The Most Powerful Paths to Profits
Twelve strategies to shape a company’s destiny.
by Mia de Kuijper
http://www.strategy-business.com/article/09412?pg=all

This is a great summary of the levers one can pull to create sustainable competitive separation. I strongly recommend going to the site for the excellent examples they offer.

"Twelve power nodes will be the most important sources of profit in the
decades to come. Ten of the older nodes are already well-established sources of
leverage.
• Brands. Think of the leverage wielded by McDonald’s, Coke, and
Intel over their suppliers and partners simply because customers are attached to
their names.
• Secret, special, or proprietary ingredients. In 1986, when a
private equity firm acquired the antifreeze maker Prestone from Union Carbide, a
deal was struck allowing Prestone to purchase ethylene glycol from its previous
owner at a confidential low price. Shortly thereafter, the price of this
chemical skyrocketed, owing to refinery accidents and increases in feedstock
prices. Prestone’s reliable inexpensive supply of ethylene glycol ensured that
it retained its profitable position while competitors suffered.
• Regulatory protection. In certain industries, regulators can grant privileges to businesses like hospitals, banks, and nuclear plants; rights to use scarce natural
resources like broadcast frequencies or offshore drilling sites;……..
Essentially, the regulations represent a barrier to entry and limit the number
of competitors a company can have; as a result, the strongest companies in
heavily regulated sectors generally enjoy sustained profitability.
• Focused financial resources. Some companies have innovative means of access to capital that other enterprises cannot duplicate, and that access can be deployed to
exert control over the business environment.
• A customer base with switching costs. Customers don’t like to pay to switch loyalties. T
• A proprietary process or modus operandi. Some companies have unique methods and procedures that guide their people, equipment, or systems.
• Distribution gateways. The Industrial and Commercial Bank of China (ICBC) relies on its distributed network of 18,000 branches and 150 million customers for cheap deposits and growing revenues
• The dominant position in a layer. A layer is a horizontal slice within a
vertical value chain.
• Increasing mutual utility. The larger the existing base of users, the more attractive the product is to potential new customers.
• Filters and brokers. Companies and individuals that could be termed
filters or brokers, a group that includes wine experts, art curators, and real
estate and jewelry appraisers, have influence in situations in which objective
information is hard to obtain or people do not have the time or training to
choose adequately on their own.

A Digital Environment
The 10 power nodes above have been around for a while. But the remaining two power nodes are strikingly novel.
• Aikido assets. This power node is named after the
Japanese martial art that exploits the energy of an opposing force. In the
current information environment, it is no longer useful to “push” advertising
and marketing messages to consumers. Most customers reach out for information
they need on their own
• Hubs. One of the most effective power nodes
imaginable in a transparent economy is the ability to become the beneficiary of
self-reinforcing popularity. Hubs are people or products that attract viewers,
assignments, clients, buyers, or users in part because others are drawn to them
as well. "