows, lowering the cost of each unit produced or delivered.
Lessons that explain it
The real competitor is often a spreadsheet or doing nothing — Competitive diligence maps every alternative a customer could choose, including internal tools and inaction, and uses win and loss data to see where the company actually wins. (10 min)
A moat is what stops a competitor copying your success — Competitive advantages come from switching costs, network effects, proprietary data, brand, scale and distribution. Network effects are especially powerful, and especially often claimed without evidence. (11 min)