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Difference between competitive advantage and basic competence

Difference between competitive advantage and basic competence

Competitive advantage can be described as something that competing companies are not able to do, or something owned by the company that competing companies want to have. At the other extreme, the basic competence is the distinct competence of the company, which cannot be imitated by its competitors.

The two terms are closely related to each other, as these two help occupy a larger share of the market, satisfy customers, build brand loyalty and provide high quality products to customers.

While the core competency is unique to a particular business entity, competitive advantage can easily be imitated by competitors. The fundamental difference between competitive advantage and basic competence that the basic competence helps to create a continuous competitive advantage and also helps the company to enter new markets.

Comparative graph

Basis for comparisonCompetitive advantage Main competence
Sense Competitive advantage implies virtue, which helps the company achieve better performance than its competitors in the market. Basic competence refers to the skills, knowledge and specific skills that are difficult to be followed by competitors.
Success formula Long term, certainly not a successful formula for a company. This is a sure success formula for a company in the long run.
superiority Provides a temporary competitive superiority to the company. Provides a sustained superiority to the company.
Welcomes from Functional strength Fundamental force
Help in Help the company in a specific and limited way. It helps the company in general, wide-ranging and multi-faceted.
Benefit Provides competitive strength in a particular business or product. It provides excellence in a variety of companies and products.

Definition of competitive advantage

Competitive advantage alludes to a condition, which puts a company in a position favorable to it, that is, one that allows the company to produce products or services at reasonable prices, which are in vogue, for customers. In such a situation, the company can achieve higher profits or generate more revenue than its competitors.

The competitive advantage is something that keeps you one step ahead of the competition. It can be achieved due to certain factors such as product quality, brand, cost structure, customer loyalty and so on.

The three strategies with which a company can gain a competitive advantage, according to Michael Porter, are:

  • Cost leadership strategy
  • Differentiation strategy
  • Focus strategy

Definition of main competence

Basic competence can be defined as the fundamental strength of a company that includes a unique combination of various resources, knowledge and skills, which differentiates a company on the market. the profound dexterity that provides one or more lasting competitive advantages to the company in creating and delivering perceived advantages to customers.

The basic competence is something that provides access to numerous markets, difficult to reach by competitors and must make a considerable contribution, in providing value to customers. It can be acquired from the distinct series of skills or production techniques. It provides a structure to companies, which is useful for ascertaining their main strengths, to strategize accordingly.

Key differences between competitive advantage and main competence

The main differences between Competitive Advantage and Core Competence are indicated below:

  1. Competitive advantage can be understood as the specific feature, which helps the company to overcome its rivals on the market. On the contrary, the basic competence is defined as the combination of capacity and strength, which translates into a competitive advantage.
  2. The competitive advantage does not guarantee the long-term success of the company. On the contrary, basic competence guarantees the long-term success of the company.
  3. Competitive advantage provides a temporary competitive superiority to the company, compared to other companies in the market. Conversely, basic competence provides lasting superiority to the company over its competitors.
  4. The competitive advantage is the result of functional strength, while the basic competence is derived from the basic strength, ie from the fundamental competence for the company or the product, for example a distinct capacity in business processes or technology.
  5. When it comes to impact, the core competence has a far-reaching impact, as it helps the company in general and in a multi-faceted way, while the competitive advantage has a limited and specific impact on the business.
  6. Competitive advantage helps to gain competitive strength in a particular business or product. On the contrary, basic competence helps to achieve excellence in more companies and products.


Basic skills are the main source of competitive advantage and determine the areas that a company must focus on. Help companies identify potential opportunities to add value to customers. On the other hand, competitive advantage helps a company overcome its competitors.