Technology Enabled vs. Pure Technology Businesses

The distinction lies in whether the incumbent's value can be replaced by a technology product or a technology-enabled product. Technology-enabled businesses like Redfin utilize technology to enhance traditional processes, while pure technology businesses like Netflix provide unique digital services. Incumbents can compete with technology-enabled businesses as they can adopt technology easily. However, when facing pure technology businesses, which offer a unique technological value proposition, the challenge becomes inevitable. To assess a company's power, it is essential to evaluate its position against all types of competitors - existing, potential, direct, and functional. Counter positioning alone does not ensure durability as competitors can mimic strategies. Having multiple sources of power, along with counter positioning, is crucial for sustained success, especially when potential competitors like Amazon, Microsoft, or Google enter the market with vertical integration plays.