Sustainable competitive advantage: real or claimed? The six-month test

Competitive advantage allows a company to win customers or earn higher margins because it has resources or capabilities that competitors cannot easily match. A sustainable competitive advantage remains difficult to match over time.

Almost any company can list its advantages. Competitive prices, fast delivery, a wide range and a warranty often appear on those lists. They can provide real benefits, but their durability depends on the resources a competitor would need to offer the same thing.

TL;DR. A temporary advantage can be real, but it is worth checking how long you can retain it. Relationships, knowledge and processes that are difficult to reproduce can support a more durable advantage.

Our test starts with a question. If a well-funded competitor decided tomorrow to copy your advantage, could it do so within six months? We use that interval as an internal analytical reference, without treating it as a universal definition or a guarantee of durability. In this article, a “claimed advantage” means one presented as sustainable without sufficient evidence. Passing the test still requires further checks against the market and competitors’ resources.

The article applies the test to three Romanian companies whose audits we have published, using figures from their ANAF financial statements (ANAF is Romania’s tax authority). These cases explore potential advantages in the business model beyond the promises made in the offer.

At the end you will find the 30-minute exercise you can run on the list of your own advantages.

How a fact about the company becomes a sentence on the website is the subject of the article on differentiation and the unique selling proposition. Here, we examine whether the advantage you want to communicate exists and will still exist in two years.

What is a competitive advantage?

A competitive advantage gives customers a reason to choose a company more often or allows it to earn more on each sale. It can lie in costs, products, relationships or the position held in the customer’s mind. Internal cost savings can also increase margins without being visible to the buyer.

Michael Porter separated, in the article “What Is Strategy?”, published in Harvard Business Review in 1996, two things that companies confuse. Operational effectiveness means performing the same activities better than rivals. Strategic positioning means performing different activities, or performing the same activities in different ways.

Porter summed up his conclusion in a single sentence. “Improving operational effectiveness is a necessary part of management, but it is not strategy.” Improving operations helps you remain competitive without securing a distinct market position.

The distinction matters for a company with annual revenue of 5 or 20 million euros, because many of its declared advantages are operational improvements. Faster delivery, better prices and a wider range may result from improving the same activities competitors perform. How easily they can be copied depends on the processes, resources and relationships behind them.

The Institute for Strategy and Competitiveness at Harvard Business School explains, in its material on operational effectiveness versus strategy, why such improvements can spread through a market. Once a company establishes a better practice, rivals tend to copy it.

What separates a real competitive advantage from a claimed one?

A durable advantage may depend on relationships, knowledge or processes that a rival would struggle to reproduce. Assessing its durability means checking the time and resources a competitor would need to deliver the same benefit. Persuasive wording on a website does not answer that question on its own.

The economist Edwin Mansfield measured what imitation actually costs.

Together with Mark Schwartz and Samuel Wagner, he showed in a study published in 1981 in the Economic Journal that imitation costs on average about 65% of the cost of innovating and takes about 70% of the time. Mansfield reports the result in the chapter published by NBER on research and innovation.

The figures show why a new product alone does not secure a lasting advantage. In the cases studied, imitators spent about two thirds of the innovators’ costs and needed about 70% of their time. These averages do not predict the cost of copying your product, but deserve consideration when estimating how long its head start could last.

Another study asked managers directly what protects them. Richard Levin and his colleagues published in 1987, in the Brookings Papers on Economic Activity, the results of a survey on the methods companies use to protect their innovations.

For new processes, average ratings for lead time and learning curves exceeded 4.3 on the study’s scale of 1 to 7 in 80% of the industries studied. Secrecy was considered more effective than patents.

For processes, protection comes largely from what you learned by doing. A competitor can buy the same machine, but it cannot buy the years in which your team learned to use it.

Warren Buffett gave this idea the name that stayed in the vocabulary of investors. In the letter to Berkshire Hathaway shareholders for 2007, he wrote that a truly good business needs a durable “moat” that protects its returns.

In the same letter, Buffett warns about an advantage that requires continuous rebuilding. “A moat that must be continuously rebuilt will eventually be no moat at all.” A low price can become vulnerable if you defend it through repeated discounts without structurally lower costs to support it.

We often talk with founders who are defending their price while costs rise. Energy and raw materials cost more, wages have risen, and customers will not pay more: “Everything costs us more, but the price has no way to follow.” In a period like that, you find out fast how long an advantage built only on price can last.

What are the four criteria of sustainable competitive advantage?

