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Recommended if you run a company.  I'm not sure most artists who wish to sell more art would benefit much from it, although I would recommend the chapter on Branding.

I recently read 7 Powers: The Foundations of Business Strategy by Hamilton Helmer.  Below are my notes.

This is a very interesting book.  The author's premise is that there are seven, and only seven, paths to power available for companies.

The idea reminds me a bit of Warren Buffets assertion that great business build "moats" around themselves.

Upon reflection, my gut says this book is onto something important.  I've been trying to think of other paths, besides these seven, to sustained company power and, so far, haven't come up with any others.

It's worth understanding these ideas and trying to garner power in your own company because, as the author says, "If your business does not have at least one of these seven Power types, then you lack a viable strategy, and you are vulnerable."

The Seven Powers, as I understand them, are as follows:

1.  Scale Economies

Walmart is an example.  They have such enormous scale that they can force lower pricing out of their vendors and undercut any would-be competitors.

2.  Network Economies

This power is familiar to most tech companies.  It's the idea that your product gets more valuable as more people use it.  At some point, "everyone" is using your product so there would be no reason for them to switch to another, possibly superior product....because nobody uses that alternative product.  Facebook is the best example.  Technically superior social networks might come and go, but people don't switch because "all their friends are on Facebook."

3.  Counter-Positioning. 

This power is related to the classic idea of disruption.  It basically means that a newcomer has a superior business model that sucks away customers from the incumbent.  The incumbent can't adopt the new business model without hurting their core business, so tends to wait until it's too late.  The example in the book was Vangard's invention of no-load mutual funds.

4.  Switching Costs. 

The pain of switching to a newer product is too high, so customers keep the old product despite the fact they might want to switch.  The example the author gives is Fortune 500 companies who continue to use SAP even though they dislike it.  They have too much invested in cost and training to disrupt their businesses during the switch. 

5.  Branding. 

This power represents a much more narrow definition of "branding" than the way most marketing people normally define it.  Additionally, only certain types of goods can benefit from the power of branding.  The author claims a powerfully branded product can charge a big premium price because: 1.  The built-up associations with the brand elicit good feelings about the offering, distinct from the objective value of the good.  And 2.  Uncertainty reduction. A customer attains “peace of mind” knowing that the branded product will be as just as expected.  He further claims that a strong brand can only be created over a lengthy period of reinforcing actions - typically spanning years or decades.  The example he cites is Tiffany.  Tiffany can charge nearly double the price for the same diamond ring you can buy at Costco.  The premium price can be charged due to the promise behind the powerful Tiffany brand. 

It occurred to me as I read these 7 powers that "Branding" is the only one that is actually available to artists.

6.  Cornered Resource. 

This power is fairly obvious.  It means your company has access to an critical resource that competitors don't.  An obvious example would be a drug company owning a patent for a particular drug.

7.  Process Power. 

According to the author, this is the rarest power of them all.  This power accrues to a company that has developed a unique process in their business that competitors can't duplicate.  The process must actually provide a measurable advantage to the company over their competitors.  The example given is Toyota and their Toyota Production System (TPS).  Other car companies have tried to duplicate it, but none have been able to.