A competitive advantage is based on the possession of distinctive competencies. By definition, distinctive competencies are: a. resources available to all firms operating in a given industry and easily shared and copied by rivals. b. differences between companies in how they structure their companies and compensate their employees. c. characteristics, skills, or knowledge that cannot be written down and must be understood through experience or intuition. d. firm-specific strengths that allow a company to differentiate its products from rivals or achieve lower costs than rivals.

Competitive advantage refers to the ability of a country or a company to produce a good or service using fewer inputs compared to its rival. The company can manufacture a larger quantity of goods using the same amount of factors of production as others.

Distinctive competencies are unique skills, methods, and practices that increase the competitiveness of a business. They are the specials traits that give an organization an advantage over competitors in producing a particular good or service. Distinctive competence may be core skills, technology, or methodology that competitors cannot replicate easily.