What is Competitive Advantage?
‘Competitive Advantage’ refers to the advantage a company has against the competition which helps it remain in the business. The advantages could range from pricing, manufacturing process, better customer service, location of the company, etc.
The competitors will always try to overcome the competitive advantage of a company to achieve success. Hence, a company’s competitive advantage should be such that its effectiveness should not diminish with external factors.
There are two major kinds of competitive advantages, differential and comparative. Comparative advantages include the product or service-based factors that help the end-users perceive it better than the competition.
Similarly, differential advantages are mostly related to the economies of scale, pricing of the product or service, availability of service centres, etc.