What is competitive advantage: Characteristics, types, and examples?

A competitive advantage is all the aspects and characteristics that make a brand or product stand out from the competition, offering more value and benefits to customers.

Building lasting relationships with customers is something that every company wants and needs, especially in these times of increased competition.

You need your business to be constantly evolving and offering attractive attributes to consumers to gain their preference and establish your competitive advantage.

One of the most important challenges is to know consumers in depth. Identify your buyer personas is the difference between success and failure, because only then will you be able to determine which strategy is the right one. This also applies to the competition, since you must know them in detail.

What is a competitive advantage?

A competitive advantage is all the aspects and features that make a brand or product stand out from the competition, offering more value and benefits to customers. Advantages can vary, but the most important factor in this strategy is not to focus on what you sell, but how you sell it.

Competitive advantage is divided into internal and external.

The first is based on production prices and optimal product management, since offering lower prices for the same quality positions you above your competitors.

The second refers to features that stand out among consumers, such as the price of a product, as mentioned above, or a better quality service, with differentiators such as promotions, loyalty rewards or contests.

What is a competitive advantage for?

Thanks to the competitive advantage, you have a basis for building your value proposition: that aspect (or several aspects) that makes your product or service the most convenient option for your target audience. And once you have established the value proposition, then you know what you have to communicate to your audiences to make it known, so the competitive advantage directly influences your marketing strategy.

Competitive advantage according to Michael Porter

Michael Porter, an award-winning economist, is the originator of the term "competitive advantage". His book Competitive strategy: techniques for the analysis of industrial sectors and competition.published in 1980 and translated into 27 languages, is considered his most important work. In this key text for the business world, he introduced the term we have been talking about.

According to a text published by the author in 1985, "competitive advantage grows fundamentally because of the value a company is able to generate. The concept of value represents what buyers are willing to pay, and the growth of this value to a higher level is due to the ability to offer lower prices relative to competitors for equivalent benefits or to provide unique benefits in the market that can offset higher prices".

Economists and businessmen consider this term as a revolution in the way of understanding the production cycle of a corporation.. Porter's theories represent a new approach to the importance of information for the company. Information that can refer to production cycles, distribution, marketing, sales strategies or customer service.

"If all you're trying to do is essentially the same thing as your rivals, you're unlikely to be very successful."

For Michael Porter, information is an extremely important input for any company. It should be treated as a resource. Competitive advantage has a direct impact on the company's concept of value.. The important thing is to know how to leverage the information so that the value is maintained over time. and that it represents an advantage over companies that have a place in the market.

Types of competitive advantages of a company

The positioning of a brand or company can be divided into two forms: comparative and differential. In addition, it can be considered as sustainable, regardless of whether it is comparative or differential.

Comparative advantage

Comparative advantage is making or offering a product or service in a better way than the competition. When your company provides the same as others, the consumer has the opportunity to choose, and this is when competitive advantages appear.

A very familiar example is the case of Coca-Cola and Pepsi. Both companies are in the beverage industry and, although their product is similar, consumers will choose the one that best suits them depending on different aspects such as price, presentation or advertising, among others.

Differential advantage

The differential advantage looks for the characteristics that stand out from the rest of the competitors. It is what makes a product or brand different.

An example of this is Apple, who over the years has managed to distinguish itself in the technology market with unique designs and a proprietary operating system, despite increasing competition.

For users, there may be thousands of other brands offering high-quality computers or smartphones, but Apple's stylish designs win their loyalty. This keeps that company at the top of the technology market.

Perhaps one of the most successful aspects of this brand is the mix of design and cutting-edge technology, in addition to promoting social status.


Sustainable competitive advantage

Competitive advantage can have the quality of "sustainable" when it is planned for the long term. These types of advantages are planned for a business to grow around for years to come.. They are usually related to registered products that can be marketed by a single company.

Coca-Cola would be an example of this type of advantage. There are competitors and even imitations. But there is only one Coca-Cola, and no one else can produce the iconic cola. There are many distributors and subsidiaries around the world. But as long as the brand's flagship product is owned by the corporation, no one else can produce this soft drink.

