Britain's higher education institutions (HEIs) face fundamental and unprecedented competitive pressures due to lower government funding (Cm 5735, "The Future of Higher Education," Department for Education and Skills, 2003) and a government agenda focused on a "widening participation agenda". We employ the resource-based view (RBV) of strategy development to explore potential coping strategies. The RBV has not previously been applied to HEIs, partly because of limited relevant strategic data. The paper explores whether or not universities possess sustainable competitive advantages and concludes that they do, particularly knowledge-based, reputational, innovative and architectural related advantages. Further research is proposed into the competitive advantages of individual HEIs. The paper argues that a resource-based perspective could provide new and valuable insights for strategy development at UK universities and that these same principles can be applied in other parts of the world.