A sustainable competitive advantage is an advantage in providing value to customers without it being able to be imitated.

Numerous cases abound where the first mover in a market develops a competitive advantage, but soon loses it. AOL had a competitive advantage as an Internet Service Provider (ISP) in the 1990s, as one of the preferred providers to consumers new to the internet. It offered more features in one easy-to-use platform. Some customers used "AOL Keywords" to search just as much as they used Yahoo and Altavista to search. Yet, as customers became more sophisticated and as competing ISPs developed cheaper substitutes (e.g. Netzero, Earthlink). Clearly, it is difficult to sustain a sustainable competitive advantage because ones a product or services is made other competitors can reverse engineer and benchmark.

Managers can build sustainable advantages out of the following:

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