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What is competitive advantage?


Understanding the phrase “competitive advantage” is an ongoing challenge for many decision makers. Barney J, 1991 defined the term as follows. “ A firm is said to have a competitive advantage when it is implementing a value creating strategy not simultaneously being implemented by any current or potential competitors and when these other firms are unable to duplicate the benefits of this strategy”

From the above description it appears that company resources have a major role to play in obtaining a competitive advantage.

Before a competitive advantage can be established, it is important to know the following:

· Benefit: A company must be clear about what benefit(s) their product or service provides. It must offer real value and generate interest.

· Target Market: A company must establish who is purchasing from the company and how to cater to its target market.

· Competitors: It is important for a company to understand other competitors in the competitive landscape.

To construct a competitive advantage, a company must be able to detail the benefit that they provide to their target market in ways that other competitors cannot.

Models of competitive advantage

· Highly skilled labor force

· Utilization of new technology

· Brand image recognition

· Access to natural resources that are restricted from competitors


To conclude, competitive advantage is about distinguishing your products, services and the way you conduct business from competitors. It contributes to various aspects of the business such as, increases profits, attract more clients, customers and brand loyalty. Establishing such an advantage should be a goal for all companies.




Nozuko Tikayo

"Align all the elements of your life to support the pursuit of what has deep meaning to you"

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