Competition sun tze_v.imp

Competition sun tze_v.imp

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  Achieving marketing successthrough Sun Tze’s Art of Warfare Samuel K. Ho Department of Corporate Strategy, De Montfort University, Leicester, UK Amy S.F. Choi Department of Corporate Strategy, De Montfort University, Leicester, UK Explores Sun Tze’s Art of 2 Interpretation with examples. Most of this Warfare, a set of 2,300-year- Introduction literature has reorganized the 13 chapters old Chinese military strate- Sun Tze was a great military leader and war- under different headings which include gies which have been found to fare genius in China. He was born during the strategic management, human resources be analogous to some con- Warring States Period (473-211BC). Different management, finance management and temporary business strate- state commanders (seven of them in total) information management (Cheung, 1990). gies on competition. Uses a were battling among themselves for the king- Some of the literature is divided into dif- systematic approach to ship of China. Sun Tze wrote an extraordi- ferent processes such as decision-making develop a model through Sun nary military treaty, the Art of Warfare, process, production management process Tze’s Art of Warfare for busi- which consisted of 13 chapters and used only and sales process (Lee et al., 1995). How- nesses to achieve success 5,600 words to exhibit the secrets of success ever, much of it remains still at early against competition. Develops on the battlefield. The 13 chapters were: stages of development and further valida- a “winning model” which provides a structured frame- • Chapter I. Laying a plan. tions are required. work for the successful • Chapter II. Waging a war. 3 Management tools developed through Sun deployment of Sun Tze’s idea • Chapter III. Offensive strategy . Tze’s ideas. These are practical and ideal in businesses. Uses some • Chapter IV Power of defence. . packages for management to employ since mini-cases to illustrate the • Chapter V Energy . . they are normally developed into models applications of the model and • Chapter VI. Opportunism. or frameworks which provide step-by-step a hypothetical case “Entering • Chapter VII. Manoeuvring. procedures for achieving success in busi- into a new market” to demon- • Chapter VIII. The tactical variation. ness. This approach takes into account the strate step-by-step how to • Chapter IX. Marches. parallels and similarities which exist formulate winning strategies • Chapter X. Terrain. between the Art of Warfare and business by using the model. • Chapter XI. The nine situation. practices (Yuan, 1991). Unfortunately, liter- • Chapter XII. Attack by fire. ature in this category is extremely limited • Chapter XIII. Use of spies. and usually not tested with Western busi- His book has been used widely in China ever ness practices. This presents barriers for since by strategists and emperors, and Western management to effectively imple- numerous warfare successes have been ment such methods. achieved by those who followed his strategies. Similarity and differences with Western business strategies Contemporary literature on Sun Davidson (1987) in his book on offensive mar- Tze keting mentioned that adopting offensive The literature available on Sun Tze’s teaching marketing can make the switch from losing to is still very limited. Various piecemeal exam- winning. He used POISE (profitable, offen- ples have been used to illustrate the potential sive, integrated, strategy and effectively exe- of the Art of Warfare in business. Broadly cuted) to elaborate the elements for carrying speaking, the existing literature can be classi- out offensive marketing which has been fied into three main categories. They are: found to have many similarities with Sun 1 Direct translation. Those researchers who Tze’s Art of Warfare. Their similarities are directly translate the 13 chapters of Sun summarized in Table I. Tze from Chinese to English. Some of these Since Sun Tze’s Art of Warfare is a treatise works are in cartoon form and others are designed originally for warfare strategies, it Marketing Intelligence & Planning in simple English (Chung, 1991; Lip, obviously has some distinctions when com- 15/1 [1997] 38–47 1989).They are easy to understand but lack pared with current Western business strate- © MCB University Press the full exploration of the spirit of the Art gic theories. The major differences are [ISSN 0263-4503] of Warfare on business applications. summarized in Table II. [ 38 ]