VRIO checks four conditions for a sustainable advantage. A resource must improve the company’s efficiency or effectiveness, be rare and difficult to imitate, and the company must be organized to use it.

The first three criteria come from Jay Barney’s research, published in 1991 in the Journal of Management, together with the absence of equivalent substitutes, and the framework called VRIO later added the condition of organization.

The first criterion asks what the resource contributes. It may improve the product or service offered to customers, but it may also create value through lower costs or better use of capacity. A certification that every supplier holds may be necessary, but it is not rare and therefore does not differentiate.

The third criterion concerns the difficulty of imitation, which we explore through the six-month test. Barney also explained why some resources are difficult to copy.

Some resources come from a history that a rival cannot reproduce. In other cases, the link between a resource and its results is difficult to identify, so competitors do not know exactly what to copy. Complex relationships between people can create another barrier, even if a rival hires people with similar qualifications.

The fourth criterion concerns how the company uses the resource, through processes, responsibilities and decisions that allow it to capture the benefit. An advantage that helps buyers choose should be explained in the offer and sales process. A cost-saving process can support margins even when buyers do not know about it.

Data is a frequent example of an advantage considered hard to imitate. Andrei Hagiu and Julian Wright analyzed this idea in the article “When Data Creates Competitive Advantage”, published in Harvard Business Review in 2020. “In most cases, people grossly overestimate the advantage that data gives.”

Their warning matters for companies that believe a full CRM protects them from competition. Check whether the data improves products, services or operations and whether rivals can obtain similar data elsewhere. Volume alone does not establish an advantage.

At the question highlighted in red, check the resources behind the promise. Price, delivery and range can matter to buyers, but their rarity and the difficulty of matching them need separate assessment.

What do real and claimed advantages look like in Romanian companies?

In the three audits below, promises in the main message were compared with company resources, commercial references and financial results. This information identified potential advantages to investigate without establishing their durability on its own. Each company comes from a different industry.

Cablero, a steel cable manufacturer from Iași, presented itself through “varied range, competitive prices, fast delivery across Romania” and through free shipping on orders above 1,000 lei. A direct competitor, cablu-metalic.ro, already displayed free shipping, at a threshold of 2,500 lei, according to the Cablero positioning audit, made on texts read on September 2, 2026.

A competitor can decide to offer free shipping, but its ability to sustain that offer economically needs checking. Other resources to investigate at Cablero include a production line that, according to the company, produces one metre of cable every 1.6 seconds, and clients it can name publicly, from Groupe Renault, through Dacia Pitești, to UAMT Oradea and Dedeman. The line’s stated capacity does not establish a sustainable advantage on its own.

The project list also included the bridges at Sovata and Crișeni. Contracts with Renault and Dedeman are references that a new competitor would have to earn through its own deliveries. Buying a production line does not automatically secure approval as an automotive supplier.

Hexagon, a distributor of screws and fasteners from Ghiroda, near Timișoara, wrote “Guaranteed quality. 2-year warranty” on its website, according to the Hexagon audit, based on texts read on September 24, 2026. For consumer sales, liability for non-conformity identified within 24 months is set out in Romanian Emergency Ordinance 140/2021, Articles 2, 3 and 9. A consumer is an individual buying outside their professional activity, so this rule does not establish a universal warranty for B2B contracts. Assessing Hexagon’s promise requires comparing its specific terms with applicable obligations and competitors’ offers.

The second declared advantage was official Milwaukee partner status. A direct competitor, Pentagon, also carries Milwaukee power tools, so the brand was not exclusive to Hexagon’s offer. Its presence at Pentagon does not establish identical partner status; the specific benefits of Hexagon’s partnership need separate verification.

Technical knowledge is a potential advantage for Hexagon, described by managing partner Marius Sfîru in a press interview on May 6, 2026. He gave examples of non-conforming parts circulating on the market: screws with a thread angle of 56 degrees instead of 60 and nuts marked class 8 that are in fact class 6.

In our reading, knowing which parts are non-conforming takes years of selection and checking.

The balance sheets filed with ANAF also show an increase in headcount that may represent investment in this knowledge. The team grew from 25 people in 2022 to 49 in 2023 and to 63 in 2025, and net profit in 2025 was 46.94% higher than in 2024, from 5.09 to 7.48 million lei.

The link between hiring, technical knowledge and profit remains a hypothesis from the audit. The accounts cannot establish what caused profit growth or measure how difficult the technical selection process would be to copy.

