A competitive advantage is anything that gives a business an edge over its competitors.
For example, a local bakery develops a competitive advantage by being the only shop in town offering certified gluten-free products baked in a dedicated allergen-free facility, allowing it to charge premium prices and attract customers that larger competitors cannot serve.
Why it matters: It is the unique edge that allows a business to command higher prices, retain customers, and defend its market share against rivals.
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