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The Physics of Business

        posted by , May 05, 2011

Business Strategy is often filled with abstract concepts and trendy words: competitive advantage, value proposition, core competency, efficiency, optimization, best of breed, best practices, social media marketing etc ... All important concepts — however, it is important to validate strategy against business fundamentals.

The Physics of Business

All science is either physics or stamp collecting.
~ Ernest Rutherford

The physics of business are the fundamental laws of the business universe. All other business concepts can be explained in terms of 3 dimensions: revenue, cost and customer experience.

business physics

Will Your Strategy Fly?

When business strategies and goals are validated using abstract concepts there is always a risk the strategy won't fly in the real world.

For example, consider competitive advantage: an important business concept that is often used to support business cases. But what does it mean to say that a initiative will enhance competitive advantage? Competitive advantage must reduce costs, increase revenue or enhance customer experience — this is often forgotten.

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Sustainable competitive advantage is another animal. It's an advantage that keeps going for many years or decades. Ideally, forever.

How to make your product stand out in a crowded market.

Superior customer service is easiest and cheapest way to build competitive advantage.

Measuring your competitive advantage and disadvantage.


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