Purpose: The purpose of this paper is to critically investigate the discourse on "competitive advantage", a concept that has been widely applied in the public higher education sector, but rarely defined and conceptualised. Design/methodology/approach: In order to get some insightful understanding about how "competitive advantage" is actually manifested in the life and activities of public higher education institutions (PHEIs), it is necessary to obtain data about the perceptions held by education practitioners in different sub-sectors and at various job function levels. In total, 73 interviews at 16 Dutch PHEIs were conducted in the period of 2009-2011. Findings: By studying the diversified meanings, 13 elements were identified in constructing the competitive advantages sought by PHEIs, and, more importantly the significance of each element is rated and ranked. Furthermore, this research discovered that the research universities and universities of applied sciences perceive this concept differently; also, the practitioners holding different job functions gave divergent meanings to this term. The clarification of this container concept "competitive advantage" leads to the conclusion that the business way of defining "competitive advantage" should be critically reviewed and verified in the context of the public higher education sector. Research limitations/implications: This study used just two parameters for the selection of individual respondents: their job function and the length of their working experience. Further studies that adopt different selection parameters are, therefore, encouraged as offering the potential to further enrich our knowledge about how competitive advantage is perceived and put into practice. It is hoped that the findings from this research offer some guidance in developing a framework for such further studies. Practical implications: The sectorial differences revealed by this study can help research universities and universities of applied sciences design their competitive strategies more suitable with their specific characteristics. The job function level differences shown by the research findings can help institutions to identify and close the gaps between the central level and faculty level in their strategic planning and implementation. Originality/value: The clarification of the container concept "competitive advantage" is unique in the current educational management literature, particularly in both qualitative and quantitative ways. The comparisons between two institutional types and two job function levels may help PHEIs to effectively design competitive strategies according to their specific institutional characteristics and by understanding the gaps between the central and faculty level.