We are independent & ad-supported. We may earn a commission for purchases made through our links.

Advertiser Disclosure

Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.

How We Make Money

We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently from our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

What Are the Different Methods for Building Competitive Advantage?

By Osmand Vitez
Updated May 17, 2024
Our promise to you
WiseGeek is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At WiseGeek, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

Building competitive advantage allows a company to succeed in a particular area or areas. The company often succeeds in a manner that makes it difficult for other competitors to duplicate these advantages. A few of the more common ways for building competitive advantage include product features or benefits, physical locations, or staff. These advantages often work their way into the price at which a company markets its goods or services. The types of available competitive advantages typically depend on current economic conditions along with the number and stability of competitors in the company’s operating industry.

Product features and benefits can be one of the most important ways a company differentiates itself in the market. Companies can focus on what consumers want, the addition of new features not seen before in the market, and an ability to reach more consumers with a single product. All these elements plus more are common when building competitive advantage. In some cases, a company may even be able to use these elements to succeed in a product niche. A common niche, for example, is a substitute good that takes the place of a much higher-priced item that is out of reach for many consumers.

Another option for building competitive advantage is location, location, location. Companies often look for specific spots to place a business in order to reach the most consumers. Successful location may also be where little or few competitors exist in the current environment. Another approach is to simply blanket a market with business outlets. While this can result in lower profits on a per-location basis, the company has the advantage of easy access for any consumer looking for a particular product.

Manufacturing, retail, or service-based companies can use staff when building competitive advantage. The individuals working in a company can bring specific knowledge, skills, and abilities that do not exist anywhere else. Skilled workers often provide intelligent thought and strong work skills. In a low-skill market or one with few options for hiring strong employees, this can be a good starting point for a competitive advantage. Large companies can even hire all the talented employees in a market in order to gain an advantage over competitors.

All of these advantages and more will likely make their way into a company’s price for goods and services. When this occurs, a company can experience a cost leadership advantage because companies with lower costs often undersell competitors. In certain markets, companies may even be able to charge higher prices and earn better profits when experiencing cost leadership. This is possible because no other business can produce similar goods.

WiseGeek is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.

Discussion Comments

WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.

WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.