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  Samuel K. Hoand Table I Amy S.F. Choi Similarities between Davidson (1987) and Sun Tze’s ideas Achieving marketing success through Sun Tze’s Art of Huge Davidson – offensive marketing (POISE) Sun Tze – Art of Warfare Warfare Profitable Offensive strategy Marketing Intelligence & Proper balance between firm’s needs for profit and Aim of warfare is not only for winning but also for profit Planning 15/1 [1997] 38–47 consumer’s need for value Offensive Opportunism Must lead the market and make competitors followers Those who arrive early at the battlefield will be in a position to take the initiative Integrated Power of defence/energy Marketing approach must permeate whole company Strengthen the internal structure to defend oneself All troops must co-operate to achieve better results Strategic Laying plan Probing analysis leading to a winning strategy Thorough analysis of environment and competitors before laying plan Effectively executed Waging war Strong and disciplined, executed on a daily basis Act quickly once decided to wage a war Table II Differences between Art of Warfare and Western business strategies Art of Warfare Western business strategic theories Contents Wilder: not only covers strategy and Focused: mainly on strategy and management but also human resources, management leadership, finance, etc. Description Specific: details in both strategy and tactics, General: details in strategy only; provide suggested to leaders what they should do a framework for management but not the when facing certain situations and environment skills Focused Competitors: as warfare is all about winning Consumers: play an important part as strategy, no consumers are involved they buy the products. Also easier to manage and obtain information from them compared to competitors Decision making Generalship: general is the heart of command, Top management with consultation: so rely very much on his ability involve more staff at junior level; good communication structure required Winning model-outer ring “Winning model” to achieve Analyses of situations business success Analyses of the external and internal envi- In order to provide effective guidelines on the ronments are always the essential steps deployment of the Sun Tze Art of Warfare in before laying down a detailed plan, since businesses, a framework called the “winning better decisions may be achieved through a model” is proposed in Figure 1, with the thorough understanding of the situation. details explained as follows. This is of great importance in the modern business environment – in order to gain suc- Aim and structure of the model cess it is vital to do the right thing the first The aim of the model (winning model) is to time. Thus, reliable and detailed market describe a winning business strategy against knowledge is essential. Sun Tze proposed the competitors, in a step-by-step procedure, same ideas. In The Art of Warfare, chapter III, based on Sun Tze’s philosophy The model is . he mentioned the importance of understand- divided into two parts. The first part is the ing the environment, the enemy and oneself, “outer ring” which is meant to be functional as a key to winning a battle. He stated: The one who has a thorough knowledge of and directly linked to the day-to-day opera- himself and the enemy is bound to win in all tions. The second part is the “inside chain” battles. The one who knows himself but not which is more specific for formulating a par- the enemy has only an even chance of win- ticular winning strategy, for instance, enter- ning. The one who knows not himself nor ing into a new market. the enemy is bound to perish in all battles. [ 39 ]
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  Samuel K. Hoand In other words, the more analyses which Thus the initial step towards success is to be Amy S.F. Choi have been carried out, the better the chances clear-minded and gain a thorough under- Achieving marketing success of winning. In respect of knowledge of the standing of the current and future business through Sun Tze’s Art of external business environment (which is environment. The purpose of doing this is to Warfare akin to climate and terrain), Sun Tze said in compare the strengths and weaknesses Marketing Intelligence & his chapter X that: Planning between oneself and the enemy and calculate Know your enemy and yourself, your vic- the chances of winning so as to make a deci- 15/1 [1997] 38–47 tory will not be threatened; know the sion whether or not to proceed with combat. climate and terrain, your victory will be assured. Comparison checklist Unlike the PEST and SWOT analyses, Sun Figure 1 Tze provided a more detailed checklist on “Winning model” – achieve business success through Sun Tze’s Art of Warfare what should be considered before making an important decision. In chapter IV of his book, Reminder Time is money he used “five factors” (Table III) and “seven kit Formulation dimensions” (Table IV) to elaborate further on what can lead to a victory In business, . Positive Unsure these five factors and seven dimensions can victory victory be considered to be a checklist and evaluation tool for reference by management before Offensive Defensive making a decision. strategy strategy The questions posed by the seven dimen- sions may be modified to fit the nature and Comparison Who? • Hidden Where? • Strengthen needs of the organization. They are listed Five factor table External When? only as a guideline to explain further the and environment What? meanings