How does a company know when it has a net competitive advantage?

A company recognizes it has a net competitive advantage by analyzing overall competitive strength scores. This process involves assessing its strengths relative to its competitors across various dimensions, such as resources, capabilities, market position, and financial performance. By systematically evaluating these factors, the company can determine its relative performance compared to rivals and understand if it holds a favorable positioning in the market that allows it to achieve superior profits, customer loyalty, or innovative capabilities.

While customer feedback, market share analysis, and product quality evaluations are valuable components of a company's understanding of its competitive standing, they may not provide a comprehensive view. Customer feedback offers insights into satisfaction and preferences but doesn't quantify competitive strength comprehensively. Market share analysis indicates how well a company is performing in the market but doesn't directly assess internal strengths and weaknesses relative to competitors. Product quality evaluations reflect specific attributes of offerings but do not encompass the broader strategic landscape necessary for determining overall competitive strength. Thus, analyzing competitive strength scores provides the most complete picture of a company's competitive advantage.