Why some businesses win: competitive advantage and the economics of strategy
What a fading advantage is worth
The prompt
Illustrative numbers, fictional company. A card payment company in Poland earns PLN 50 million a year of economic profit (profit above the cost of capital). It comes from its merchant network. A new instant payment system, free for shops, is arriving. The team expects the economic profit to fall 20 percent each year from next year. How much economic profit will it earn over five years, and how much less is that than if nothing changed?
Before you reveal anything, plan your own structure and first move on paper. Then reveal one part at a time and compare.