of the dimensions. The seven seven How? dimensions are not necessarily weighted comparison chart equally – they can be allocated “weight fac- Goals and tors”, depending on the needs of organiza- objectives tions. After allocating a mark for each dimen- sion (maximum 100 per cent – note only one Organization Formulation of score is required, although some of them have Competitor strategies posed two questions), the overall percentage is: Implementation of strategies Total Score × 100 per cent. 700 Evaluation According to Sun Tze, if the total score is over 60 per cent, it should continue with the plan- ning of warfare because the internal Business resources and external environment are Capable information more favourable than for their competitors. leaders and system Therefore, the higher the score, the greater flexibility the chance of winning. Competitors’ Business information system information by using spies In order to obtain quality information to make decisions and comparisons, a well orga- nized and managed business information Table III system is required. Currently, an increasing “Five factors” table – five areas to be considered number of organizations are setting up mar- keting information systems or consumers’ Five factors In war In business and competitors’ databases which perform Morality Moral of the ruler Moral of the key management functions similar to business information Social responsibility of the organization systems. Climate Climate nature Business climate, e.g. recession In general, three types of information can be classified within the business information Terrain Terrain of battlefield Industrial environment, e.g. competitiveness system. They are the organization, external Generalship Ability of generals Qualiy of staff and management environment and competitors” (Figure 2). Doctrine Discipline of the troops Government regulations and organization The most useful and influential informa- Exection of laws and discipline tion is usually the most difficult to obtain. In instruction his chapter XIII, Sun Tze suggested the use of [ 40 ]
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  Samuel K. Hoand Figure 2 Amy S.F. Choi Business information system Achieving marketing success through Sun Tze’s Art of Warfare Marketing Intelligence & Planning 15/1 [1997] 38–47 Table IV “Seven dimensions” chart Questions need to be asked Weigh factor (WF) (This column In war should be used (This column should be omitted Score Total Seven when when this chart is used for maximum (WF × Dimensions necessary) business purposes) In business 100% score) Moral influence of Is the type of leadership morally Is the organization socially responsible? ruler acceptable? (in order to gain support Are the staff committed to the from troops) organization? Ability of generalship Which general is the most capable? Are there any suitable managerial staff in charge of the project? Advantage of climate Who has the advantages of climate? Is the current economic environment and terrain Who is able to obtain better terrain? of benefit to the project? Who has better informated industrial terrain?a Execution of law Who has effective execution of laws Are current government regulations and instruction and instruction? favourable? Which organization has better discipline? Size and number Which troops have the greater number Which organization is the largest?b of men of soldiers? Who has better human resources? Training Which army is better trained? Who has better trained staff and quality management? Reward and Which army has given proper reward Who has the better policy towards punishment and punishment? motivation of staff? Total score Notes: a Based on Michael Porter’s “five forces”, the competitiveness of the industry is decided on the barrier of entry and exit, power of suppliers and buyers. Industrial terrain refers to how well these factors are developed b Usually, a large firm has better human and financial resources. Comparing its resources with competitors, a higher mark should be given if the firm has more and better resources Overall per cent = total score × 100 per cent (To determine the health of an organization (maximum 100 per cent on each dimension) 700 [ 41 ]
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  Samuel K. Hoand spies to gather top secret information from Reminder kit Amy S.F. Choi competitors. This can be of great value in The reminder kit is a reminder for manage- Achieving marketing success determining the relevant strengths and weak- ment to speed up the decision making and through Sun Tze’s Art of nesses of an enemy or competitor. However, it planning process which are normally expen- Warfare also involves controversial ethical issues. sive human and financial resources and could Marketing Intelligence & Planning Therefore, it is up to the organization itself to delay the implementation of a project. Delay- 15/1 [1997] 38–47 decide whether it should engage in this or ing the commencement of a project might not. affect the likelihood of sucess of the selected Sun Tze identified five types of spies in his strategies because the environment and situ- ations might have already changed due to the chapter XIII: time gap between planning and execution. 