Category Archives: Strategy

Car Rental Industry: From Fleet Lessors to Second-Hand Car Producers

September 18, 2025 By in Strategy, Corporate Transformation, Business Model Innovation
This entry is part 2 of 2 in the series Business Model Innovation

Background

For decades, the car rental industry saw itself primarily as a service provider. Cars were simply depreciating assets—bought, used, and eventually sold once their service life was over. Profitability depended on utilization rates, rental pricing, and operational efficiency.

But over time, the industry experienced a profound business model innovation: large rental companies began to see themselves not only as providers of rental services, but also as mass producers of second-hand cars.

This reframing changed the economics of the sector, reshaped supplier relationships, and redefined fleet management practices.

The Strategic Reframe

Old frame:

  • Cars = inputs, depreciating assets.

  • Value derived mainly from maximizing rental days.

  • Resale considered secondary, often after cars had been “sweated” to the end.

New frame:

  • Cars = inventory in a two-stage model: rental + resale.

  • Value derived from lifecycle economics, not just rental income.

  • Resale value became as important as rental utilization.

Continue reading →

Commercial AI: Where the Real Value Will Emerge

August 30, 2025 By in Strategy, Business Model Innovation

 

Much of today’s AI debate is framed as humans versus machines. That framing misses the point. Like the internet and cloud before it, AI will settle into the background as infrastructure. The real commercial opportunity will not be in the raw models themselves but in the systems, trust mechanisms, and legitimacy markets built around them.

1. From Novelty to Infrastructure

Every technology begins as spectacle then sinks into the background. The internet was once a revolution. Today it is assumed infrastructure. Cloud computing went the same way. AI will follow.

The winners will not be those selling “AI” as a standalone product, but those embedding it into workflows. Think of:

  • AWS turning compute into platforms and services.
  • Bloomberg embedding raw data into analytics and trader workflows.
  • SAP integrating processes through ERP systems.

AI will commoditise surface outputs like text or images. The margin will shift to higher-level services that reconfigure compliance, logistics, research, etc.

2. Trust Becomes the Scarce Commodity

When content is cheap to produce then credibility becomes expensive. The internet’s information flood elevated Google, the FT, and The Economist—brands that could filter, signal, and maintain trust.

Continue reading →

Global Hubs & SMEs: From Hosting Giants to Hosting Intelligence

August 29, 2025 By in SME, Strategy, Business Model Innovation
This entry is part 8 of 8 in the series Gen-AI Erodes Business Models

For decades, global financial and commercial centers defined themselves by their ability to host the largest companies. New York, London, Tokyo, and Hong Kong became magnets for multinationals because they provided what those firms needed: access to capital, legal frameworks, professional talent, and international connectivity.

The implicit goal for cities and countries was clear: attract the giants, and the rest of the economy will benefit.

But the rise of generative AI (GAI) challenges this model. If AI truly breaks down the moats that once protected big companies, then the focus of global centers may shift dramatically from hosting giants to hosting intelligence.

Continue reading →

Tariffs, Theatre, and the Cost of Over-Bluffing

August 28, 2025 By in Strategy, Negotiation
This entry is part 3 of 4 in the series Tariffs

America’s tariff strategy in the late 2010s illustrates a classic problem in game theory: over-bluffing. Repeated announcements of new duties, backed by hard deadlines, unsettled trading partners and jolted markets. Yet as deadlines were repeatedly extended, exemptions carved out, or last-minute deals struck, the shock value wore off. What once looked like leverage began to resemble theatre.

The problem is not unique to Washington. In negotiations of all kinds credibility is built on the careful use of uncertainty. A threat or promise must leave the other side unsure enough to adjust. Overuse erodes credibility while failure to vary tactics makes you predictable. Game theory helps clarify why.

As previously explored in The Bluff: An Important Strategy Tool, bluffing is not dishonesty. It is the disciplined use of randomness to keep opponents from exploiting predictability. The poker player who occasionally raises with a weak hand is not lying; they are preserving uncertainty. The executive who withholds their “final price” is not deceiving; they are protecting optionality. Bluffing becomes powerful only when calibrated.

Over-Bluffing: When the Threat Loses Force

In poker over-bluffing occurs when a player raises aggressively with weak hands too often. At first opponents may fold, wary of risk. However, once they recognise the pattern they start calling more frequently. The bluff, over-applied, becomes a liability.

