Related literatures about the source of cluster competitive advantage are reviewed. A total of six sourcing factors of cluster competitive advantages are summarized, which are the external scale economy and scope economy, the regional resources, the government function, the reduction of transaction cost, the effect of learning and innovation, and the coordination mechanism of cluster. Development status of wolfberry industrial cluster in Ningxia Hui Autonomous Region of China is studied by using interview, questionnaire and other forms. Existing problems are put forward, including the relatively small processing and marketing enterprises in general, unclear product positioning of enterprise and poor transformation ability, insufficient brand propaganda and lack of a sound marketing network, single investment and financing channel for small and medium-sized enterprises, and poor planting organization of peasant household. Functions of sourcing factors of competitive advantage in Ningxia wolfberry industrial cluster at the formation and growth stages are analyzed, such as regional resources, government function, and scale and scope economy. Source model of competitive advantage of Ningxia wolfberry industrial cluster is constructed and compared with the evolution model of competitive advantage of small and medium-sized enterprises in China. Result shows that there are significant differences between the two due to their building foundations.