Competition sun tze_v.imp

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Marketing Intelligence &Planning15/1 [1997] 38–47

© MCB University Press [ISSN 0263-4503]

Achieving marketing success through Sun Tze’s Artof Warfare

Samuel K. HoDepartment of Corporate Strategy, De Montfort University, Leicester, UKAmy S.F. ChoiDepartment of Corporate Strategy, De Montfort University, Leicester, UK

Explores Sun Tze’s Art ofWarfare, a set of 2,300-year-old Chinese military strate-gies which have been found tobe analogous to some con-temporary business strate-gies on competition. Uses asystematic approach todevelop a model through SunTze’s Art of Warfare for busi-nesses to achieve successagainst competition. Developsa “winning model” whichprovides a structured frame-work for the successfuldeployment of Sun Tze’s ideain businesses. Uses somemini-cases to illustrate theapplications of the model anda hypothetical case “Enteringinto a new market” to demon-strate step-by-step how toformulate winning strategiesby using the model.

Introduction

Sun Tze was a great military leader and war-fare genius in China. He was born during theWarring States Period (473-211BC). Differentstate commanders (seven of them in total)were battling among themselves for the king-ship of China. Sun Tze wrote an extraordi-nary military treaty, the Art of Warfare,which consisted of 13 chapters and used only5,600 words to exhibit the secrets of successon the battlefield. The 13 chapters were:• Chapter I. Laying a plan.• Chapter II. Waging a war.• Chapter III. Offensive strategy.• Chapter IV. Power of defence.• Chapter V. Energy.• Chapter VI. Opportunism.• Chapter VII. Manoeuvring.• Chapter VIII. The tactical variation.• Chapter IX. Marches.• Chapter X. Terrain.• Chapter XI. The nine situation.• Chapter XII. Attack by fire.• Chapter XIII. Use of spies.

His book has been used widely in China eversince by strategists and emperors, andnumerous warfare successes have beenachieved by those who followed his strategies.

Contemporary literature on Sun Tze

The literature available on Sun Tze’s teachingis still very limited. Various piecemeal exam-ples have been used to illustrate the potentialof the Art of Warfare in business. Broadlyspeaking, the existing literature can be classi-fied into three main categories. They are:1 Direct translation. Those researchers who

directly translate the 13 chapters of SunTze from Chinese to English. Some of theseworks are in cartoon form and others arein simple English (Chung, 1991; Lip,1989).They are easy to understand but lackthe full exploration of the spirit of the Artof Warfare on business applications.

2 Interpretation with examples. Most of thisliterature has reorganized the 13 chaptersunder different headings which includestrategic management, human resourcesmanagement, finance management andinformation management (Cheung, 1990).Some of the literature is divided into dif-ferent processes such as decision-makingprocess, production management processand sales process (Lee et al., 1995). How-ever, much of it remains still at earlystages of development and further valida-tions are required.

3 Management tools developed through SunTze’s ideas. These are practical and idealpackages for management to employ sincethey are normally developed into modelsor frameworks which provide step-by-stepprocedures for achieving success in busi-ness. This approach takes into account theparallels and similarities which existbetween the Art of Warfare and businesspractices (Yuan, 1991). Unfortunately, liter-ature in this category is extremely limitedand usually not tested with Western busi-ness practices. This presents barriers forWestern management to effectively imple-ment such methods.

Similarity and differences with Westernbusiness strategiesDavidson (1987) in his book on offensive mar-keting mentioned that adopting offensivemarketing can make the switch from losing towinning. He used POISE (profitable, offen-sive, integrated, strategy and effectively exe-cuted) to elaborate the elements for carryingout offensive marketing which has beenfound to have many similarities with SunTze’s Art of Warfare. Their similarities aresummarized in Table I.

Since Sun Tze’s Art of Warfare is a treatisedesigned originally for warfare strategies, itobviously has some distinctions when com-pared with current Western business strate-gic theories. The major differences are summarized in Table II.

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Samuel K. Ho andAmy S.F. ChoiAchieving marketing successthrough Sun Tze’s Art of Warfare


“Winning model” to achieve business success

In order to provide effective guidelines on thedeployment of the Sun Tze Art of Warfare inbusinesses, a framework called the “winningmodel” is proposed in Figure 1, with thedetails explained as follows.

Aim and structure of the modelThe aim of the model (winning model) is todescribe a winning business strategy againstcompetitors, in a step-by-step procedure,based on Sun Tze’s philosophy. The model isdivided into two parts. The first part is the“outer ring” which is meant to be functionaland directly linked to the day-to-day opera-tions. The second part is the “inside chain”which is more specific for formulating a par-ticular winning strategy, for instance, enter-ing into a new market.

