A differential advantage is a competitive advantage for a firm which sets it apart from other competitors and allows the firm to grow sustainably in its business while gaining market share and earning better profits than the overall industry. This advantage is due to the perceived better quality of products or service that the firm provides or an innate advantage due to the ownership of a resource or its better operational capabilities.
A corporation which truly has a differential advantage is Google. It differentiates itself from other search providers by ensuring its search services are much better, simple for the user and truly understands user requirements. It achieves this by using advanced and proprietary algorithms and technology. Due to these features, it enjoys a very large market share for user searches and as a result can command a premium in its revenue-generating advertisement and other paid services which it offers to marketers. Because of the advanced technology and proprietary algorithms and also the network effect, Google enjoys a competitive differential advantage that is very difficult to imitate and compete against.
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