1 Local spies: who live in the opposing This was inherited from the idea of chapter nation. II in Sun Tze’s book: 2 Insider spies: they are officials in the If war is prolonged or delayed , the army’s enemy’s courts and palaces. vigour and morale will be dampened. A long 3 Converted spies: they are enemy intelli- battle will also deplete the country’s gence whom you have bought over. reserves. 4 Deadly spies: those who supply the enemy with false information or those who risk Winning model – inside ring losing their lives working in the opposing Once it has been decided to enter into compe- nation. tition, a move should be quickly made 5 Secure spies: those who can return safely towards the centre part of the model – formu- to make reports after a successful spying lating the winning strategy Since Sun Tze did . not mention the sequences of formulating mission abroad. strategy, the inside chain is adopted from the Table V gives an example to show the relative Western strategy formulation framework importance of information obtained from the instead. three main sources of the outer ring of the Goals and objectives winning model. As an illustrative example, Sun Tze said that the aim of battle was not achieving success in the record industry is just for winning but also for profit. The goal explored. of running a business is somewhat parallel to warfare because the objectives of a project or Table V programme are usually related to a profit Relative influence of information for achieving success inthe record industry increase. Also, a clear and well-defined goal External Organization and objectives can ensure not only that all Critical success factors environment Competitors itself staff have a common understanding, but also provide a guideline for evaluation at the final To be able to identify and foresee technological stage of the model. developments such as digital compact cassette (DCC), mini-disc, etc. Formulation of strategies To be able to identify, nurture and promote Sun Tze stated in his Chapter III that the best a wide range of new talent which includes strategy is to win without fighting. Thus, artists, songwriters, singers and composers during the formulation of strategies (Figure 3), it should be borne in mind that a surprise To be able to strengthen their position attack on the competitor’s plan may yield in the established markets precious results. For example, consider the To be able to maintain a good relationship bucket-flight shop selling cheap flight-only with the influential mass media organizations tickets within Europe; it is better to offer such as TV broadcasts, radio stations, etc. package holidays (flight plus accommoda- To acquire extensive and cost-effective tion) which would be of benefit to the con- distribution channels sumer, rather than offering simply the same To be able to identify the future trends product at a slightly discounted price. This and preferences in the music industry would also represent an attack on the com- petitor’s strategy. To have a cost-conscious management to balance out the success and failure Offensive strategy of artists What to attack? According to Sun Tze, concen- To be able to identify the potential for a tration of effort to attack the weaknesses of new global market competitors is often the most effective strat- To secure profit from copyrights egy Also, he emphasized the importance of . confusing the enemy because this not only Key: = unimportant = important acts as a defensive strategy, but could also [ 42 ]
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  Samuel K. Hoand divert the enemy’s efforts on defending them- started to enter this new market, but Gillette Amy S.F. Choi selves elsewhere. remained market leaders and, with their Achieving marketing success Case example. A decade ago, Coca-Cola experience and benefit of low-cost production through Sun Tze’s Art of identified the weaknesses of other soft drinks together with their favourable household Warfare manufacturers in that their competitors’ name with consumers, continued to make Marketing Intelligence products did not cater for people who were on profit. Planning 15/1 [1997] 38–47 a diet or those who wanted to reduce their When to attack? The best time to attack calorie intake because of health reasons. competitors is when they have lost their Coca-Cola then introduced a product-diet direction and when they are hesitant as to the Coca Cola – which combated against the correct response to the market. Fighting at weaknesses of existing products from other the right time is the key, otherwise the whole manufacturers. plan will go to ruin. Organizations should have a good sense of timing on launching Figure 3 different products to fit into the trends of the Tool for formulation of strategies target market. Case example. In summer 1995, McDonald’s restaurant promoted