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6 Examples of Relative Advantage

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Relative advantage is a strength as compared to the competition. The following are illustrative examples.


A nation that has a lower opportunity cost in a particular industry relative to other nations. For example, a nation that can produce cranberries at $4 a bag as compared to a nation that produces them at $10 a bag. Another example is a nation that produces shoes that fetch an average price of $110 when another nation's shoes fetch $5 a pair on average.


Business capabilities, talent, knowledge, processes, infrastructure, tools and resources that allow an organization to produce superior results in a particular area. For example, a solar panel manufacturer with the lowest unit cost at a reasonable level of quality.


A product that is viewed as superior by customers such that it commands a premium price and high market share.


A service that fulfills a customer need better than the competition. This can include niche advantages such as a school in Tokyo that has a strong English program relative to all local competition.


In the case of commodity products and services, cost is the primary type of relative advantage and a producer with a lower cost may dominate the market by competing on price.


The relative strengths of individuals in a competitive situation. For example, a job candidate with more industry experience versus a candidate that appears to be more open minded and flexible.
Overview: Relative Advantage
A strength as compared to the competition.
Related Concepts

Competitive Advantage

This is the complete list of articles we have written about competitive advantage.
Absolute Advantage
Bargaining Power
Barriers To Entry
Business Cluster
Business Scale
Business Strengths
Competitive Differentiation
Competitive Parity
Competitive Pressure
Cost Advantage
Cost Innovation
Cost Strategy
Critical Mass
Customer Satisfaction
Digital Maturity
Distinctive Capability
Economic Advantage
Economies Of Density
Economies Of Scale
Economies Of Scope
Experience Economy
Information Advantage
Information Asymmetry
Market Position
Market Power
More With Less
Network Effect
Organizational Culture
Price Leadership
Product Development
Relational Capital
Relative Advantage
Risk Management
Strategic Advantage
Switching Barriers
Switching Costs
Trade Secrets
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Competitive Advantage

A few sources of competitive advantage for businesses.

Market Position

The primary types of market position.


The common types of competitor.

Experience Economy

A definition of experience economy with examples.

Competitive Position

A definition of competitive position with examples.

Switching Costs

A definition of switching costs with examples.

Trade Secrets

A definition of trade secret with examples.

Comparative Advantage

An overview of comparative advantage with examples and comparisons.

Competitive Threat

The common types of competitive threat.

Marketing Economics

A reasonably comprehensive guide to marketing economics.

Bliss Point

An overview of bliss point, a marketing principle.

Rule Of Three

Why three firms usually dominate an industry.

Mere Exposure Effect

An overview of the mere exposure effect.


A list of ways to compete in a crowded market.

Market Saturation

A definition of market saturation with a few examples.

Premiumisation vs Commodization

The difference between premiumisation and commodization.

Consumer Goods

The common types of consumer goods.
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