I wanna talk powers, but sadly there are no superheroes here.
...Hamilton Helmer's book "7 Powers" refers to the seven key strategies or business models that companies can leverage to achieve and sustain a competitive advantage (spoiler: #5 is my fave).
It provides real-world examples grounded in decades of experience as a strategy advisor, active equity investor, and Stanford University professor that help us build a set of mental models to think through strategy.
The seven powers are:
1 .Scale Economies: This means that as a business grows and produces more, its per-unit cost goes down. No surprise there!
2. Network Economies: This refers to the effect where the value of a product or service increases as more people use it. Social media anyone?
3. Counter-Positioning: A newcomer adopts a new, superior business model that the incumbent does not mimic due to anticipated damage to their existing business. For me, Casper mattresses come to mind.
4. Switching Costs: This is when it's difficult or costly for customers to switch from one product to another.
5. Branding: A strong brand can serve as a powerful moat. Consumers are willing to pay a premium for a brand they trust and recognize.
6. Cornered Resource: This is when a company has exclusive access to a valuable resource. This could be in the form of a patent, a unique location, a talented team, etc.
7. Process Power: When a company develops unique/superior methods of doing things that cannot be easily replicated. These processes can provide a sustainable competitive advantage over time.
Stock photo by Vecteezy