competitive advantage
What beats rivals
Competitive advantage is an edge one business or entity holds over its rivals—lower costs, superior products, stronger brand recognition, proprietary technology, or better talent.
The advantage allows a company to outperform competitors and capture greater market share: Their patented process gave them a competitive advantage.
A sustainable competitive advantage is one that's difficult for rivals to replicate.
Recognizing meaningful differences
- core competencyPrimary business strength
- value propositionPromised benefit to customers
- strategic positioningDeliberate advantageous arrangement
- market positioningBrand's competitive stance
barriers to entry · first-mover · network effects · sustainable · brand loyalty · customer retention · market penetration · strategic alliance
Percentage of sector sales
- revenue growthIncrease in business income
- pricing powerControl over what you charge
- marginEdge of a page
- return on investmentProfit relative to cost
customer loyalty · cash flow · market dominance · premium pricing · financial performance · monopoly power · brand equity · profit margin
Forceful interruption of process
- breakthroughSudden important advance
- patentsExclusive rights to inventions
- intellectual propertyLegal rights over inventions
- R&DCreating new products
proprietary technology · cutting-edge · pioneering · invention · prototyping · entrepreneurship · ideation · creativity
Output relative to input
- optimizationMaximizing efficiency or performance
- streamliningMaking more aerodynamic or efficient
- automationSelf-operating system design
- cost-savingReducing expenditure
lean operations · throughput · scalability · workflow · process improvement · benchmarking · resource allocation · capacity utilization
differentiation
Recognizing meaningful differences
- core competencyPrimary business strength
- value propositionPromised benefit to customers
- strategic positioningDeliberate advantageous arrangement
market positioning · barriers to entry · first-mover · network effects · sustainable · brand loyalty · customer retention · market penetration · strategic alliance · resource allocation
market share
Percentage of sector sales
- revenue growthIncrease in business income
- pricing powerControl over what you charge
- marginEdge of a page
return on investment · customer loyalty · cash flow · market dominance · premium pricing · financial performance · monopoly power · brand equity · profit margin · shareholder value
disruption
Forceful interruption of process
- breakthroughSudden important advance
- patentsExclusive rights to inventions
- intellectual propertyLegal rights over inventions
R&D · proprietary technology · cutting-edge · pioneering · invention · prototyping · entrepreneurship · ideation · creativity · ingenuity
productivity
Output relative to input
- optimizationMaximizing efficiency or performance
- streamliningMaking more aerodynamic or efficient
- automationSelf-operating system design
lean operations · cost-saving · throughput · scalability · workflow · process improvement · benchmarking · resource allocation · capacity utilization · precision
- economicssupply and demand, inflation, GDP, GNP, gross domestic product
- strategystrategy, grand strategy, tactics, tactic, tactical
- investingstocks, stock, bonds, investing, investor
- market economicsmonopoly, oligopoly, duopoly, monopsony, market concentration
- business buzzwordsbrainstorming, breakthrough, design thinking, scaling, pitching
- business planexecutive summary, financial projections, market analysis, business model, mission statement
competitive advantagecommoditization
Reduction to undifferentiated goods
structural weakness · undifferentiation · losing position · industry standard · table stakes
competitive advantageliability
Legal or financial obligation
weakness · vulnerability · handicap · Achilles heel · millstone
advantage, compete, competition, competitor, competitive, disadvantage, competing, advantages, advantageous