Supply chain collaboration is a vital approach to enhance competitive advantage. The main target of the study is to examine the impact of supply chain collaboration on competitive advantage of Textile Company: Bahir Dar textile Share Company in focus. The process of collaboration has many touch points with multiple relation with other company and these relation need to be Collaborate in order to provide better competitive advantage to the company and service to the customer. In the preliminary research, analysis of the current practice related to supply chain collaboration among partners and competitive advantage of BDTSC indicated that problems reordering based on the need of market due to lack of collaboration (trust full long term relation, updated information sharing and sharing risk and reward) with partners (supplier and whole sealer) which leads to Bahir Dar textile share company become uncompetitive in terms of cost, quality, flexibility and innovation which lead this study into the for front. An explanatory research design was employed with a sample of 114 employees through stratified sampling. A questionnaire and interview was used as a research tool for collecting data. Baseline data were captured from some informants and from secondary data. The collected data was analyzed using both descriptive statistics (mean & standard deviation) and inferential statistics (correlation and linear regression). Main findings of the study depicts that, there is positive and significant relationship between supply chain collaboration and competitive advantage. Moreover, dimensions of supply chain collaboration had a significant effect of the company competitive advantage. Finally, the results on the conclusion entails us that the five research questions developed in this study were considerably rated low by the employees which actually indicates the supply chain collaboration and competitiveness of the company is not at the required level of its employees. And also, the study recommends proper, trust full long term relation and sharing risk and reward, with the partners is important to bring effective competitive advantage.