What term describes a company’s superior ability at a competitively important activity compared to its rivals?

The term that best describes a company’s superior ability at a competitively important activity compared to its rivals is "distinctive competence." This term emphasizes the unique strengths and capabilities that give a company a competitive edge in the market. Distinctive competence is what sets a firm apart from its competitors, enabling it to perform a certain activity more effectively or efficiently.

Core competence, while similar, refers more broadly to the collective skills and knowledge that provide strategic advantage but may not necessarily be unique to the company. A strategic asset is a resource that contributes to competitiveness, but it does not imply comparison with rivals in terms of superior execution of an activity. Key success factors are essential elements that are necessary for a company to achieve its objectives, but they do not specifically highlight a company’s relative superiority in a particular area compared to its competitors. Hence, distinctive competence is the most precise term for describing a firm's superior capability in a competitive context.