A competitive advantage is a set of attributes that enable your company or products to outperform your peers. It’s what gives you superiority in your market. It is the thing that you have that others don’t or the things that you have that are just better than what everyone else has. Some example include:
Having a best in class line up, with the correct alignment and incentives is a pretty tough team to beat. More likely than not, you may have a few stars or even a superstar. If they are focused on key parts of your business, they may be able to allow you to out play your opponents.
Patents are a terrific barrier for competitors to overcome. If you have a superior process, capability or other intellectual property that distinguishes you from your competition, it is absolutely worthwhile to protect it. Documenting it carefully as a part of the patent process is a smart step.
Head to head, it’s logical to always pick the lowest priced offer. If you can reduce your base costs below your competition, you are in a great position to take market share away by competing on price. Beware that price based competition is a risky strategy in the long term and technology, regulation and other external factors frequently reset the cost basis of companies. A simple rule to follow is, every cost must add value to your customers.
Fundamentally, a good competitive advantage is tangible and measureable; it should be easy to communicate to your constituencies.