Simple rules: three logics of value creation

As simple rules Donald Sull, Associate Professor of Management Practice in Strategic and International Management talks about three logics of value creation. He is explaining about dealing with the complexity of the world with simple strategies. He gave the definition of strategy in three simple words, ie strategy is to create capture and sustain. First approach of strategy is value creation through position, identify the attractive market, stake out a position in that market built high barriers to entry so that your competitors are kept away and try to create value he gave an example of military strategy ie to find a high hill and build a fortress around it and keep all the equipment’s ready for use. Second is resource approach to value creation, it is about having our own resources and these resources should be rare, valuable because people pay more for any premium products and your product should be difficult to imitate. If you have such a resources that has all these values as mentioned above, it is very difficult for your competitor to grab the value of the resources you have. Third is opportunity logic of value creation here it is seeing a gap in the world market and identifying the customers and assemble all the resources to remove the gap in the world market here you are not keeping any resources but you are managing the uncertainty of the gap filling the gap. You take only what is left over after paying out for all the resources. This approach of opportunity is very interesting for many managers who are underdogs who have not resources left over, it bring about and is the best approach for volatile and fats moving market.