Most companies are either founded on a competitive advantage or can apply certain criteria toward finding their competitive advantage. Much of this can be performed through deduction and a process of elimination. After all, your competitive advantage is, by definition, something your competitors do not have. To find a lasting competitive advantage, look for something that your competitors cannot easily replicate or imitate.
Competitive advantages can be found almost anywhere. Some restaurants thrive because of their location. An airline company might have locked in a low-price fuel contract before prices rose, allowing it to price customers away from other airlines. There are car manufacturers that have better production processes than their competitors. It is possible that Berkshire Hathaway's competitive advantage is perfectly unique: Warren Buffet's mind. Coca-Cola, of course, has that secret recipe and huge brand name recognition. Walmart has enormous economies of scale.
Take the time to look at the differences between your competitor's goods and services and your own. Conduct customer surveys to see why consumers chose your company. It could be that you are able to offer a comparable service at a lower price, in which case it is time to review your processes to determine where you reap cost savings.
Once a potential competitive advantage is identified, find out how rare it is. The easier it is to replicate, the faster competition catches up. Sometimes the competitive advantage is only accessible through a certain target market, with a specific product or service or with a specific location. In these cases, it might be best to focus business strategy toward these areas, highlighting and pressing your advantage. Most companies that are making a profit have a competitive advantage of some kind. After all, something is compelling consumers to do business with them.
Once you find this advantage, focus your company's efforts on heightening it. The goal is to be the very best in your field.