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7 Powers: The Foundations of Business Strategy

Summary

<aside> 💡 This document discusses 7 Powers, a strategic business concept.

• It emphasizes that strategy is essential for developing a "prepared mind" for those on the ground and for maintaining viability and reducing vulnerability.
• It identifies Power as the conditions creating the potential for persistent differential returns.
• Value is defined as the ongoing enterprise value shareholders attribute to the strategically separate business of an individual firm.
• The document discusses the two topics of strategy: Statics (Being There) and Dynamics (Getting There).
• It introduces Scale Economies as a Power, where the per unit cost declines as production volume increases.
• Network Economies is another Power where the value of the service to each customer is enhanced as new customers join the network.
• The concept of Counter-Positioning is introduced, which is a strategy to defeat an incumbent who appears unassailable by conventional wisdom metrics of competitive strength.
• The document highlights that the Benefit and Barrier to Power are crucial, and Counter-Positioning applies to situations where the incumbent does not mimic the upstart due to anticipated damage to their existing business. </aside>

Notes

INTRODUCTION (Location 137)

Strategy serves best not as an analytical redoubt, but rather in developing the “prepared mind” of those on the ground. (Location 144)

If your business does not have at least one of these seven Power types, then you lack a viable strategy, and you are vulnerable. (Location 157)

Strategy: the study of the fundamental determinants of potential business value (Location 186)

Strategy can be usefully separated into two topics: Statics—i.e. “Being There”: what makes Intel’s microprocessor business so durably valuable? Dynamics—i.e. “Getting There”: what developments yielded this attractive state of affairs in the first place? (Location 189)

Power: the set of conditions creating the potential for persistent differential returns (Location 211)

strategy: a route to continuing Power in significant markets (Location 219)