their “Batman Menu” to run alongside the screening of the film Bat- man Returns. The film was targeted princi- pally at young people – also the major target segment of McDonald’s. McDonald’s created this new menu which directly matched the trend of the market. Obviously, it was a short- term exploitation of the market segment while this particular fashion was in-vogue. Who to attack? The Art of Warfare never specifically mentioned the best target to attack. However, throughout the treaty, Sun Tze highlighted the advantages of having the greatest possible manpower, since it can rep- resent strength and a greater chance of win- ning. The power of an army is akin to the size and resources of an organization. If the However, consumers generally found that the strength of an organization is greater than overall taste of the new product was slightly their competitors, a challenge for market lacking when compared to the original Coca- share should be a relatively easy affair. To Cola. This, therefore, represents a weakness attack competitors, choose those who have in the marketing of Coca-Cola. Ten years the least power or influence if the organiza- later, Pepsi-Cola (Coca-Cola’s main competi- tion’s existing resources and power cannot tor) employed similar tactics and introduced compete with the market leader. “Pepsi Max” which is totally sugar-free and How to attack? According to Sun Tze, the claimed to have the original taste of cola. strategy on how to attack the competitors Where to attack? In war, the battleground depends on the size and power of the army In . and the environment could affect the choice business, competition with others should be of strategies. Those who arrived earlier at the undertaken only when there is sufficient battleground not only can have a better human and finance resources. If there are understanding of the environment, but also fewer resources and power than competitors, can occupy the best position in preparing to tactics should be used that exploit the weak- challenge their enemies. Therefore, in a simi- nesses of the opposition. Sun Tze (Chapter I) lar vain, organizations should enter a new listed some tactics for use in war which could market or new market segment before their be applied into business, they are as follows: competitors, so that their position can be • to avoid an open clash if the opposing force secured and a substantial market share can is united or strong; be obtained. Innovation is one of the essential • to stir up the emotions of the opposing force elements to lead the competitors. so that an attack can be staged when it is Case example. Gillette UK Ltd, is a company emotionally which traditionally produced men’s shavers. unstable; Recently, they entered a new market segment • to exhaust the enemies; – women. Sales of women’s shavers are • to create distrust among the leaders, offi- tremendous, so the company gained consider- cers and soldiers of the opposing camp; able reward while they were monopolizing • to wait for the moment when the enemies the market. Inevitably, other companies are not prepared and then attack. [ 43 ]
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  Samuel K. Hoand Defensive strategy Evaluation Amy S.F. Choi Defensive strategy is used when the enemy is Although it is not mentioned in Sun Tze’s Art Achieving marketing success stronger and the organization is not ready or of Warfare, evaluation is an essential and through Sun Tze’s Art of important part of the strategic formulation Warfare prepared to go to war. It would also be used as a defensive measure while launching the process. The information gathered is valu- Marketing Intelligence able for formulating further strategies in the Planning offensive strategy Strictly speaking, a defen- . 15/1 [1997] 38–47 sive strategy should be in use at all times. future and reflects the effectiveness and effi- Organizations should concentrate on ciency of employing the winning model. Also, hiding: evaluation provides information to the orga- • The strengths and weaknesses of the orga- nization in order to modify the model to fit its nization. This can avoid the competitors specific needs. gaining an understanding of the weakest part of the organization. • The trade secrets and important informa- Nine steps towards winning strategies tion concerning the organization and its business. The following nine steps are based on the theories developed in the winning model. An Organizations should concentrate on example (entering into a new market for strengthening: computer products) is used to show the prac- • The organizational internal structure in tical procedures of formulating winning order to increase the commitment and strategies. The first four steps are related to morale of the employees. the outer ring of the model which aims at • Human resources, including having better understanding the corporate external and training for employees and recruiting qual- internal environments; the last five steps are ity management to improve the human concerned with the