Difference Between Competitive Advantage and Core Competence

What is Competitive Advantage?

An advantage that a company has over its competitors on the basis of its products, services, capabilities or the unique tactics it has to overcome its rivals, is known to be a competitive advantage.

Competitive advantage boosts profit margins and sustains its customers. Keeping the profit margins on track for improvement and bringing more customers into the company marks that the company has a competitive advantage over its rival company.

Simply put, competitive advantage takes the company ahead of its competitors in the market.

Competitive Advantage can be achieved through three major factors. First and foremost, cost leadership makes the company stand out by providing the end products to customers at the lowest possible rates. Increasing the efficiency of the company can boost cost leadership, leading to increase profits.

Differentiation is the second attribute of competitive advantage, it can be gained through providing unique, novel and improved products to its customers. Innovation is the key to staying prominent and profitable in the market

Comprehending the needs of target customers in a better and improvised manner is the third compelling attribute of competitive advantage naming as market segmentation. The success of any business has a large dependency on attaining the target reach.

What is Core Competence?

Any particular experience or skill set differentiating it from other companies marks the core competence of a company. This uniqueness is acquired through a combination of skills, knowledge and resources that a company may have.

Commanding the market through technological potential is the fundamental aspect of core competence. Reaching the far-reach and unthought-of is at the core of core competence. Using the knowledge of technologically advanced skills makes the company core competent in gaining an everlasting advantage over other rival companies. A company must have this basic core competency in the form of accessing a wide market.

The second factor in attaining core competency is consumer benefit. Better products with lower costs can make a company swell up its profits making it difficult the reach other rival companies.

The third factor of core competence is the ability of a company to make its ideas difficult to imitate for its competitors. The benchmark a company has in the form of uniqueness leads to a boost in its profits.

To sum up, core competency includes technology understanding, a skilled workforce, top-notch customer relationship management and an unremarkable supply system.

Difference Between Competitive Advantage and Core Competence

The main difference between competitive advantage and core competency is its specific and unspecific nature.

Competitive advantage can be gained through a particular product or service that a company may sell. While core competence is unspecific owing to the vast use of innovation and a skilled mindset of the workforce, in gaining the outcome.

Competitive advantage is restricted to a particular area or product whereas core competence is widespread.

Comparison Table Between Competitive Advantage and Core Competence

Parameters of ComparisonCompetitive AdvantageCore Competence
StrategiesAdopt three strategies i.e., Cost leadership, differentiation and focusMaximizing innovation via technology and future market research
Success Time FrameNo surety of long-term success. Period or interest basedCompanies enjoy long-term success due to always advancing nature of technologically based expertise
EffectSpecific, targeted and focused on single product business effectWide-spread effect encompassing the company as a whole, revolutionizing all aspects of the company
BenefitsAbility to acquire strength in specific product or businessOverall improvement of the company has long-term benefits to the consumers
Area of ReferenceTargets particularly specified consumer good or businessCombination of variety of skills and strengths


  1. https://www.tandfonline.com/doi/abs/10.3200/joeb.83.2.110-115
  2. https://ieeexplore.ieee.org/abstract/document/985745/