Small and medium-sized enterprises (SMEs) operate in a highly competitive business environment where the ability to create and sustain a competitive advantage is crucial for survival and growth. This paper explores the various strategies that SMEs can use to create and sustain competitive advantage. The chapter begins by defining the concept of competitive advantage and its importance in the SME context. It then examines the different sources of competitive advantage, including cost leadership, differentiation, and focus strategies. The chapter also discusses how SMEs can leverage their resources and capabilities to achieve sustainable competitive advantage. Finally, the chapter looks at the challenges that SMEs face in creating and sustaining competitive advantage and provides recommendations for overcoming these challenges. Overall, this chapter provides insights into the strategies that SMEs can use to compete successfully in today’s dynamic business environment.