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Competitive Advantage Model

        posted by , March 02, 2011

Competitive Advantage is a business advantage that one company (or country etc...) has over competitors.

Simplicable's Competitive Advantage Model

A Competitive Advantage Model is a useful tool for competitive analysis, strategy planning and building business cases.

competitive advantage model

The model is used to score your business against competitors in terms of economic fundamentals, business capabilities, cost leadership and product differentiation.


Consider a railway company that has one unique line between a commodity rich region and an industrial region. The company's Competitive Advantage Model might look something like this:

business strategy example

The company has average employees, no special know-how and inferior technology to its competition. Despite this, it has a competitive advantage in terms of property, plant and equipment (no competition on an important rail route). This alone provides the company with competitive business capabilities, product differentiation and competitive advantage over its competitors.

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A business with competitive advantage is like a star professional athlete: they're in a league of their own. They're not necessarily good at everything but they do a few things very well.

Sustainable competitive advantage is another animal. It's an advantage that keeps going for many years or decades. Ideally, forever.

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