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|Business In League With Competitors- Applying The Art Of War by imamabi(m): 3:36pm On Sep 14|
Six Principles of Sun Tzu & the Art of Business
1) Capture your market without destroying it
“Generally in war, the best policy is to take a state intact; to ruin it is inferior to this….For to win one hundred victories in one hundred battles is not the acme of skill. To subdue the enemy without fighting is the acme of skill.” Sun Tzu
Sun Tzu calls this the need to “win-all-without-fighting”. Since the goal of your business is to survive and prosper, you must capture your market. However, you must do so in such a way that your market is not destroyed in the process. A company can do this in several ways, such as attacking parts of the market that are under-served or by using subtle, indirect, and low-key approach that will not draw a competitor’s attention or response. What should be avoided at all costs is a price-war. Research has shown that price attacks draw the quickest and most aggressive responses from competitors, as well as leaving the market drained of profits.
2) Avoid your competitor’s strength, and attack their weakness
“An army may be likened to water, for just as flowing water avoids the heights and hastens to the lowlands, so an army avoids strength and strikes weakness.” Sun Tzu
The Western approach to warfare has spilled over into business competition, leading many companies to launch head-on, direct attacks against their competitor’s strongest point. This approach to business strategy leads to battles of attrition, which end up being very costly for everyone involved. Instead, you should focus on the competition’s weakness, which maximizes your gains while minimizing the use of resources. This, by definition, increases profits.
3) Use foreknowledge & deception to maximize the power of business intelligence.
“Know the enemy and know yourself; in a hundred battles you will never be in peril” Sun Tzu
To find and exploit your competitor’s weakness requires a deep understanding of their executives’ strategy, capabilities, thoughts and desires, as well as similar depth of knowledge of your own strengths and weaknesses. It is also important to understand the overall competitive and industry trends occurring around you in order to have a feel for the “terrain” on which you will do battle. Conversely, to keep your competitor from utilizing this strategy against you, it is critical to mask your plans and keep them secret.
4) Use speed and preparation to swiftly overcome the competition.
“To rely on rustics and not prepare is the greatest of crimes; to be prepared beforehand for any contingency is the greatest of virtues.” Sun Tzu
To fully exploit foreknowledge and deception, Sun Tzu states that you must be able to act with blinding speed. To move with speed does not mean that you do things hastily. In reality, speed requires much preparation. Reducing the time it takes your company to make decisions, develop products and service customers is critical. To think through and understand potential competitive reactions to your attacks is essential as well.
5) Use alliances and strategic control points in the industry to “shape” your opponents and make them conform to your will.
“Therefore, those skilled in war bring the enemy to the field of battle and are not brought there by him.” Sun Tzu
“Shaping you competition” means changing the rules of contest and making the competition conform to your desires and your actions. It means taking control of the situation away from your competitor and putting it in your own hands. One way of doing so is through the skillful use of alliances. By building a strong web of alliances, the moves of your competitors can be limited. Also, by controlling key strategic points in your industry, you will be able to call the tune to which your competitors dance.
6) Develop your character as a leader to maximize the potential of your employees.
“When one treats people with benevolence, justice and righteousness, and reposes confidence in them, the army will be united in mind and all will be happy to serve their leaders.” Sun Tzu
It takes a special kind of leader to implement these strategic concepts and maximize the tremendous potential of employees. Sun Tzu describes the many traits of the preferred type of leader. The leader should be wise, sincere, humane, courageous, and strict. Leaders must also always be “first in the toils and fatigues of the army”, putting their needs behind those of their troops. It is leaders with character that get the most out of their employees.
These principles have been utilized throughout time in both the military arena and the business world to build creative strategies and achieve lasting success. If you use them properly, they will bring you success as well.
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