development of specific aspect of the organization, because Sun Tze strategies for entering into the new market. emphasized throughout the treaty that a capable general is the fundamental element Step 1 of winning the battle. The following information should be extracted from the business information Table VI compares EMI Music strategies with system. the winning model. It can be seen that EMI Music adopted both types of strategies, offen- Organization itself sive and defensive, to launch an attack • Information which should be extracted against competitors and also continuously concerning the organization includes: strengthened their current position in the • What resources and finance are available to marketplace (Thorn EMI, 1994). develop a new market? • Are there sufficient personnel on hand to cope with entering a new market? Implementation of strategy • Which departments will take charge of the new project and who will head those depart- According to Sun Tze, capable leaders and ments? flexibility are the two basic requirements for • What will be the implications for the orga- implementing strategy A general is the heart . nization? of the troops. Just like the management of a • Does it meet the mission of the business, a general is directing and control- organization? ling the development of the whole organiza- Information can be obtained from financial tion. Therefore, having capable managers and reports, ratio analyses, company profiles and quality staff represents a definite advantage data, employees, observation, etc. for the success of a business. Flexibility means being able to adapt to the Step 2 changing situations by using tactics, because Based on the information determined in competitors might respond differently result- step 1, identify which markets are suitable for ing in an unpredictable situation. In his chap- the existing capacity and competences. ter V Sun Tze used water to describe the , flexibility of implementing strategies External environment Just as water shapes itself according to the The following steps should be taken to find ground, an army should manage its victory out more about the organization’s external in accordance with the situation of the environment: enemy Just as water has no constant shape, . • Study the national statistics of countries so in warfare there are no fixed rules and which the company might have the possibil- regulations. ity to enter. Obtain information such as [ 44 ]
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  Samuel K. Hoand Table VI Amy S.F. Choi Comparing EMI music to the winning model Achieving marketing success through Sun Tze’s Art of EMI Music Sun Tze Art of Warfare Warfare Strategies used Offensive strategies Marketing Intelligence Planning Introduce innovative technology, extend this to new Where to attack 15/1 [1997] 38–47 delivery systems, new formats and new sound and Lead the competitors to where you are familiar with, production techniques, e.g. invest in music television, have more experience and are better researched audio video in CD-ROM technology EMI – secure better position and gain the first profit in the new market Extend its repertoire of sources by making small but Who to attack strategic acquisitions, e.g. acquisition of Virgin Records Attack the competitors whose size is smaller in order to Ltd and Chrysalis Group Plc strengthen their competences EMI – acquire small companies to strengthen its exist- ing competences in order to compete with the bigger and stronger competitors such as Polygram Extend its repertoire of sources by alliances with com- How to attack petitors to form a new music publishing agreement, e.g. Avoid an open clash if the opposing force is united or EMI joined partners with Sony, Polygram and Warner strong Music Group in a German start-up called VIVA, which EMI – Polygram, Sony and Warner Music Group have focuses on the development of local talent comparatively stronger power in the industry, form an alliance with them to avoid an open clash. Identify future trends particularly in technological When to attack development, e.g. they have identified digital superhigh- Wait with patience, fighting at the right time way which will become popular in the future, therefore it EMI – under “where to attack” innovation leads com- entered the business of digital cable radio by becoming petitors to where you want them to fight and makes a partner in Music Choice US. This service offers a them followers. “When to attack” is represented by wide range of advertisement-free, CD quality music to EMI Music starting to invest in digital superhighway- home subscribers related business, developing the appropriate networks, to wait for the time when digital superhighway becomes commonplace Explore the global market, maximizing the potential What to attack artists on a global scale. Develop certain artists to a A market or segment can be seen as the target to be multicultural appeal, with fans stretching from South- attacked. This also represents the opportunities of the east Asia to Latin