Sustainable competitive advantages, therefore, have the potential to create a new market. That is why companies invest so many resources in the development of novel products. Good management and innovation are essential to develop a sustainable competitive advantage.

The 4 elements of competitive advantage

1. Price

It is about lowering prices in production, labor or distribution of products, without compromising quality. When the price of your brand is accessible to the consumer, you are more likely to increase sales.

2. Quality

In this aspect it is more important to take care of the details and the prestige of the company, even if the price is not so accessible to the consumer. It is ideal for you to offer distinction and position yourself as a leader in the market.

3. Experience

This is not about how much you know about your industry, but about the attention you provide to customers. What sets you apart from the competition? What makes you special?? Giving consumers a unique treatment makes them loyal to your brand..

We all want to live memorable moments, and if your brand provides satisfaction that is the value that distinguishes you from the rest. The key is in the details.

Customization and service

Today's customers want brands to understand them.. Knowing consumers better is the competitive advantage that makes you different.. Knowing what they want, what they aspire to and what problems they want to solve is not only a social aspect, but valuable in the sense of how endearing your product can become.

Personalized service lets customers know that they are at the center of your business. In fact, 70 % of the purchasing experience is anchored in the way your customers perceive you treat them.

18 examples of competitive advantages

  • Zara
  • Netflix
  • Pepsi
  • Amazon Basics and Amazon Essentials
  • Debolsillo
  • Motorola Mobility
  • Marques Brownlee
  • TOMS
  • Despegar.com
  • Dell
  • Amazon
  • Moleskine
  • Le Creuset
  • Last week tonight
  • Telegram
  • Walmart
  • Google
  • BMW

Example of comparative advantages

1. Zara

competitive advantageexamplecompetitiveadvantagecomparativazara
Image by Zara

This fashion store chain is a great example of competitive advantage, since, despite the enormous competition it always faces, it is well positioned. This loyalty is due to the fact that it offers quality clothing at affordable prices, in addition to the fact that its designs are sophisticated and ideal.

2. Netflix

Image by Netflix

Netflix may have been the pioneer, but with the growing offer of platforms for streaming series and movies, the competition does not let it sleep so peacefully. Since it became an indispensable product in the lives of millions of people around the world, it has seen the birth of new offers, from channels that have earned their reputation in cable television, such as HBO, to newcomers, such as Hulu.

Even so, Netflix is still one of the most popular. So much so that, despite the fact that some series or movies had already been on the programming bar of other platforms, until they came to Netflix people started talking about them. Two examples of this are Community (which was first uploaded to Prime, without much fuss) or Cobra Kaian original production and YouTube Premium's bid to attract subscribers to its streaming model, which did not carry as much weight until it found a new home in Netflix.

So it looks like, while it doesn't have the advantages of Prime or the award-winning reputation of HBO, Netflix isn't going anywhere.

3. Pepsi

competitive advantageexamplecompetitiveadvantagecomparativeadvantagepepsi
Image by Pepsi

There are two types of people in the world: Coke drinkers and Pepsi drinkers. No matter how much a brand insists on convincing people to opt for it, people are loyal all their lives. And it's not about the quality of its raw material, its social activities, or even its price.

This is a reality, and it is so successful that Pepsi has the luxury of hiring famous celebrities around the world to appear in its advertising, from Madonna or Cindy Crawford to Beyoncé, Sofía Vergara or Messi, which is also the type of message that most appeals to its customers.

4. Amazon Basics and Amazon Essentials

Image by Amazon

Let's talk about the brand of products created by Amazon independently from its streaming service or online sales. Unlike the latter two, Amazon Basics and Amazon Essentials do not seek to become the option for those looking for premium items, but the most reliable option without spending too much.

The design of the various products in this line are not particularly flashy, or too technologically advanced or part of the culture of influencers or celebrities. They are like the free branding of large supermarkets, such as those that exist in Walmart, as they cover a wide range of solutions, such as USB cables, luggage, accessories for pets or the kitchen, stationery or sports.

