⚡Uncover Your Moat: An AI-Powered Way to Analyze Competitive Advantage with the 7 Powers
1️⃣ Real-World Use Case
A strategy team at a mid-size SaaS company is entering a strategic offsite. The CEO wants clarity on what durable advantages the company actually has—and which are fragile. The team needs a fast way to scan strengths (for alignment) and a rigorous way to stress-test assumptions (for investors and the board).
This is exactly where the 7 Powers framework, developed by strategist Hamilton Helmer, becomes valuable. It helps organizations cut through noise by focusing only on structural sources of long-term competitive advantage.
📚 The 7 Powers Framework
The framework defines seven distinct ways companies build durable moats that compound over time:
Scale Economies – unit costs decline as output grows
Network Economies – value increases as more users join
Counter-Positioning – a new model incumbents can’t adopt without self-harm
Switching Costs – friction or risk deters customers from switching
Branding – trust and identity enable pricing power
Cornered Resource – exclusive access to key assets (IP, data, talent)
Process Power – unique operational know-how built over time
👉 The goal: Identify which Powers your business (or a competitor) holds, how strong they are, and what you can do to reinforce them.
2️⃣ Powerful Prompt
🔹 Tier 1: Basic Mode — Fast, Actionable Scan
Role:
You are a strategy advisor analyzing a company’s competitive advantage using the 7 Powers framework.
Context:
The company wants to assess which Powers apply to its business and how strong they are in order to guide strategy and investment decisions.
Task:
Evaluate the presence and strength of each Power. Deliver a snapshot plus a quick-action table.
Inputs:
- Company: [Insert]
- Industry: [Insert]
- Main product/service: [Insert]
- Customers: [Insert]
- Key competitors: [Insert]
Guardrail:
- Only use the information provided. Do not assume or invent facts.
- If data is missing, mark as Insufficient Data.
Output:
Executive Snapshot (≤5 bullets)
- Likely Powers (ranked)
- Time horizon (short/medium/long-term)
- 1–2 quick recommendations
7 Powers Table | Power | Applies? (Y/N) | Strength (High/Med/Low) | Why it matters |
(Copy-paste into ChatGPT, Claude, Gemini; swap the context to fit any domain.)
🔹 Tier 2: Advanced Mode — Evidence-Based Strategy Logic
Role:
You are a strategy advisor specializing in durable competitive advantage.
Context:
The company is preparing a strategic review and needs a rigorous, evidence-based analysis of its long-term moats.
Task:
Apply the 7 Powers framework using only provided inputs. For each Power, reason from evidence, state confidence levels, and identify disconfirmers.
Inputs:
- Company: [Insert]
- Industry: [Insert]
- Main product/service: [Insert]
- Customers: [Insert]
- Key competitors: [Insert]
- Revenue/margin signals (if available)
- Proprietary assets (IP, data, partnerships, processes)
- Company stage (Startup/Growth/Mature)
- Strategic goals
Guardrails:
- Only use provided inputs (or clearly cite external facts)
- Mark Insufficient Data if key input is missing
- Distinguish clearly between:
• Evidence – direct inputs or known facts
• Inference – logical conclusions from data
• Assumption – guesses or unknowns
- Assign a Confidence Level (High/Medium/Low) for each Power
- Add a Disconfirmer: what evidence would falsify or weaken the conclusion
Reasoning Snapshot (for each Power):
- 3–5 logic steps connecting inputs to conclusion
- Key assumptions made
- Alternative explanations considered
- Why this conclusion holds despite uncertainty
Output:
A) Executive Snapshot
- Ranked Powers with fragility risks
- 3 recommendations to build or defend moat
B) 7 Powers Evaluation Table
| Power | Applies? | Strength | Evidence | Reasoning Snapshot | Risks/Disconfirmers | Confidence |
C) Moat-Build Plan (12 months)
- 3–5 initiatives with metrics, each explicitly tied to one Power
(Copy-paste into ChatGPT, Claude, Gemini; swap the context to fit any domain.)
3️⃣ Why It Works (mental-model stack)
7 Powers Framework (Helmer): Codifies structural sources of lasting advantage
First Principles Thinking: Strips advantage down to root drivers, not surface metrics
Second-Order Thinking: Projects durability and compounding effects over time
Bayesian Reasoning: Explicit confidence + disconfirmers prevent strategic overreach
4️⃣ How to Tweak It for Your Org
Enterprise SaaS → emphasize Switching Costs, Process Power, Cornered Resources
Consumer Apps → highlight Network Effects, Branding, Counter-Positioning
Industrial/Manufacturing → prioritize Scale Economies + operational Process Power
Startups → add a “Potential to Build” column for Powers not yet developed
5️⃣ How to Use This in Your Next Session
• When to apply it:
– Annual planning, investor decks, competitor tear-downs, board prep
• What inputs you need:
– Company profile, industry context, customer base, financial/asset signals
• Step-by-step action flow:
– Step 1: Run Basic Mode first (30–60 min) to align on likely advantages
– Step 2: Escalate to Advanced Mode for deeper, evidence-based logic (2–3 hrs)
– Step 3: Use outputs (Executive Snapshot + Tables) directly in decks or workshops
– Step 4: Translate Moat-Build Plan into roadmap/OKRs
• Estimated time:
– Basic ~45 min | Advanced ~2–3 hrs
Think better, frame smarter, decide sharper. – Clarity Prompts team