Therezia, a dairy producer from Mureș, offers an example of a resource that could support a durable advantage. In 2015, the company reported working with more than 1,000 farming families. Our estimate from the Therezia audit, based on data read on September 10, 2026, is about 60 villages in its collection network.

The number itself is not unique: two large competitors, Napolact and Olympus, also report more than 1,000 and more than 1,200 farmers respectively. The hypothesis to investigate concerns collection relationships within that territory and how difficult a rival would find them to reproduce. The audit does not measure the time required or confirm the current size of the network reported in 2015.

The 2025 financial statements show a difference in results without explaining its cause. Therezia had revenue of 84.4 million lei and a net margin of 11.51%, while another dairy producer had revenue of about 176 million lei and a net margin of 4.14%.

The competitor has roughly twice the revenue, but less than half the net profit per leu of sales. Therezia’s net profit doubled since 2023, from 4.7 to 9.7 million lei, in the years when the cumulative profit of the 50 companies in its category, by turnover, fell by 0.3%.

Here too, the explanation through the collection network is our hypothesis, because the balance sheet does not say where the margin comes from. It does fit what Barney’s research says about resources built over time, through relationships that nobody can reproduce quickly.

The right-hand column contains resources that may take time and relationships to build. For both columns, assessment concerns the benefit obtained and the practical difficulty of imitation. Naming a resource does not establish its durability.

How rarely does a competitive advantage last?

A competitive advantage that produces superior performance over the long term is rare, and the research that measured the phenomenon across thousands of companies reaches the same conclusion. Few companies rise above the average of their industry, and even fewer stay there for many years in a row.

Robert Wiggins and Timothy Ruefli studied 6,772 companies from 40 industries, over a period of 25 years, in the article published in 2002 in Organization Science. Only a very small minority had superior economic performance, and the phenomenon persisted very rarely over long periods.

The authors considered their findings most consistent with resource-based theory among the theories compared. The study does not directly demonstrate that any particular resource caused superior performance.

McKinsey reached a close conclusion, with another method. In the analysis “Strategy to beat the odds”, adapted from the 2018 book “Strategy Beyond the Hockey Stick”, the authors tracked the economic profit of more than 2,300 companies.

In the sample studied, 8% of companies in the middle of the economic-profit ranking reached the top 20% within a decade. This is an observed frequency in the study, rather than a probability calculated for an individual company. The second card shows how heavily economic profit is concentrated among the top companies.

In the analysis’s model, a gross margin in the industry’s top 30% was associated with a higher likelihood of moving up through differentiation. This is a finding from that sample, rather than a necessary condition for every company’s success.

These studies cover other markets and company sizes, so their findings do not transfer directly to a Romanian company with 10 million euros in annual revenue. The ANAF statements above allow comparison of results, but net profit differs from economic profit, which also accounts for the cost of capital. A difference in margins does not demonstrate that the same mechanism produced those results.

How is VRIO different from SWOT?

VRIO checks whether the internal resources of a company can support a sustainable competitive advantage, while SWOT lists strengths, weaknesses, opportunities and threats side by side. VRIO answers a precise question, whereas SWOT offers an overview, often without a criterion for ranking.

The practical difference appears in the strengths column, which may include a good price, fast delivery and a dedicated team. VRIO checks whether those qualities are rare and hard to imitate before you treat them as lasting advantages.

That is why we use the tools together. The six-month test helps us assess how durable strengths may be before calling them competitive advantages. The SWOT retains useful resources that other suppliers also have, because those resources still matter to the company’s operations. Our approach is described in the article on SWOT analysis.

On which layers is competitive advantage built?

Competitive advantage is built on the layer of positioning and on the business model, but it is often lost on the lower layers, where it does not reach the offer and the sale.

We assess how the advantage is used across the four layers of our methodology, from L1, performance marketing, to L4, positioning and category, with the AI Brain on L3.

The figure reads from the bottom up, and the red level at the top shows where the problem begins.

L1 · Performance marketing. A campaign promoting free shipping may attract buyers who care strongly about delivery costs. If a competitor offers the same terms, the company needs other reasons for those customers to keep buying from it.

L2 · Revenue and sales process. If the distributor has experience identifying non-conforming parts, the salesperson needs to explain what the team checks and how that helps customers choose the right screws for their project. Buyers can then assess the reduced risk of using non-conforming parts alongside the price per kilogram.

L3 · AI Brain, orchestration. Here the team organizes sources, evidence and rules for using the advantage so internal AI assistants can work with verifiable information. Separately, an external AI assistant searching for suppliers may use public sources it finds. Explaining the advantage in those sources may help it be understood, without guaranteeing that the company appears in an answer.

