Competitive advantage refers to factors that allow a company to produce goods or services better or more cheaply than competitors. These factors generate more sales and superior margins. Competitive advantages come from various sources like cost structure, branding, quality, distribution network, intellectual property, and customer service. They allow companies to achieve higher profits compared to rivals and generate value. A competitive advantage distinguishes a business and makes customers prefer its products over others. The document then provides Apple as an example, discussing how Apple leverages intellectual property strategically to maintain advantages like product differentiation, legal defense of its position, market dominance, and encouragement of ongoing innovation.

1. © 2020 CEIPI, Strasbourg, Prof. Dr. Alexander J. Wurzer
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IP Strategy Development
Competitive advantage
Theory
What is Competitive Advantage?
 In a simple definition; it refers to factors that allow a company to produce goods or services better or more cheaply than its rivals.
These factors allow the productive entity to generate more sales with superior margins compared to its market rivals. Competitive
advantages are attributed to a variety of factors including cost structure, branding, the quality of product offerings, the distribution
network, intellectual property, and customer service.
 Competitive advantages allow a company to achieve superior margins compared to its competition, and to generate value for the
company and its shareholders.
 A competitive advantage is simply a factor that distinguishes a business from others and makes customers more likely to choose its
products over the competition.
 A competitive advantage allows the company can create value for its customers which other competitors are not provide in their
products and services portfolios. This may be lower costs, faster service, better customer service, a more convenient location, higher
quality, or other factors.
Competitive
analysis
Types of
competitive
advantage;
Developing
objectives for
strategies;
General model of
competitive
advantages;
How to achieved
the competitive
advantages?
Topics

2. © 2020 CEIPI, Strasbourg, Prof. Dr. Alexander J. Wurzer
Page 2 of 13
IP Strategy Development
Competitive advantage
Industry Practice
Example: What is Competitive Advantage?
The market example is Apple Inc. - Protecting Design and User Experience. As Apple Inc. is known for its innovative
products, including the iPhone, iPad, and MacBook. One of Apple's key competitive advantages is its ability to create
products with a unique design and user experience. This Example focuses on how Apple strategically leveraged IP to
maintain a competitive edge.
Application of Competitive Advantage:
Apple's IP strategy has enabled the company to maintain a competitive advantage in several ways:
•Product Differentiation By patenting its unique designs and innovative features, Apple can differentiate its products from
competitors. This differentiation attracts consumers who value design and user experience, contributing to Apple's brand
loyalty and market share.
•Legal Defense When competitors attempt to imitate Apple's products, Apple can take legal action to protect its intellectual
property. High-profile legal battles, such as the one against Samsung for patent infringement, have demonstrated Apple's
commitment to defending its competitive advantage.
•Market Dominance The protection of its IP has allowed Apple to maintain a dominant position in the premium smartphone
and tablet markets. This dominance translates into higher profit margins and significant market share.
•Innovation Encouragement: Knowing that their IP is well-protected, Apple's engineers and designers are encouraged to
continue innovating without fear of immediate replication by competitors. This ongoing innovation cycle sustains their
competitive advantage.