Lecture 3: Seven powers

 7 powers of business strategies (H. H.) 

1. Scale of economy (the more units it sells, the lower cost per unit) 
2. Counterpositioning
3. Switching cost (nVidia， Windows, Word)(difficult to switch because fewer users in new services, learning curves)
4. Network effects (the more people use it, the more valuable it becomes.) ( fax, internet, Uber, Foodpanda, Apple)
5. Processing power (Toyota, TSMC)
6. Branding 
7. Cornered resources (Google search, ASML, De Beers)

Example of Counter positioning 

• Price positioning (low price grocery, Costco, appliance, 85 coffee)
• Quality positioning (Japanese cars, Starbucks, DTF)
• Function and other positioning (EV, fold phone, intuitive phone, Dyson, MUJI, UNQL)

What does a brand stand for?

• Trust
• Expectations 
• Service level
• Token (LV, Burberry…)

Example of Cornered resources 

Google search engine

PageRank algorithm

161 million links, 45 iterations 

322 million links, 52 iterations

Log(n) computational complexity 

Solve for Eigenvalue 

Word of mouth