L4 · Positioning and category. Here you choose the advantage to put at the centre of the offer. The principle we call the defensible business model says that the advantage must be supported by the way the company works, so a competitor cannot copy it with money alone.

The second principle, cognitive ownership, says that the final goal is for the market to think of the company on its own when the need appears. A real advantage is the raw material of cognitive ownership. Without it, positioning remains a promise that a competitor can repeat.

The third principle is the brand as a foundation for growth. Repeated communication about the same advantage can help buyers remember the company and the reason to choose it. The related article on cognitive ownership explores how buyers come to associate an attribute with a company.

How do you test your competitive advantages in 30 minutes?

An initial self-assessment can take about 30 minutes if you have prepared the list of advantages declared in your offer and on your website. Work through the four questions and note the evidence you lack. Checking financial statements, rarity and the difficulty of imitation requires a separate analysis.

The exercise has four steps.

1. Write the list of declared advantages. Take them from the offer, website and sales presentation, keeping the exact wording used.
2. Put each advantage in front of a well-funded competitor. Ask what it would need to do to offer buyers the same benefit, and how long that would take. If it could reproduce the benefit within six months through a purchase or a commercial decision, the advantage fails the durability test proposed here.
3. Look for strengths missing from your messaging. Examine clients you can name, your team’s knowledge, established relationships and production or delivery capacity. These are the areas where the three audits above identified potential advantages.
4. Compare financial results. Compare your margin with that of two competitors using their public financial statements. A consistently higher margin deserves investigation, but does not prove the advantage on its own. Check for differences in products, costs and revenue that might explain the result.

If you find nothing at the third step, you have not yet identified a durable advantage. Continue investigating or decide which benefits you will match and where you will try to build a difference. I discuss the position a company can occupy in the market in the guide to brand positioning.

The place of the advantage in the complete system of the brand, from attribute to verbal identity, is described in the guide to the brand platform.

You can begin a self-assessment with our Romanian-language brand diagnostic, which gives you a score from 0 to 100 in two minutes based on your answers. The score does not directly measure buyers’ perceptions or validate a competitive advantage.

A potential advantage may lie in commercial relationships, technical knowledge or cost-saving processes. Strategic work starts with checking the benefit and the difficulty of imitation, then choosing which resources to keep developing and which reasons matter to buyers.

What founders tell us about competitive advantage

The founders we speak with about advantage come from very different industries, yet the situations they describe repeat. If you recognise yourself in one of them, many others are in the same position.

The first is a market taken from outside. Many founders describe competitors who arrive from far away, sometimes with state support, and whose price they cannot match: “The ones we compete with get help, and we are on our own.” The sentence carries a feeling that the rules are not the same for everyone.

The second is a price that has nowhere left to fall. Some founders tell us: “We cannot compete on price anymore, however hard we try.” Someone who says this is not waiting for a miracle. They want a position in the market they can defend.

The same need runs through all of these situations, a reason to be chosen that does not depend on what others do. The six-month test above checks exactly that, namely which of the advantages you have today a competitor could not buy within half a year.

Frequently asked questions

What is a competitive advantage?

A competitive advantage gives customers a reason to choose a company more often or allows it to earn more on each sale. It may influence buyers’ choices or reduce costs and increase margins without being visible to the customer.

What are the four criteria of sustainable competitive advantage?

The four criteria form the VRIO framework. The first three draw on Jay Barney’s 1991 research, and organization was added later. A resource must improve the company’s efficiency or effectiveness, be rare and difficult to imitate, and the company must be organized to use it. A common resource can remain useful for years without supporting a sustainable competitive advantage on its own.

How do you identify a company’s competitive advantage?

Start with the declared advantages and use the six-month test as an internal analytical reference. Then examine clients you can name publicly, your team’s knowledge, established relationships and production or delivery capacity. Public financial statements can show differences in results worth investigating, without establishing the source of an advantage.

Can you give me an example of a sustainable competitive advantage?

A potential Romanian example is Therezia’s collection network in Mureș. In 2015, the company reported working with more than 1,000 farming families. Its durability requires verification of current relationships and the difficulty of reproducing them. Even if we assume a competitor builds a factory in two years, it still needs to establish the collection relationships required in that territory.

Can a low price be a competitive advantage?

A low price can support a durable competitive advantage when it rests on structurally lower costs that rivals cannot easily match. A discount without that support is easier to copy and may force the company to sacrifice margin to defend its price on every quote.