What is meant by competitive advantage?

Competitive advantage refers to the unique attributes or qualities that enable a company to outperform its competitors in the marketplace. This can include factors such as superior product quality, innovative technology, effective marketing strategies, exceptional customer service, or operational efficiencies. Essentially, it highlights what differentiates a company from its rivals, allowing it to attract more customers or command higher prices, leading to better profitability.

Understanding competitive advantage is crucial for businesses as it guides them in strategic planning and decision-making processes. Companies strive to develop and sustain these advantages to achieve long-term success and maintain a dominant position in their respective markets. This concept is foundational in business strategy and is vital for any company looking to create value and optimize its performance relative to its competitors.