Definition

competitive advantage

Contributor(s): Rachel Lebeaux

Competitive advantage is the favorable position an organization seeks in order to be more profitable than its competitors.

Competitive advantage involves communicating a greater perceived value to a target market than its competitors can provide. This can be achieved through many avenues including offering a better-quality product or service, lowering prices and increasing marketing efforts. Sustainable competitive advantage refers to maintaining a favorable position over the long term, which can help boost a company's image in the marketplace, its valuation and its future earning potential.

This was last updated in November 2012

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