Competitive advantage
A durable characteristic allowing a company to outperform competitors persistently: lower costs, perceived differentiation, network effects, high switching costs or privileged access to resources. A genuine competitive advantage withstands time and imitation attempts.
In practice
The strongest competitive advantages compound over time. A network effect like LinkedIn’s is worth more at 900 million members than at 10 million. The switching costs of an ERP embedded for a decade make migration economically irrational. For a small business, the advantage often lies in local knowledge or niche expertise that a large organisation cannot replicate at reasonable cost.