[Book Sip] Seven Strategies to Become a Great Company 'Seven Power'

Some sentences encapsulate the entire content of the book itself, while others instantly resonate with the reader's heart, creating a connection with the book. Here, we introduce meaningful sentences excerpted from the book. - Editor's note

The greater the uncertainty, the more questions arise about the value of strategy. The academic understanding of the essence of strategy raises the question of whether it actually influences management practice. The author's answer to this is 'yes.' However, there is a prerequisite: it is the 'prepared thinking' applied in the field. In this context, seven attractive strategic positions that a company can hold are introduced.

Netflix's focus on decisive insight came in 2011, four years after it started its streaming service. Until then, Netflix had been negotiating with content owners (mainly film studios) to obtain streaming rights. However, content owners were very adept at monetizing their assets. They sold streaming rights under different conditions depending on region, release date, contract period, and so on. Netflix's Chief Content Officer Ted Sarandos came to believe that securing exclusive streaming rights for specific content was essential for survival. Finally, Netflix embarked on a radical move. Starting with House of Cards in 2012, it invested major resources into original content.

On the surface, Netflix's move seemed overly bold and risky. Producing original content and owning all rights required much higher costs. Moreover, Netflix had previously attempted original content production through its subsidiary Red Envelopment Entertainment, but the results were poor. Since such forward integration had proven to be a 'too ambitious goal,' original content production was expected to fail again.

_Page 50, Chapter 1 Economies of Scale: Size Matters

This chapter introduces the third type of power: counter-positioning. This is a concept I established to explain competitive dynamics I have often observed as a strategy advisor and stock investor but which people do not fully understand. In fact, counter-positioning is my favorite type of power. It is a concept I researched and developed that stands out for its contrarian thinking. Counter-positioning is a way to beat incumbent companies that seem invincible by conventional measures of competitiveness.

As an example of such competition, let's look at Vanguard's challenge to the active fund market. Vanguard is widely known as a representative company symbolizing low-cost passive index funds and has grown into a global asset management firm through index funds. However, when Vanguard was founded, its founder John C. Bogle faced a completely different world ? one dominated by active asset management.

_Page 85, Chapter 3 Counter-Positioning: Between a Rock and a Hard Place

Written by Hamilton Helmer | Translated by Yu Ji-yeon | HanbitBiz | 304 pages | 18,500 KRW