Differential Advantage Definition
Differential advantage is the competitive edge that a company has over its rivals. This can be in the form of lower costs, better quality, superior technology, or a combination of these factors. Differential advantage is what allows a company to charge more for its products or services than its competitors.
In order to sustain a differential advantage, a company must continually invest in its capabilities and remain ahead of the competition. This can be a challenge, as rivals are constantly seeking to close the gap. A company’s differential advantage may also erode over time as rivals catch up or new entrants enter the market with their own unique advantages.