America, e.g. in recent years, EMI market. acts from Sweden’s Roxette to the Ivory Coast’s Alpha EMI – there are still many potential markets around the Blondy have become international stars world and their music trends are strongly influenced by US and European countries. With competition high in the US and European countries, EMI explores new potential markets to “attack” Strengthen its position in an established market by Strengthen investing in and acquiring small independent record Strengthen internal human and financial resources in companies, e.g. acquisition of a German independent order to compete with future competitors record company, Intercord Tongesellschaft mbH in EMI – acquisition of Intercord can explore new talents March 1994 and the overall increase in size could help EMI to improve its sales and profitability Cost management on distribution operating system, e.g. use the just-in-time system (JIT), to meet cus- Strengthen tomers demand and achieve efficiency Strengthen the internal financial situation in order to be stronger EMI – JIT improves not only the efficiency of operation but also the quality of services which gives the com- pany greater credit Alliances with competitors to form a new music publish- Hidden ing organization (as already mentioned above) Hide the strengths and weaknesses of organisations so to confuse the vision of their competitors EMI – alliance with competitors is also a strategy by pulling the wool over their eyes to confuse the competi- tors on whether they should co-operate or compete with each other Source: Thorn EMI (1994) [ 45 ]
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  Samuel K. Hoand gross national product (GNP), population, Under short-term (first year), they could Amy S.F. Choi economic environment, culture, technologi- include: Achieving marketing success cal development, power consumption, etc. • Obtain at least 15 per cent of the market through Sun Tze’s Art of • Specifically analyse the development of the share. Warfare computing industry in the potential new • Improve at least 10 per cent profitability. Marketing Intelligence market(s). • Explore the right image of the products and Planning 15/1 [1997] 38–47 • Analyse whether any other primary data organization for the new market. are needed in order to determine which are Under long-term (second and third year), the most suitable countries to target. goals could include: • Obtain information which could predict the • Gain more than 40 per cent of the market technological development in the next five share by the third year. or ten years, etc. • Improve profitability by at least 20 per cent • Examine the existing products in the poten- each year. tial new market. Can they be further modi- • Build up the selected and appropriate fied and developed, etc.? image to the public. Step 3 Step 6 To investigate relative strengths and Assume a high score was achieved in the weaknesses. above seven dimensions chart, which repre- Competitors sents a stable internal climate, the next prior- A thorough understanding of competitors ity is to formulate an offensive strategy, should be gained both in the UK and which asks the following questions. overseas. What to attack? Regarding UK competitors, you should ask: You should: • Are they operating in overseas markets? • Identify opportunities within the new • Which countries have they chosen for fur- market. ther expansion? • Identify strengths and weaknesses of the • What (if any) successes or progresses have competitors. been achieved? • Where to attack? • What tactics or strategies were employed? • What products are they offering for these Questions you should ask include: markets? • Are there any market segments or niches • What are their planning and development unexplored by the competitors? strategies for the next five and ten years? • Can computing technology be developed for any other purposes? Are there other indus- Regarding overseas competitors, you should tries that would benefit from computeriza- ask: tion? • Who are already in the market? • Which countries possess the greatest poten- • Who are the market leaders and why? tial for exploitation and development? • What are their relative strengths and weak- nesses? When to attack? • What financial and human resources do You should: they have? • Determine the most popular products and • Which is the strongest company? topics at the present time within the com- puting industries. Step 4 • Find out how these products are used Consider the five factors and, by using the within everyday society . seven dimensions chart, evaluate the likeli- • Discover what is currently in fashion, espe- cially with the younger generation, what hood of success of entering into a new mar- they like or dislike? ket. If the total score of the comparison is • Ask whether the launch of a new product over 60 per cent, it means the likelihood of would fit in with, or go against current successfully entering into the market is high trends? and the organization should enter into the new market. Who to attack? (Finding the target) You should: Step 5 • Identify the relative sizes and power of Specify concise goals and objectives in such a existing competitors. way that progress may be charted continu- • Grade them as to whether they are weaker, ously This subsequently will provide an eas- . comparative or stronger than yourself. ier means of evaluation. • Single out those where a defeat (merger or Goal and objectives can be set as both long- takeover) would be possible and produce a term and short-term. beneficial result on the overall business. [ 46 ]
