This study attempts to examine the relationship between service quality and students’ satisfaction and determining the competitive advantage dimensions that contribute most to the students’ satisfaction in a private higher education institution in Malaysia. To determine the relationship between service quality and students’ satisfaction, Michael Porter’s theory of competitive advantage was used to analyse the research questions. Through this method, the service quality was examined through three generic strategies of the competitive advantage theory, such as cost leadership, differentiation and focus. The study reveals that there were correlations between service quality and students’ satisfaction. The students were satisfied with the environment and service differentiation strategy used by the institution to enhance its service quality.