Competitive advantage: what does this mean for your company?


According to the late American executive Jack Welch: “Number one; Cash is King, number two; communicate, number three, buy or bury the competition”. However, considering the drop in the value of currency globally, we at the OVAC Group are of the view that profit rather than cash is indeed number one. This epitomises the way business ought to operate. So, today, let’s look into what competitive advantage is and what it means for your company.


What is competitive advantage?

A company is said to have competitive advantage when it has the ability to create value using its available resources in order to achieve superior performance when compared to its competitors.


The key words being:

  • Resources - in this context, resources can be anything including cash, manpower, geographic location, tangible assets, brand identity and intellectual properties owned by the company.

  • Value creation - refers to the ability of an organisation to utilise its resources to create or produce goods /services that are desirable by customers or its target market. This is a key aspect of competitive advantage because the consumers must be able to attach value to your product, which will in turn yield higher sales, continuous patronage and increase in market share.

  • Superior performance - is the result achieved from the efficient use of a company’s resources to create value. It is one of the factors that dictates whether the competition can be bought or buried. Superior performance can be in the form of price, location, quality, turnaround, and speed of a certain organisation when compared to its competitors.

How can competitive advantage be achieved?

There is no one generally accepted formula for gaining competitive advantage. This is because each industry has unique factors for determining and measuring competitive advantage. For instance, what works in the aviation industry may not work for the manufacturing or service industry.


However, what is common to all industry is strategy formulation. According to economist and business strategist Michael Porter: “The essence of strategy is that it tells you what not to do”. Each player in any given industry has to draft their own strategy based on the internal and external factors influencing their industry.


Internal factors refer to an organisation’s ability to develop certain competencies that are classified valuable, rare, inimitable and organised resources used in production of its goods and services. Internal factors include employees’ strength, organisational culture, intellectual properties, among others, that give an organisation an edge over its competitors.


External factors refer to things that affect or influence the organisation on industry level. They are also referred to as macro factors, which may be political, economic, social, technological, legal and environmental, also known as the PESTLE framework. Typical external factors are a change in exchange rates, policies, import and export duties, the list goes on.

In summary, the process of achieving competitive advantage may take a longer period for some companies. However, it is important to note that different strategies and processes are involved.


Competitive advantage is the icing on the cake which many organisations strive to achieve. If you or your business is in the process of establishing or refining your strategies to gain competitive advantage, please email us at: enquries@ovacgroup.com for consultation.