How to build a durable competitive advantage.

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In recent weeks I’ve talked about understanding the PROBLEM you’re trying to solve for your customers, and the ALTERNATIVE SOLUTIONS available to them. Another important aspect of getting your overall strategy right is creating a lasting competitive advantage. Without that, you’ll either muddle along in the middle of the pack (best case) or fail completely (worst case). So let’s talk a bit about a competitive advantage – what is it, how do you build one, and some examples in the marketplace.

What is a (true) competitive advantage?

When I talk to founders and C-suite executives, no one has ever said, “We don’t have any competitive advantage.” Everyone thinks they have an advantage over their competitors in some way. Too often I hear a lot of mumbo jumbo speech that boils down to:

• We’re faster.
• We’re better.
• We’re cheaper.

But are any of these a true competitive advantage?

A true competitive advantage in business is a unique, sustainable attribute or capability that enables a company to outperform its rivals consistently. 

It is not merely about having a good product or temporary cost savings but involves establishing a long-term strategic position that competitors find difficult to replicate or surpass.

At its core, a competitive advantage must deliver superior value to customers while simultaneously allowing the business to operate more efficiently or effectively than its competitors. 

This advantage can take various forms, and we’ll talk about those next. However, what distinguishes a TRUE competitive advantage is its sustainability — how well it can withstand market changes, competitor innovations, and evolving customer preferences.

10 examples of a durable competitive advantage.

Here are ten (10) examples of competitive advantages that companies can possess:

1. Cost Leadership – Walmart maintains consistently low prices through economies of scale, strong supplier relationships, and an efficient logistics network.
2. Product Differentiation – Apple’s products are known for sleek design, seamless integration, and a strong ecosystem, differentiating it from competitors in the tech space.
3. Brand Loyalty and Recognition – Coca-Cola has built a globally recognized brand over decades, resulting in customer loyalty that’s difficult for competitors to match.
4. Proprietary Technology – Tesla’s proprietary battery technology and self-driving software set it apart in the electric vehicle industry.
5. Network Effects – The more users that join Facebook, the more valuable it becomes to each user, creating a self-reinforcing loop that discourages switching.
6. Patents and Intellectual Property – Patents on pharmaceutical drugs give Pfizer temporary monopolies on certain treatments, ensuring high margins and market control.
7. Efficient Supply Chain – Amazon’s fulfillment network and logistics system allow it to offer fast, reliable shipping — giving it an edge in e-commerce.
8. Exclusive Access to Resources – Historically, De Beers controlled a significant portion of the world’s diamond supply, creating a powerful advantage in pricing and distribution.
9. Customer Data and Insights – Google's dominance in search and digital ads comes from access to massive amounts of user data, enabling highly targeted advertising.
10. Corporate Culture and Talent – Netflix’s strong culture of innovation and talent empowerment helps it stay ahead in content creation and technology adoption.

Each of these competitive advantages helps a company defend its market position, improve profitability, or grow faster than competitors.

Neither Rome nor a competitive advantage was built in a day.

Like anything worth doing, gaining a true, durable competitive advantage doesn’t happen overnight. It takes time and a lot of hard work. So the sooner you start identifying your potential competitive advantage, the better. Here’s some thoughts on how to do so…

A true competitive advantage is supported by alignment across the organization. Every department, from product development to marketing to customer service, must contribute coherently toward reinforcing the advantage. Strategic fit and execution discipline are essential; otherwise, the advantage can quickly erode.

Importantly, adaptability is a component of sustainability. Businesses with enduring advantages are those that can anticipate market shifts and reconfigure resources proactively. Amazon, for instance, has maintained an edge by continually investing in innovation and expanding into adjacent markets while maintaining customer obsession and operational efficiency.

The Takeaway.

A true competitive advantage lies in the intersection of unique value creation, operational excellence, and long-term sustainability. It must be embedded deeply within your company’s operations, culture, and strategy — resistant to imitation and flexible enough to evolve in response to change.

What about you? Does your organization have a real competitive advantage? If not, what challenges are you facing? Please comment – I’d love to hear your thoughts.

Thanks,
Tom Myers