U.S. tariff policy followed the same arc. The first wave of announcements carried real weight, extracting concessions from partners. The cycle of delay and dilution made the pattern obvious. Governments and businesses learned to discount the threats. Over-bluffing had drained credibility, leaving Washington with less room to manoeuvre in later rounds of negotiation.

The lesson: a bluff works because of uncertainty. Once it becomes predictable, it loses all force.

Continue reading →

AI and the Collapse of Business Moats

August 25, 2025 By in Strategy, Business Model Innovation
This entry is part 7 of 8 in the series Gen-AI Erodes Business Models

For decades, the equity value in corporations has rested on their ability to build and defend “moats” — structural barriers that protect profits from competition. These moats have come in many forms: scale, brand, distribution, information asymmetry, and switching costs. They created stability for incumbents and concentrated power in large, bureaucratic organizations.

Generative AI is systematically weakening these barriers. The result is not only business model erosion at the firm level but also a potential reshaping of entire economies.

 

From Scale to Individual Leverage

Scale once justified headcount. Hundreds of analysts, marketers, or designers were needed to sustain output. Now individuals and small teams can harness AI to achieve capacity that rivals entire departments.

  • Example: A two-person startup can now produce marketing campaigns, financial models, and investor presentations that previously required dozens of staff. Indie game developers using AI for art and dialogue design can compete with mid-tier studios that once relied on large teams.

Organisational scale still matters in capital-intensive industries (like manufacturing or energy), but in knowledge work it is becoming far less decisive.

From Information Asymmetry to Commoditised Knowledge

Consulting firms, data vendors, and publishers thrived by owning proprietary insights. AI undermines this advantage by synthesizing public data at scale, surfacing answers once locked inside databases or hidden behind paywalls.

  • Example: Legal AI tools such as Harvey or Casetext can draft briefs and conduct case law research at a fraction of the cost of junior associates, eroding law firms’ advantage in information-heavy tasks. Market research once requiring paid reports from Gartner or McKinsey can increasingly be replicated with AI-driven synthesis.

Knowledge is becoming less about what you own, and more about how you contextualize and apply it.

From Network Effects to Layer Inversion

Platforms like Amazon, YouTube, and Airbnb have long benefited from network effects. The more users and suppliers they attracted, the stronger their position became. Continue reading →

Tariffs, Trade Deficits, and Prosperity Surpluses: Rethinking the U.S. Position in the Global Economy

August 25, 2025 By in Frontier Markets, Strategy, Analysis, Business Model Innovation
This entry is part 2 of 4 in the series Tariffs

Introduction

The debate over tariffs in the United States is often framed around trade imbalances. Successive administrations have argued that persistent deficits in goods — imports consistently exceeding exports — reflect unfair competition and a loss of industrial capacity. This framing positions America as a country being taken advantage of. Yet when the lens is widened beyond bilateral trade flows to the global distribution of income and production a different picture emerges. With only around 5% of the world’s population but roughly 25% of global GDP the United States enjoys a disproportionate share of prosperity. From that perspective the “problem” of trade deficits looks less like evidence of decline and more like a natural by-product of extraordinary privilege.

Tariffs as Fiscal Tools

Tariffs are a fiscal instrument. They raise government revenue by taxing imports, while simultaneously transferring wealth from importers and consumers to the state and, indirectly, to domestic producers who gain from reduced competition. This redistribution is visible and politically attractive. For example the recent U.S. tariff on Mexican tomatoes raised costs for consumers but promised relief for Florida growers.

Economically, however, tariffs act as a negative supply shock. By making imports more expensive they increase consumer prices, disrupt supply chains, and reduce efficiency. They may stimulate some investment in protected sectors but this is often inefficient investment, guided not by comparative advantage but by political shields. Continue reading →

Gen-AI Erodes Business Models: Series Introduction

August 18, 2025 By in Strategy, Business Model Innovation
This entry is part 1 of 8 in the series Gen-AI Erodes Business Models

 

Generative AI is beginning to erode some of the most entrenched business models of the last century. Where traditional competitive moats relied on scale, distribution, information asymmetry, or regulatory capture, AI is flattening those advantages. What once seemed unassailable is now vulnerable.

This series explores how AI is reshaping industries not by incremental efficiency gains, but by dismantling the very structures that created durable equity value in the first place. The common thread: AI collapses barriers to entry, redistributes power, and creates space for small, nimble actors to compete with, or even replace, incumbents.

The Core Thesis

Most legacy business models share a common foundation: they controlled the first step in the customer journey (search, discovery, or access) and extracted value through aggregation. AI undermines this control by allowing consumers and businesses to bypass the gatekeepers and move directly to optimal outcomes.

