What does it means to have a competitive advantage?

Expert Answers
pohnpei397 eNotes educator| Certified Educator

A business has a competitive advantage over its competitors when it has some advantage over them that allows it to sell more products than they do or to sell its products at a higher price.  In other words, this is an advantage that allows a firm to outcompete its rivals.

Firms can try to gain a competitive advantage in a number of ways.  One firm might try to undersell its rivals, using cost as its advantage.  Another might try to develop some other defining characteristic such as quality or a quirky image that will set it apart from its rivals.  Still another firm might seek to drastically narrow the market it is trying to serve so that it becomes so specialized that it is better at serving its particular niche.

All of these are ways to seek competitive advantage because a competitive advantage is simply an attribute that allows a firm to outcompete its rivals.

jesseldridge | Student

A competitive advantage means an advantage that a company has over its competitors which sets aside the company to get good sales or margins and carries more customers than its competitors have. This competitive advantage can be the cost structure of company, product offerings, delivery network and customer support.