Finding a strategic control points, which if controlled can be leveraged to maximize profits, strengthens company’s market position. Successful, dynamic companies seek these strategic control points and then develop unique capabilities to exploit them. This is done by exerting the control and aligning incentives. Those who are successful in this strategic execution can often extend the advantage across different markets. The success in the world of business depends on the ability to compete in the right space – superior product in the wrong market will not make the company successful. Markets are no longer separated, and competition usually plays out across different markets. Without vertical incentive alignment utilization of strategic control points cannot be implemented. Therefore, it is critical to align incentives of all upstream and downstream stakeholders in company’s value chain, and then to ensure they are compatible with company’s own incentives. By using strategic control points and incentive alignment simultaneously, companies can gain significant competitive advantage that will be directly translated to their financial performance.
Key Takeaways:
- A Strategic Control Point are points that can be used by company’s who have a monopoly on data and can leverage the profit.
- A Vertical Incentive Alignment is when you can align your goals with your customers so that it becomes blatantly obvious that they should do business with you.
- When these two concepts are used in synergy, the profits become very easy because the data allows them to gain control over the market and force customers into their hands.
“Therefore, armed with such data from Google, insurance companies can now better match risk-rate profiles of their customers and charge premiums for drivers who are high-risk.”
Read more: https://www.brandingstrategyinsider.com/leveraging-strategic-control-for-growth/
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