Winning model-outer ringAnalyses of situationsAnalyses of the external and internal envi-ronments are always the essential stepsbefore laying down a detailed plan, sincebetter decisions may be achieved through athorough understanding of the situation.This is of great importance in the modernbusiness environment – in order to gain suc-cess it is vital to do the right thing the firsttime. Thus, reliable and detailed marketknowledge is essential. Sun Tze proposed thesame ideas. In The Art of Warfare, chapter III,he mentioned the importance of understand-ing the environment, the enemy and oneself,as a key to winning a battle. He stated:

The one who has a thorough knowledge ofhimself and the enemy is bound to win in allbattles. The one who knows himself but notthe enemy has only an even chance of win-ning. The one who knows not himself northe enemy is bound to perish in all battles.

Table ISimilarities between Davidson (1987) and Sun Tze’s ideas

Huge Davidson – offensive marketing (POISE) Sun Tze – Art of Warfare

Profitable Offensive strategyProper balance between firm’s needs for profit and Aim of warfare is not only for winning but also for profitconsumer’s need for value

Offensive OpportunismMust 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/energyMarketing approach must permeate whole company Strengthen the internal structure to defend oneself

All troops must co-operate to achieve better results

Strategic Laying planProbing analysis leading to a winning strategy Thorough analysis of environment and competitors before

laying plan

Effectively executed Waging warStrong and disciplined, executed on a daily basis Act quickly once decided to wage a war

Table IIDifferences 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, managementleadership, finance, etc.

Description Specific: details in both strategy and tactics, General: details in strategy only; providesuggested to leaders what they should do a framework for management but not thewhen facing certain situations and environment skills

Focused Competitors: as warfare is all about winning Consumers: play an important part asstrategy, no consumers are involved they buy the products. Also easier to

manage and obtain information from themcompared 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

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In other words, the more analyses whichhave been carried out, the better the chancesof winning. In respect of knowledge of theexternal business environment (which isakin to climate and terrain), Sun Tze said inhis chapter X that:

Know your enemy and yourself, your vic-tory will not be threatened; know the climate and terrain, your victory will beassured.

Thus the initial step towards success is to beclear-minded and gain a thorough under-standing of the current and future businessenvironment. The purpose of doing this is tocompare the strengths and weaknessesbetween oneself and the enemy and calculatethe chances of winning so as to make a deci-sion whether or not to proceed with combat.

Comparison checklistUnlike the PEST and SWOT analyses, SunTze provided a more detailed checklist onwhat should be considered before making animportant decision. In chapter IV of his book,he used “five factors” (Table III) and “sevendimensions” (Table IV) to elaborate furtheron what can lead to a victory. In business,these five factors and seven dimensions canbe considered to be a checklist and evaluationtool for reference by management beforemaking a decision.

The questions posed by the seven dimen-sions may be modified to fit the nature andneeds of the organization. They are listedonly as a guideline to explain further themeanings of the dimensions. The sevendimensions are not necessarily weightedequally – they can be allocated “weight fac-tors”, depending on the needs of organiza-tions. After allocating a mark for each dimen-sion (maximum 100 per cent – note only onescore is required, although some of them haveposed two questions), the overall percentageis:

Total Score × 100 per cent.700

According to Sun Tze, if the total score is over60 per cent, it should continue with the plan-ning of warfare because the internalresources and external environment aremore favourable than for their competitors.Therefore, the higher the score, the greaterthe chance of winning.

Business information systemIn order to obtain quality information tomake decisions and comparisons, a well orga-nized and managed business informationsystem is required. Currently, an increasingnumber of organizations are setting up mar-keting information systems or consumers’and competitors’ databases which performfunctions similar to business informationsystems.

In general, three types of information canbe classified within the business informationsystem. They are the organization, externalenvironment and competitors” (Figure 2).

The most useful and influential informa-tion is usually the most difficult to obtain. Inhis chapter XIII, Sun Tze suggested the use of

Figure 1“Winning model” – achieve business success through Sun Tze’s Art of Warfare

Goals andobjectives

Formulation ofstrategies

Implementation ofstrategies

Evaluation

Com

petit

or

Organization

Externalenvironment

Offensivestrategy

Who?Where?When?What?How?