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  Samuel K. Hoand How to attack? Step 9 Amy S.F. Choi You should identify what tactics would be A full evaluation should be undertaken at the Achieving marketing success effective against competitors. end of the implementation stage. Mid-term through Sun Tze’s Art of Warfare evaluation is often useful if substantial Step 7 changes have been made to the original plan. Marketing Intelligence Planning It is imperative to gather together defensive Evaluation should not be treated as marking 15/1 [1997] 38–47 strategies-the organization must guard its the end of a project, but the beginning of the business ventures at all times. development phase in that particular country . Hide Companies should take the following steps to hide essential information: Conclusions • Key management personnel should remain Sun Tze’s Art of Warfare has long been proven alert regarding the possibility of “spies” to be successful as warfare strategies. Many within the organization. marketing strategists have tried to apply its • Confidential company information should principles in modern day businesses, but few be accessible only by those staff on a “need have developed a systematic approach. The to know” basis. Security passwords should winning model is developed based on the be used wherever possible for accessing essence of Sun Tze’s teaching in warfare computer databases. Staff identify cards strategies. Some figures, tables and short case should be worn at all times. examples have been used to illustrate his • Sometimes it is possible to let some unim- teaching and a major case study has been portant or irrelevant data leak from the used to illustrate the effectiveness of the company in the hope that it could cause a model. It provides a guideline for manage- degree of confusion amongst competitors. ment to practise Sun Tze’s proven strategies • Attempt to impress on employees the impor- in business. Although his Art of Warfare is for tance of confidentiality at all times, for military strategists, it can be adapted for example, they should not disclose any marketing applications with minor modifica- details of the company’s business to anyone tions. For example, the use of spies has been outside the organization. This information seen as an effective and efficient way of col- includes current research and development, any inner strengths or weaknesses, plans lecting top secrets from competitors in war, for the future, etc. Generally, such factors but in business, this has been considered rely on the overall commitment of staff. unethical. Nevertheless, organizations can modify the use of the model in order to fit Strengthen their particular needs. Finally, the model will Companies should take the following steps to provide a unique competitive advantage, strengthen their operations. especially when your competitors are not • Recruit high-calibre qualified people if aware of such strategies and the associated additional human resources are required. tactics. • Provide suitable training for relevant per- sonnel, some of whom may be sent to work References overseas under a totally different environ- Cheung, M. (Ed.) (1990), Sun Tze’s Art of Warfare ment and culture, etc. in Business Practice, Cheung Moon Publish- • Motivate employees by the appropriate ing, Taiwan. methods. Set up quality circles to improve Chung, T.C. (Ed.) (1991), Chinese Military Classic: the overall efficiency of operations. Make The Art of War, Asiapac Publications, Singa- employees feel proud of the successes of the pore. company and help them to understand the Davidson, H. (1987), Offensive Marketing or How to importance of their contributions to those Make Your Competitors Followers, Penguin successes. Books, Harmondsworth. Lee, Z.C., Yeung, S.K. and Cham, K.C. (1995), Sun Step 8 Tze Art of Warfare in Practice, Yuen Lau Pub- Throughout the implementation period, capa- lishing, China. ble leaders and flexibility are required to deal Lip, E. (1989), The Chinese Art of Survival, EPB with the situation. Make sure that the team is Publishers, Singapore. cohesive and motivated, and the management Thorn EMI (1994), “Playing a part in your life”, and employees have the essential skills to Financial report. cope with the sudden changes during Yuan, G. (1991), Lure the Tiger out of the Moun- implementation. Otherwise, measures need tains: The 36 Stratagems of Ancient China, to be taken to improve the situation. Judy Piatkus Ltd, London. [ 47 ]