01
Pick where you win before you optimize how you run.
Operations choices create an edge only when they fit one way to compete: cost, quality, availability or new-product speed. Cut cost everywhere and you’re mediocre on every axis.
In practice: Strongest when you can truly choose how to compete. Re-check when the market shifts.
Operations Strategy · MIT 15.769 · fall 2010
02
Creating value and capturing it are 2 problems. Solve both.
Valuable work can still make you no money. The value flows to your platform, a copycat or the bottleneck supplier. Capture depends on how protected it is.
In practice: Weakest where copying is easy or a partner stands between you and the customer.
Technology Strategy · MIT 15.912 · fall 2008
03
Where you sit in the value chain beats how good you are.
Value moves along a chain over time, and the big returns gather at the scarce link: a standard, a platform, a bottleneck. You can excel at a cheapening step while profit moves next door.
In practice: It’s a tendency, not a law. Confirm the shift first.
Technology Strategy · MIT 15.912 · fall 2008 · Operations Strategy · MIT 15.769 · fall 2010
04
In network markets, adoption can beat a better product.
When a product gains value as more people use it, early adoption compounds. You choose: open the standard and share a bigger pie, or keep it closed and capture more.
In practice: Only where value grows with users, not for a local service.
Technology Strategy · MIT 15.912 · fall 2008
05
Durable advantage is usually worse before better, carried by trust.
Trust, inside the firm and with partners, lets you make bets that lower results before they pay off. Built from cases like Toyota and Southwest.
In practice: Most relevant when you build over years. Short on cash? The near-term win may be right.
Advanced Strategy · MIT 15.963 · spring 2008 (Prof. Rebecca Henderson)
06
Before any structure decision: all parties, all taxes, all costs.
A 3-lens filter for entity, pay and financing choices. Count every party: their tax differences hold the opportunity. A tax is one cost among many, so never minimize it alone.
In practice: Not tax advice: the 2002 rates are dated. The lenses also fit pricing and partner terms.
Taxes and Business Strategy · MIT 15.518 · fall 2002
07
When buyers can’t judge quality, design for trust and selection.
Your offer decides who it attracts and how they act. Price and guarantees sort your customers, not only margin. Reputation is a core asset.
In practice: Strongest in high-stakes sales. Use defaults and framing only to lower real uncertainty.
Consumer Finance · MIT 15.483 · spring 2018 · Strategy and Information · MIT 14.16 · spring 2016
08
Early strategy: win customers for less than they’re worth, repeatably.
Unit economics: what a customer costs to win, against what they earn over time. Size the market, then prove the math before you spend big. Win at a loss and the business is upside down.
In practice: Early numbers are thin, so test cheaply. A great cost on 10 customers can collapse at 1,000.
New Enterprises · MIT 15.390 · spring 2013 (Bill Aulet, Howard Anderson & Prof. Matt Marx)