| No. | Powers | Benefit | Barrier | | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------ | --------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------- | | 1 | **Scale Economies.** A business in which per unit cost declines as production volume increases. | Reduced Cost | Prohibitive cost of market share gains | | 2 | **Network Economies.** The value of a service to each user increases as new users join the network. | Leader can charge higher prices, as their network is more valuable | The unattractive cost of gaining share. How much cheaper do you have to make your network for it to become the preferred choice? | | 3 | **Counter Positioning.** A newcomer adopts a new, superior business model which the incumbent does not mimic due to anticipated damage to their existing business. | New model is superior to incumbent model due to lower costs or higher prices. | Incumbents fail to respond for fear of damaging their core business | | 4 | **Switching Costs.** The value loss expected by a customer that would be incurred from switching to an alternative supplier for additional purchases. | Company with embedded Switching Costs can charge higher prices than competitors. Only adds power to sell additional services to existing customers. | To offer equivalent product, competitors must compensate customers for Switch Costs. | | 5 | **Branding.** The durable attribution of higher value to an objectively identical offering that arises from historic info about the seller | Business with branding is able to charge higher price due to either/both: | Strong branding only possible after long period of reinforcing actions | | 6 | **Cornered Resource.** Preferential access at attractive terms to a coveted asset that can independently enhance value. | Produces uncommonly appealing product | Unacquirable commodity | | 7 | **Process Power.** Embedded company organisation and activity sets which enable lower costs and/or superior product | Enables a company to improve products and/or lower costs as a result of embedded process improvements. | Replicating takes time, depending on complexity & opacity (can we describe what the process even is?) |