They are the simple solution, especially when you don't want to invest a lot in it.

5. Debolsillo

Image by Debolsillo

Although it is now part of Penguin Random House, a transnational super conglomerate in the book industry, Debolsillo is a publisher that does not focus on lavishly designed copies. That is, readers will not find hardcover, large-format illustrations or bilingual editions.

It is a good option to acquire translated titles by renowned authors, either within the classic canon (such as Albert Camus) or with recent incursion into the market (such as Svetlana Alexievich), at an affordable price.

6. Motorola Mobility

Motorola, which in 2011 split into two major branches: one oriented to business and the other to electronic communication products (Motorola Mobility), is a Lenovo company that, among others, is distinguished by its affordable personal computers.

In the same spirit, the smartphones produced by the Motorola brand are more practical and accessible than premium or ostentatious. For this reason, a large part of its range is preferred by Android users who do not want to spend too much on devices and who do not want too advanced features. The cameras of their cell phones are efficient, their screens have good definition and a surface similar to the offer that exists in the market, so there will be no lower performance or at an overprice.

7. Marques Brownlee

We include a youtuber in the list because we think that the American Marques Brownlee is a good example of how to reach the level of influencer (in October 2021 he almost reached 15 million subscribers to his channel) without compromising credibility in the reviews. Brownlee's strong point is reviews and content about technology, regardless of the brand: drones, video cameras, smartphones, tablets, electric cars.

The best thing he offers is the honesty of his comments. That is, among all the influencers competing for an audience, he is one of the best at explaining the advantages of a new device, without losing objectivity. If a brand wants them to talk only about the successes of their products, Brownlee may not be the ideal representative, because he has no qualms about mentioning the weak points of an article. So he is a good reference when you have not yet decided to buy a new generation phone or if someone already has the product and wants to be told why it was a good choice.

He also has interviews with opinion leaders (from Obama to Zuckerberg), so he has a good knowledge base.

Examples of differential advantages


Image by TOMS

The famous shoe brand has managed to differentiate itself from its competition not for commercial reasons, but for social ones. Since 2013 it launched its One for One campaign, whereby for every product sold TOMS donates a pair of shoes to underprivileged children in different regions of the world.

In short, it appeals to a large part of today's public, which is increasingly interested in the community value of what it buys and the beneficial impact of the companies it follows.

9. Despegar.com

Image by Despegar

The most popular online travel agency has managed to distinguish itself from its competition with its international travel packages. This is a great competitive advantage, especially in Latin America, where there is a whole developing market.

In addition, thanks to its powerful search engine, people can have a greater margin of decision.

10. Dell

Image by Dell

The multinational technology company bases its competitive advantage on innovation and performance factors, while leaving aside aesthetics, unlike Apple. Its bet has been on ingenuity dedicated to the technical capabilities of its products.

It is also diversifying its market. It not only sells high-performance equipment, known as workstations, but also produces specialized equipment for famous video game players competing in e-sports leagues.

11. Amazon

Image by Amazon

In addition to consolidating itself as a streaming platform with quality content, the company stands out for its free home delivery in its Prime version.

Look at the image that appears on its home page: it speaks to the contemporary family and also uses values of integration, which attracts the public's attention and helps them to identify with it.

12. Moleskine

Image by Moleskine

Anyone can make notebooks, but not all have the reputation of Moleskine. Valued for being part of the tradition of artists like Picasso or writers like Hemingway, it is the brand that separates people who just want to take notes or doodle from those who are about to start a masterpiece, written or graphic.

Moleskine does not make items for school or the office, but for journalists, writers, illustrators, filmmakers, painters, travelers and gourmets. Among their range of products are watercolor sketchbooks, travel journals, notebooks for note-taking or notebooks with boxes as storyboards for the filming of a movie. But it also offers designs inspired by popular culture (Harry Potter or Batman) and others with technology that allows you to take what is written on its pages to a computer.

Therefore, its price is not as affordable as that offered by other notebook manufacturers, and its design is already so recognizable that it does not need to display the brand name.