This shift does more than disrupt individual companies, it also changes the geography of global commerce. Power tilts away from monolithic institutions and toward decentralized ecosystems, where SMEs and independents can thrive on equal footing. Nations and cities that once competed to host multinational headquarters may instead compete to host the AI ecosystems that enable these SMEs worldwide.

Where We’re Going

Upcoming posts will map out how this plays out sector by sector: Continue reading →

Strategic Reframing in Business Negotiation: Lessons from Mexico’s Tomato Export Policy

August 18, 2025 By in Strategy, Negotiation
This entry is part 1 of 4 in the series Tariffs

Background & Context

Since 1996, the Tomato Suspension Agreement regulated Mexican tomato exports to the United States, establishing pricing and quality standards. This arrangement provided stability in a market where Mexico supplied the majority of U.S. winter tomatoes.

In July 2025, the U.S. withdrew from the agreement and imposed a 17% anti-dumping duty on Mexican tomato imports. The move was intended to support domestic growers—particularly in Florida—and was framed around claims of unfair pricing. The duty affected roughly two-thirds of U.S. tomato supply, valued at around $3 billion annually (Reuters, July 14, 2025).

Mexico’s position was immediately challenging. Tomato exports to the U.S. were projected at 1.83 million metric tons in 2025—around 93% of its total exports—and output was expected to fall about 5% in response to the tariff (USDA Foreign Agricultural Service, Aug 2025).

On August 8, 2025, Mexico’s economy and agriculture ministries announced minimum export prices (MEPs) for each tomato variety—for example, $1.70/kg for cherry, $0.88/kg for Roma—aimed at protecting domestic supply and rural livelihoods while also signaling fair-market compliance (Reuters, Aug 10, 2025).

The Strategic Move: Narrative Judo in Action

Mexico’s introduction of MEPs is an example of narrative judo—using the momentum of the other side’s framing to reverse positional disadvantage and redefine the terms of engagement.

Continue reading →

Strategic Planning in Transformations and Turnarounds

January 22, 2020 By in Strategy, Leadership, Corporate Turnaround, Corporate Transformation Tags: , ,
This entry is part 3 of 4 in the series Corporate Transformation

This is the third in a series of articles on corporate transformation, focused on my experience in the GCC. In the first article I developed a framework to define the current state of a company: leader, obsolete, stressed, and distressed. Identifying the current state then allows me to select a strategy type to develop: innovate, transform, transition, and turnaround. In the second article I introduced the first phase of strategic planing, which is the organizational diagnostic. This  first phase determines which of the four states the company is currently in. In this third article I describe the main phase of strategic planning that I use.

Organizational triage

The organizational diagnostic will usually result in identifying some quick wins that will have a material impact on the business. When a company calls in external executive management to manage change there are usually two main reasons:

  1. The existing executive management is competent in its job and just needs support planning and executing change while they continue to run the business; and/or
  2. The existing management cannot or will not effect change.

Which scenario is present will come out during the organizational diagnostic phase. If the second scenario is present it is critical to resolve the issue immediately. This leads to two immediate tactical changes necessary for the development and execution of a transformation / turnaround strategy.

Continue reading →

Corporate Transformation: Organizational Diagnostic

December 3, 2019 By in Strategy, Corporate Transformation
This entry is part 2 of 4 in the series Corporate Transformation

This is the second in a series of articles on corporate transformation, focused on my experience in the GCC. In the first article I developed a framework to define the current state of a company: leader, obsolete, stressed, and distressed. Identifying the current state then allows me to select a strategy type to develop: innovate, transform, transition, and turnaround.

With this framework I have a foundation on which to develop an effective strategy. The first step is to determine which of the four states the company is currently in. The conventional term for this is  organizational diagnostic. Organizational diagnostics are a well studied subject in academia, each major consultancy has its own methods for performing a diagnostic, and great companies will also have  their own methodology. In reviewing these different methodologies I was unable to find one that was effective for the companies that I was involved with, be it as an executive, board director, investor or transformation manager. So I had to develop my own, sometimes using relevant parts of the methodologies developed by others.

Failure of Conventional Organizational Diagnostics

My starting point was understanding the challenges in applying conventional diagnostic tools to companies in the GCC. The common theme is that the GCC has seen several centuries worth of evolution in their economies happening within about a 50 year period. I will touch briefly on a few of these challenges.

Continue reading →