Founder's Journal 7 Powers: The Foundations of Business Strategy
9 snips
Mar 4, 2024 Exploring the 7 Powers book on business strategy, with examples from Apple, Netflix, and others. Discussing how companies create competitive advantages and barriers to entry. Exploring switching costs, vendor lock-in, and the influence of brands on business strategies. Unleashing process power and strategic evolution with insights on Netflix's shift to streaming.
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Enduring Business Value
- Hamilton Helmer's "7 Powers" reveals enduring business value comes from strategy and execution.
- Competitive advantage arises from smart strategic choices and operational excellence amidst uncertainty.
Netflix's Scale Economy
- Netflix's shift to original content demonstrates the power of scale economies.
- By owning content, Netflix turned variable costs into fixed costs, unlike Spotify, which still relies on licensed music.
Scale Economies
- Scale economies mean per-unit costs decrease as volume increases, creating a significant advantage.
- This allows businesses like Netflix to spread fixed costs, making it harder for smaller competitors to compete.