Defensivestrategy

• Hidden• Strengthen

Positivevictory

Unsurevictory

Formulation

Comparison

Five factor tableand

sevencomparison chart

Reminderkit

Businessinformation

system

Competitors’information by

using spies

Capableleaders and

flexibility

Time is money

Table III“Five factors” table – five areas to be considered

Five factors In war In business

Morality Moral of the ruler Moral of the key managementSocial responsibility of the organization

Climate Climate nature Business climate, e.g. recession

Terrain Terrain of battlefield Industrial environment, e.g. competitiveness

Generalship Ability of generals Qualiy of staff and managementDoctrine Discipline of the troops Government regulations and organization

Exection of laws and disciplineinstruction

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Table IV“Seven dimensions” chart

Questions need to be askedWeigh factor (WF)(This column In warshould 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 managerialstaff in charge of the project?

Advantage of climate Who has the advantages of climate? Is the current economic environmentand terrain Who is able to obtain better terrain? of benefit to the project?

Who has better informated industrialterrain?a

Execution of law Who has effective execution of laws Are current government regulationsand 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 qualitymanagement?

Reward and Which army has given proper reward Who has the better policy towardspunishment and punishment? motivation of staff?

Total scoreNotes: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 developedb 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 resourcesOverall per cent = total score × 100 per cent (To determine the health of an organization (maximum 100 per cent on each dimension)

700

Figure 2Business information system

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spies to gather top secret information fromcompetitors. This can be of great value indetermining the relevant strengths and weak-nesses of an enemy or competitor. However, italso involves controversial ethical issues.Therefore, it is up to the organization itself todecide whether it should engage in this ornot.

Sun Tze identified five types of spies in hischapter XIII:1 Local spies: who live in the opposing

nation.2 Insider spies: they are officials in the

enemy’s courts and palaces.3 Converted spies: they are enemy intelli-

gence whom you have bought over.4 Deadly spies: those who supply the enemy

with false information or those who risklosing their lives working in the opposingnation.

5 Secure spies: those who can return safelyto make reports after a successful spyingmission abroad.

Table V gives an example to show the relativeimportance of information obtained from thethree main sources of the outer ring of thewinning model. As an illustrative example,achieving success in the record industry isexplored.

Reminder kitThe reminder kit is a reminder for manage-ment to speed up the decision making andplanning process which are normally expen-sive human and financial resources and coulddelay the implementation of a project. Delay-ing the commencement of a project mightaffect the likelihood of sucess of the selectedstrategies because the environment and situ-ations might have already changed due to thetime gap between planning and execution.

This was inherited from the idea of chapterII in Sun Tze’s book:

If war is prolonged or delayed , the army’svigour and morale will be dampened. A longbattle will also deplete the country’sreserves.

Winning model – inside ringOnce it has been decided to enter into compe-tition, a move should be quickly madetowards the centre part of the model – formu-lating the winning strategy. Since Sun Tze didnot mention the sequences of formulatingstrategy, the inside chain is adopted from theWestern strategy formulation frameworkinstead.

Goals and objectivesSun Tze said that the aim of battle was notjust for winning but also for profit. The goalof running a business is somewhat parallel towarfare because the objectives of a project orprogramme are usually related to a profitincrease. Also, a clear and well-defined goaland objectives can ensure not only that allstaff have a common understanding, but alsoprovide a guideline for evaluation at the finalstage of the model.

Formulation of strategiesSun Tze stated in his Chapter III that the beststrategy is to win without fighting. Thus,during the formulation of strategies (Figure3), it should be borne in mind that a surpriseattack on the competitor’s plan may yieldprecious results. For example, consider thebucket-flight shop selling cheap flight-onlytickets within Europe; it is better to offerpackage holidays (flight plus accommoda-tion) which would be of benefit to the con-sumer, rather than offering simply the sameproduct at a slightly discounted price. Thiswould also represent an attack on the com-petitor’s strategy.

Offensive strategyWhat to attack? According to Sun Tze, concen-tration of effort to attack the weaknesses ofcompetitors is often the most effective strat-egy. Also, he emphasized the importance ofconfusing the enemy because this not onlyacts as a defensive strategy, but could also

Table VRelative influence of information for achieving success inthe record industry

External OrganizationCritical success factors environment Competitors itself

To be able to identify and foresee technologicaldevelopments such as digital compactcassette (DCC), mini-disc, etc. ✓✓✓✓✓ ✓✓✓ ✓✓

To be able to identify, nurture and promotea wide range of new talent which includesartists, songwriters, singers and composers ✓✓✓ ✓ ✓✓

To be able to strengthen their positionin the established markets ✓✓✓ ✓✓✓ ✓✓✓

To be able to maintain a good relationshipwith the influential mass media organizationssuch as TV broadcasts, radio stations, etc. ✓✓ ✓ ✓✓

To acquire extensive and cost-effectivedistribution channels ✓✓ ✓ ✓✓

To be able to identify the future trendsand preferences in the music industry ✓✓✓✓✓ ✓✓ ✓✓

To have a cost-conscious managementto balance out the success and failureof artists ✓✓✓

To be able to identify the potential for anew global market ✓✓✓✓ ✓ ✓✓✓

To secure profit from copyrights ✓✓ ✓

Key: ✓ = unimportant ✓✓✓✓✓ = important

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divert the enemy’s efforts on defending them-selves elsewhere.

