The Physics of Business
posted by John Spacey, May 05, 2011Business 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.
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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