Competitive advantage is a sustainable advantage over competitors, which can be divided into cost advantage, difference advantage and focus advantage.

Competitive Advantage is the work of Michael Porter, a famous professor at Harvard Business School, and it is another Bible in this field. Each of his books has become a must-read for middle and senior managers of domestic enterprises and graduate students. All his theories are based on comprehensive and meticulous scientific investigation, which is highly operational.

Extended materials:

Elements of competitive advantage:

1. Previous or acquired resources. The resources here are unique resources that competitors do not have, and it is difficult for competitors to copy such resources.

2. innovative ability. Some companies are more capable of innovation than others, and these companies naturally have a competitive advantage. Innovation ability is very important, through which we can often find the real breakthrough point to gain competitive advantage, and make competitors at a disadvantage in the long-term competition.

3. The real competition gap. In fact, any resource has a real advantage over competitors. It is not enough to only emphasize the identification of truly strong resources, but also to be more competitive than opponents. For example, it is not enough to have "low cost and high quality", but also to make the cost lower than that of competitors and the quality higher than that of competitors.

4. Substitution ability. If resources cannot be replaced, then they usually have greater competitiveness. Sometimes unique resources can be replaced by newly invented resources. Once this happens, the competitive advantage will disappear.

5. suitability. Any kind of resource must be able to transfer its own advantages to the company, and try not to let competitors and others get it. Just because a resource has an advantage does not mean that its owner will get this advantage. This is the question of suitability. It is not the most important thing to have it, but the most important thing is to have it and be suitable.

6. Durability. Useful resources and other competitive advantages must last for a certain period of time. Resources that are not sustainable are meaningless. Moreover, in the future, competitive advantages are usually non-renewable competitive advantages. For example, Kodak's trademark advantages are durable and non-renewable.

7. Imitation ability. If resources have competitive advantages, they are not easy to be imitated. Although many resources will be copied eventually, the process of imitation can be delayed by the following ways:

① Tangible features. Some special forms of differences, such as a trademark, or a special geographical location, or the protection of patents, will delay the process of being imitated.

② the fuzziness of causality. Fuzziness means not letting competitors know what kind of resources create competitiveness, which is difficult for competitors to learn or obtain.

③ investment obstacles. When the market is limited or the growth prospect is uncertain, if the company invests heavily in the new strategy, it can well prevent competitors from entering the market, especially when launching new products and services requires a lot of capital or major marketing activities.

Baidu encyclopedia-competitive advantage