This week’s podcast is on the well-known 7 Powers framework by Hamilton Helmer. I go through some of its limitations and where I think it works best.
Hamilton Helmer’s fundamental equation for value creation and capture
Value = M0*g*s*m = market scale * power
- M0 is market size at time zero. This is about targeting big and growing market opportunities.
- S is long-term persistent market share.
- m is long term persistent margins (operational margins after cost of capital).
Hamilton Helmer’s 7 Powers:
- Scale Economies
- Network Economies
- Counter Positioning
- Switching Costs
- Cornered Resource
- Process Power
From the Concept Library, concepts for this article are:
- 7 Powers
- Competitive Advantage
- 4 Terrains and Strategies (BCG): Predictable vs. Malleable
- SMILE Marathon
From the Company Library, companies for this article are:
- 35: Competitive Advantage
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