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This research will look into competitive advantages of the Croatian wood industry. The paper provides an explanation of potential sources of competitive advantages as well as positive and negative aspects of the selected generic strategies, followed by examples of companies using these strategies. The subject of the research encompasses characteristics, the area and the impact of competitive advantages on the company’s market position and business success. The aim of the paper is to define the term competitive advantage and to bring it into correlation with the wood industry. The methods used in the research include description, compilation and classification, and use of comparative and genetic method to interpret the phenomenon in its origin, i.e. in this case, a competitive advantage in its source, namely in costs or differentiation.