Competitive Advantage

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Definition: Competitive Advantage

Competitive advantage is the advantage a company has over its competitors which helps it to sell more products or generate more revenue. The company has an edge over others because of which it is able to increase the shareholders value. There can be various sources of competitive advantage – patents, a strong distribution network, cost – efficient production system etc.

A sustainable competitive advantage is the advantage which is difficult to be overcome or be imitated by the competitors. Even a company with sustainable competitive advantage needs to innovate and create more sources of advantage so as to prevent competitors from neutralizing the advantage over a period of time.

 

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