I started this book yesterday, and already I’m really liking it. Because it makes things clear. In a way that never quite happened for me when I was at London Business School.

Should I really admit that? Oh well. It’s out there now.

Anyway, two Powers in, and I’m loving the logical and systematic approach to both defining and remembering a strategic power, so you can actually apply it.

In essence a Power creates a sustainable opportunity to charge more for what you do in two ways. First by providing a benefit to the holder, second by creating a barrier to competitors. One of these isn’t enough, you need both to create a Power.

Take the first Power: Economies of Scale:

Netflix’s initial DVD rental business gave them a sizable audience, that stayed with them when they pivoted to streaming. The benefit of this was that funding original and exclusive content was relatively cheap. Certainly cheaper than paying licensing rights for other people’s content. At the same time, after the switch to original content, this low cost per customer became a barrier to entry for other players. Without that customer base, you lose money trying to beat Netflix’s offer, and if you try and squeeze more out the customers you do have, you lose them.

I bought this book for the last Power – Process Power, but I’m going to save that till last.

Meanwhile, I’ll keep you posted.