Bstrategy for dummies

They probably teach you this in business 101 - you need to have a competitive advantage. However, until you dig into the theory, analyze examples, and learn to evaluate companies, 'competitive advantage' will lack meaning.

Getting to the point, I want to give a few examples of good business strategies. First I am listing the 6 types of advantage:
- First mover
- Niche dominance
- Cost lidership
- Product/Service Differentiation
- Market Share
- Government Protection

By heart I am an innovator and I love creative approaches to solving problems. That automatically should tell you that I am a fan of the 'First mover' advantage. It is hard to find a product that stays atop not because it is better but rather because it was first. One such example that comes to my mind is Adobe's Program Flash, that allows you to create animations for the web. Flash is not the only way to achieve those animations and to watch youtube videos. As a matter of fact Silverlight has a better foundation. Yet, Flash came first. Why this matters is that any new technology on the internet has 2 parts: Developer software and player that allows to play the animations. You can make software, but if people do not have preinstalled player built into the browser, no one will ever see what you created. Flash gained such big popularity that now is pretty much the standard technology for animation and even video. Statistics show that over 98% of the internet users have flash player installed on their machines. We as a team that develops highly dynamic and entertainment oriented products were seriously considering whether we should use Silverlight and force people to download the player, or use Flash and have visitor's comfort high. No need to say, Flash won. Adobe currently has almost a monopoly on the market. Their development of the flash system is growing and gaining outside support since it is currently the standard. Their life has become much easier.

The second source of advantage that I am a big fan is the Cost Leadership. As a matter of fact, to take that to extremes, I am a fan of the FREE 'stuff'. One of the greatest minds of the new times and business doings is Chris Anderson. Long time ago he predicted the success of Netflix in a brilliant, brilliant article in Wired magazine named "The Long Tail". If you don't know what that term means, you need a serious catchup with today's business. His newest striking and equally profound article is called "Free! Why $0.00 Is the Future of Business" and explains why companies should be offering products for free. Price definitely is a competitive advantage, and you can see this obvious trend anywhere from the Chinese watches (5 for $10) to Chinese food (fried pork chops for $4? can't beat that). But in my opinion, the pioneer of the free products is Google. An array of extremely good products are now offered to users - Gmail, Maps, Calendar...and a number of others are just the best there is and yet cost $0.00. How is that possible? Well, it turns out that money is not all you can get from the customers. We are just beginning to understand the power of information as the monster Google shades the sun off. Meanwhile, while we remain in misunderstanding of how to price our products, Google continues to develop good products, give them for free, suck out information, make money with it, make more products...