13. Le Creuset

Image by Le Creuset

Anyone who has kitchenware from this brand knows that not only are they practical, but they also look amazing on the shelves or just sitting there on the stove.

The brand of pots, pans and other food preparation and eating products offers options for those who want to prepare a simple pasta or those who are ready for a baked dessert or a more complicated stew. Originating in Belgium in 1925, Le Creuset was born with a single cast iron pot with enamel on the outside, the hallmark of the brand that others have since imitated. Over time it has added more utensils and its catalog remains the star of the wedding gift table.

14. Last Week Tonight

We want to mention John Oliver's program because, although it is a content created in and for U.S. audiences, it manages to cross borders when it analyzes broader issues. His great leap to worldwide fame began in 2014, when he aired an analysis on FIFA and the World Cup, which touched on the controversies that exist within its administration and its relationship with the governments of the countries that host it every four years.

Video of Last Week Tonight

The mix between news analysis and black humor is not something new on television in that country. However, Last Week Tonight has had its replicas in other countries where HBO (the network where it is aired every week) reaches.

One of the points that distinguishes him from the rest of the political or social commentators that abound on America's nightly magazine shows is that he has a team of researchers who compile relevant materials to back up points of view and commentary. It is not surprising, therefore, that he has 68 awards and more than 70 nominations throughout the 8 seasons it has been on the air.

15. Telegram


Although WhatsApp appeared before Telegram, the latter took advantage of opportunities that the messenger (now owned by Facebook) did not take from the beginning.

Among their coincidences we can mention that both are free, were created primarily for mobile devices, allow you to create as many chats as necessary (group or for two users) and you can exchange different types of files. However, Telegram is the one that seems to be at the forefront, since many of the current WhatsApp functions were already canon in the paper airplane application, such as voice messages and the option to listen to them at different speeds, the sending of reading documents such as PDF or Word, the famous stickers and the search for messages within the application.

In any case, there are advantages that WhatsApp does not yet include, such as the use of the cloud to store all the files sent in a chat: that way, Telegram does not cram the memory of the devices simply by viewing an image, but leaves it in the application if the user does not download it manually. That was one of the reasons why many work teams migrated to Telegram a few years ago (that and WhatsApp's terms of service say that may share user data with third partiesfor example).

Examples of sustainable competitive advantages

16. Walmart

Image by Walmart

Low prices, all the time. This is one of the sustainable competitive advantages that are unlikely to go out of fashion in a consumer-based economy. In addition, Walmart has been able to adapt to changing times. It offers home delivery, an online store, special offers and a schedule that adapts to almost any type of consumer.

17. Google

Image by Google

The management, handling and use of data is a sustainable competitive advantage of the 21st century. Until recently, information was not considered an input. But the digital era has changed the landscape in the business world. Decisions today are based primarily on information. The old paradigm of experience and the nose of business leaders has been replaced by the ability of data analysts to predict and understand changes in the market.

Google has pioneered the use of information to transform the way we relate to the Internet and information.

18. BMW

Image by BMW

BMW maintains an exclusive distribution system. This model consists of a sustainable competitive advantage, since in order to access any of the brand's products, the user must initiate an exclusive purchase cycle. The entire experience is unique, from the moment the store is visited until the purchase is made. BMW dealers must comply with a series of conditions in order to sell any BMW model.

  • Offer
  • Storage
  • Maintenance
  • Technical Service

These are just some of the areas in which distributors must stand out. For all this, BMW has remained in the market as one of the most exclusive and best quality brands.

If you want to differentiate yourself from the competition, it is essential that you analyze what your competitive advantages are and how to enhance them.

Although it is not an easy task, a thorough analysis of your strengths and areas of opportunity will help you know your brand better and distinguish it from the rest.

00d576b9 6c82 4997 b728 3b44f3406e58
image 1

Do you want more information?

Leave us your contact information and a specialist will contact you.

Find out what your competitors are doing in the search results

Find out how your rivals rank in organic and paid search

Follow us on the Networks