Case example. A decade ago, Coca-Colaidentified the weaknesses of other soft drinksmanufacturers in that their competitors’products did not cater for people who were ona diet or those who wanted to reduce theircalorie intake because of health reasons.Coca-Cola then introduced a product-dietCoca Cola – which combated against theweaknesses of existing products from othermanufacturers.

However, consumers generally found that theoverall taste of the new product was slightlylacking when compared to the original Coca-Cola. This, therefore, represents a weaknessin the marketing of Coca-Cola. Ten yearslater, Pepsi-Cola (Coca-Cola’s main competi-tor) employed similar tactics and introduced“Pepsi Max” which is totally sugar-free andclaimed to have the original taste of cola.

Where to attack? In war, the battlegroundand the environment could affect the choiceof strategies. Those who arrived earlier at thebattleground not only can have a betterunderstanding of the environment, but alsocan occupy the best position in preparing tochallenge their enemies. Therefore, in a simi-lar vain, organizations should enter a newmarket or new market segment before theircompetitors, so that their position can besecured and a substantial market share canbe obtained. Innovation is one of the essentialelements to lead the competitors.

Case example. Gillette UK Ltd, is a companywhich traditionally produced men’s shavers.Recently, they entered a new market segment– women. Sales of women’s shavers aretremendous, so the company gained consider-able reward while they were monopolizingthe market. Inevitably, other companies

started to enter this new market, but Gilletteremained market leaders and, with theirexperience and benefit of low-cost productiontogether with their favourable householdname with consumers, continued to makeprofit.

When to attack? The best time to attackcompetitors is when they have lost theirdirection and when they are hesitant as to thecorrect response to the market. Fighting atthe right time is the key, otherwise the wholeplan will go to ruin. Organizations shouldhave a good sense of timing on launchingdifferent products to fit into the trends of thetarget market.

Case example. In summer 1995, McDonald’srestaurant promoted their “Batman Menu” torun alongside the screening of the film Bat-man Returns. The film was targeted princi-pally at young people – also the major targetsegment of McDonald’s. McDonald’s createdthis new menu which directly matched thetrend of the market. Obviously, it was a short-term exploitation of the market segmentwhile this particular fashion was in-vogue.

Who to attack? The Art of Warfare neverspecifically mentioned the best target toattack. However, throughout the treaty, SunTze highlighted the advantages of having thegreatest possible manpower, since it can rep-resent strength and a greater chance of win-ning. The power of an army is akin to the sizeand resources of an organization. If thestrength of an organization is greater thantheir competitors, a challenge for marketshare should be a relatively easy affair. Toattack competitors, choose those who havethe least power or influence if the organiza-tion’s existing resources and power cannotcompete with the market leader.

How to attack? According to Sun Tze, thestrategy on how to attack the competitorsdepends on the size and power of the army. Inbusiness, competition with others should beundertaken only when there is sufficienthuman and finance resources. If there arefewer resources and power than competitors,tactics should be used that exploit the weak-nesses of the opposition. Sun Tze (Chapter I)listed some tactics for use in war which couldbe applied into business, they are as follows:• to avoid an open clash if the opposing force

is united or strong;• to stir up the emotions of the opposing force

so that an attack can be staged when it isemotionally unstable;

• to exhaust the enemies;• to create distrust among the leaders, offi-

cers and soldiers of the opposing camp;• to wait for the moment when the enemies

are not prepared and then attack.

Figure 3Tool for formulation of strategies

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Defensive strategyDefensive strategy is used when the enemy isstronger and the organization is not ready orprepared to go to war. It would also be used asa defensive measure while launching theoffensive strategy. Strictly speaking, a defen-sive strategy should be in use at all times.

Organizations should concentrate onhiding:• The strengths and weaknesses of the orga-

nization. This can avoid the competitorsgaining an understanding of the weakestpart of the organization.

• The trade secrets and important informa-tion concerning the organization and itsbusiness.

Organizations should concentrate onstrengthening:• The organizational internal structure in

order to increase the commitment andmorale of the employees.

