Monday, November 9, 2015

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 calls this 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 competitors 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 Competitors Strength And Attack Their Weakness

"An army may be likened to water, for just as flowing water avoids the heights and hastens the low lands, so an army avoids strength and strikes weakness"

The western approach to warfare has spilled over into business competition, leading many companies to launch head-on, direct attacks against their competitors 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 competitors weakness, which maximizes your gain 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"

To find and exploit your competitors 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"

To fully exploit foreknowledge and deception, Sun Tzu states that you must be able to act with gliding soled.  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.

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