Bandan | Productify🚀

Bandan | Productify🚀

22-07-2022

18:45

🚀Strategy 101 If you're a Product Manager, business leader or an entrepreneur You should not miss out on the "7 Powers" 🔥 (by Hamilton Helmer) that are key to unlock true value Since you're short on time, here are 7 powers explained in <5 mins 🧵

Before we begin, Hamilton describes strategy as "a route to continuing Power in significant markets".... but what is meaning of Power here? Power: Set of conditions that create persistent differential returns So let us look at 7 Powers/ 7 conditions ...

1/ Network Economies A business that leverages network economies sees the value realized by a customer increase as the installed base increases. Allows you to: Charge higher for higher value

2/ Scaled Economies A business that leverages scale economies sees their per unit cost decline as production volume increases Allows you to: decrease costs and help increase margins Example: Intel having reduced manufacturing costs for chips vs AMD

3/ Counter Positioning A business that leverages counter-positioning adopts a new, superior business model which the incumbent does not mimic due to anticipated damage to their existing business. Allows you to: Both charge higher or reduce costs Example: Netflix vs Blockbuster

4/ Process Power A business that leverages process power has embedded company organization and activity sets which enable lower costs and/or superior product and which can be matched only by an extended commitment. Allows you to: Both charge higher or reduce costs (Depends)

Example: Toyota vs other manufacturers

5/ Switching Costs A business that leverages switching costs causes their customers to incur a value loss from switching to an alternate supplier. Allows you to: Charge higher because it is difficult to switch Example: Apple 's ecosystem is hard to leave

6/ Branding A business that leverages branding enjoys a higher perceived value to an objectively identical offering that arises from historical information about the seller. Allows you to: Charge higher because of higher perceived value Ex. Tiffany's / Apple

7/ Cornered Resource A business that leverages a cornered resource has preferential access at attractive terms to a coveted asset that can independently enhanced value. Allows you to reduce the cost required to otherwise acquire the resources Example: Pixar's Talent

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