Meaning and evidence
A sustainable competitive advantage explains why competitors struggle to reproduce a business’s economics or take its customers. Possible causes include switching costs, a cost advantage or a scarce resource. The brand name itself does not prove such a mechanism. In valuation, the duration of the protection and the return on new investment also matter.[97](#source-cv-value-creation)
An illustrative producer
An illustrative producer may sell at a higher price than competitors, but if it sharply loses volume after raising prices and requires a large advertising budget, the net effect of the advantage remains an open question. The analysis should examine not only price, but also customer retention, support costs and the response of alternative suppliers.
Limits of the label
An advantage does not guarantee unlimited growth or make a share attractive at any price. A protected niche may be small, and a technology may be replaceable. A useful analysis card states the mechanism, observable evidence, maintenance cost and condition that would weaken it. Missing data should not be replaced with a confident label. This is an analytical hypothesis, not an official quality category for a company.