05 — A war’s strategy is to “Hold Out Baits” — Sun Tzu
Business too practises a strategy of holding out baits — A telecom service provider gave away free data service for 6 months — Now we are addicted to Online TV shows, HD movies, Video calling and we are ready to pay a small fee so that we could continue the habit. “HABIT” — Most of the product manufacturers/service providers are devising strategies to tap into the user’s habit loop by anchoring the product to a specific trigger.
Pinterest sends an email showing how a friend of mine got benefitted by using their service. You get a free printer but pay for the cartridges. We think we have got Gmail for free. We assume that Super-Retail store memberships are beneficial to us.
06 — In a war, attack your enemy where he is unprepared(Where there is the least resistance) — Sun Tzu
March swiftly to places where we are unexpected — Surprise your enemy. Do not lay siege to the walled cities, Balk the enemy’s plans. In war, if the enemy is of superior strength, evade him.
When P&G launched its Febreze brand — it had to compete against Reckitt Benckiser and SC Johnson in air freshener segment(Bigger brands with deeper pockets) — Fighting them outright would be a disaster and it would be a long battle draining money, energy and time. P&G chose to target an area of least resistance(A market segment competitors would not expect to create an impact) — They targeted Laundry segment — As a Laundry additive that would add a pleasant sensory experience to washed clothes — Women, who after cleaning the clothes, folded them nicely, then sprayed the smooth comforter with a smile. Spraying was a mini-celebration for their work accomplishment — a way of feeling proud of their work. It is like having a sweet or dessert at the end of a spicy dinner. Then, P&G shifted their focus to curtains, later to carpets, next to upholstery, shoes, sports equipment, finally air deodorizer and air freshener.
If your forces are inferior in numbers to your enemy, avoid a direct battle. In all fighting, the direct method may be used for joining the battle, but indirect methods will be needed in order to secure the victory — Sun Tzu
P&G, when they bought a perfumery business, they were completely clueless about fragrance industry. As in the earlier case, P&G did not want to go head-on with the biggest, established players and chose to attack the line of least resistance and least expected — The team targeted men’s fragrance market with Hugo Boss and Sporty youngster’s market through a partnership with Lacoste.
07 — A general who wins a battle makes more calculations, count the costs of men, chariots, other essentials before going for battle — Sun Tzu
Similarly, estimating costs in business correctly is important as it helps everyone be committed to the business. The accuracy of your cost estimation process can make or break your business’s success. The cost estimates provide cushioning for unexpected scenarios that may arise. A business need to understand the cost of Key Activities, Core Capabilities, Key Partners, Key Resources, Proposed Value Propositions, Proposed Customer Relationships, Customer acquisition, Customer Retainership, Inventory, Opportunity, Market Traction, Scaling, Reliability, Sustainable Competitive Advantage, Distribution Channels, time duration before prototyping a product or service.
See the plant before it germinates and grows — Sun Tzu.
08 — Do not fight battles to participate — Fight battles to win — Sun Tzu
Prolonged warfare provides no benefits — Weapons grow duller, too much money will be spent, prices increase, soldiers loose strength over a period of time and the economy weakens. If you fight the battle to win, you won’t hesitate to make decisions and hard choices. If you Fight the battle to participate — you would be defensive, react to situations than being pro-active. You would fail to make any hard choices.
Similarly, companies must go to the market to win and not to participate. Participating is a self-defeating attitude resulting in mediocrity. You would be defensive and fail to make hard choices. GM introduced the brand “Saturn” to capture the newly emerging small car segment for youngsters and after a decade of long battle, the brand was laid to rest. It had some success in the initial years. The problem — GM wanted to participate in the competitive market whereas Toyota and other brands aspired to win the market. GM fought a prolonged battle, losing money, energy, time and brand value. The objective should be victory, not a lengthy campaign.
09 — The general who understands the evils of war can only understand and appreciate the profitability of the war — Sun Tzu
He who understands the negatives of a business strategy, who faced hard times in business would appreciate the positivity & profitability of a business, would value his customers, would respect the good times. We understand our strengths and weaknesses only in times of adversity.
Steve jobs “I have always found is that you have to start with the customer experience and work backwards to the technology. You can’t start with the technology and try to figure out what to sell. I have made this mistake probably more than anybody else. I have got the scars to prove it. So we started with: what incredible benefits can we give to the customer? Where can we take the customer?”
Ben Horowitz says, “When things go wrong, nobody cares. No one is going to step in and rescue you. You need to get real. Spend zero time on what you could have done and to concentrate all of your efforts on finding that one seemingly impossible way out of your current mess”. Hard times had taught Ben Horowitz about decision making, hiring right people, how to be an effective wartime CEO, laying off people who trusted you, building a strong team, mental strength, focus, building the trust, allocating the responsibilities and burden of business, the meaning of business’s existence, priorities, taking care of the people, building a culture and a right behaviour.
When P&G launched Citrus Hill Juice in 1983, Minute Maid and Tropicana fought hard. Both the brands understood that if Citrus Hill was allowed to succeed, then one of them had to leave the market. Though initial market tests showed a huge potential for the product, P&G had to withdraw Citrus Hill from the market after a decade of frustration. A gentle reminder that an advanced technology coupled with a wonderful product alone would not lead to victory P&G learnt the lesson, used this experience later in many of their launches and came out with a better strategy to fight tough competitive dynamics, user behaviours, habits and high capital costs.
10 — He will win whose army is animated by the same spirit throughout all its ranks — Sun Tzu.
To kill the enemy, rouse an emotion in your soldiers — unify them through emotion.
These days, brands do not sell products but sell emotions. To sell emotion, you and your team(Employees) should feel that emotion. Employees of a company act as brand ambassadors. They influence the powerful perception of the brand in the consumer’s mind. Their behaviour can reinforce the brand value, and if it is inconsistent, it will undermine the credibility of the brand. Whatever the brand perception/experience senior management like to create in a user’s mind has to be reflected in their employees. Unify your employees through the required emotion. Speak, act, behave in a unified language.
AVAILABLE ON AMAZON -
Building a Great Business and The ‘Art Of War’ Strategy — Part 01
01 — The war is a matter of life and death, a road either to safety or to ruin — Sun Tzu
Building a Great Business and The ‘Art Of War’ Strategy — Part 03
11 — The clever general looks to the effect of combined energy of the team than individuals — Sun Tzu
Building a Great Business and The ‘Art Of War’ Strategy — Part 04
17 — Be the first to occupy the strategic positional advantage — Sun Tzu
References: The art of war by Sun Tzu and notes by Lionel Giles, Good to great by Jim Collins, Playing to Win by AG Lafley, Wired to Care by Dev Patnaik, What is Strategy by Michael Porter, Blue Ocean Strategy, The hard thing about hard things by Ben Horowitz, Something really new by Denis Hauptly, The power of habit by Charles Duhigg, Strategy that works by Cesare R. Mainardi and Paul Leinwand