• Human resources, including having bettertraining for employees and recruiting qual-ity management to improve the humanaspect of the organization, because Sun Tzeemphasized throughout the treaty that acapable general is the fundamental elementof winning the battle.

Table VI compares EMI Music strategies withthe winning model. It can be seen that EMIMusic adopted both types of strategies, offen-sive and defensive, to launch an attackagainst competitors and also continuouslystrengthened their current position in themarketplace (Thorn EMI, 1994).

Implementation of strategy

According to Sun Tze, capable leaders andflexibility are the two basic requirements forimplementing strategy. A general is the heartof the troops. Just like the management of abusiness, a general is directing and control-ling the development of the whole organiza-tion. Therefore, having capable managers andquality staff represents a definite advantagefor the success of a business.

Flexibility means being able to adapt to thechanging situations by using tactics, becausecompetitors might respond differently result-ing in an unpredictable situation. In his chap-ter V, Sun Tze used water to describe theflexibility of implementing strategies

Just as water shapes itself according to theground, an army should manage its victoryin accordance with the situation of theenemy. Just as water has no constant shape,so in warfare there are no fixed rules andregulations.

EvaluationAlthough it is not mentioned in Sun Tze’s Artof Warfare, evaluation is an essential andimportant part of the strategic formulationprocess. The information gathered is valu-able for formulating further strategies in thefuture and reflects the effectiveness and effi-ciency of employing the winning model. Also,evaluation provides information to the orga-nization in order to modify the model to fit itsspecific needs.

Nine steps towards winning strategies

The following nine steps are based on thetheories developed in the winning model. Anexample (entering into a new market forcomputer products) is used to show the prac-tical procedures of formulating winningstrategies. The first four steps are related tothe outer ring of the model which aims atunderstanding the corporate external andinternal environments; the last five steps areconcerned with the development of specificstrategies for entering into the new market.

Step 1The following information should beextracted from the business informationsystem.

Organization itself• Information which should be extracted

concerning the organization includes:• What resources and finance are available to

develop a new market?• Are there sufficient personnel on hand to

cope with entering a new market?• Which departments will take charge of the

new project and who will head those depart-ments?

• What will be the implications for the orga-nization?

• Does it meet the mission of the organization?

Information can be obtained from financialreports, ratio analyses, company profiles anddata, employees, observation, etc.

Step 2Based on the information determined in step 1, identify which markets are suitable forthe existing capacity and competences.

External environmentThe following steps should be taken to findout more about the organization’s externalenvironment:• Study the national statistics of countries

which the company might have the possibil-ity to enter. Obtain information such as

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Table VIComparing EMI music to the winning model

EMI Music Sun Tze Art of WarfareStrategies used Offensive strategies

Introduce innovative technology, extend this to newdelivery systems, new formats and new sound andproduction techniques, e.g. invest in music television,audio & video in CD-ROM technology

Extend its repertoire of sources by making small butstrategic acquisitions, e.g. acquisition of Virgin RecordsLtd and Chrysalis Group Plc

Extend its repertoire of sources by alliances with com-petitors to form a new music publishing agreement, e.g.EMI joined partners with Sony, Polygram and WarnerMusic Group in a German start-up called VIVA, whichfocuses on the development of local talent

Identify future trends particularly in technologicaldevelopment, e.g. they have identified digital superhigh-way which will become popular in the future, therefore itentered the business of digital cable radio by becominga partner in Music Choice US. This service offers awide range of advertisement-free, CD quality music tohome subscribers

Explore the global market, maximizing the potentialartists on a global scale. Develop certain artists to amulticultural appeal, with fans stretching from South-east Asia to Latin America, e.g. in recent years, EMIacts from Sweden’s Roxette to the Ivory Coast’s AlphaBlondy have become international stars

Strengthen its position in an established market byinvesting in and acquiring small independent recordcompanies, e.g. acquisition of a German independentrecord company, Intercord Tongesellschaft mbH inMarch 1994

Cost management on distribution operating system,e.g. use the just-in-time system (JIT), to meet cus-tomers demand and achieve efficiency

Alliances with competitors to form a new music publish-ing organization (as already mentioned above)

Source: Thorn EMI (1994)

Where to attackLead the competitors to where you are familiar with,have more experience and are better researchedEMI – secure better position and gain the first profit inthe new market

Who to attack Attack the competitors whose size is smaller in order tostrengthen their competencesEMI – acquire small companies to strengthen its exist-ing competences in order to compete with the biggerand stronger competitors such as Polygram

How to attackAvoid an open clash if the opposing force is united orstrongEMI – Polygram, Sony and Warner Music Group havecomparatively stronger power in the industry, form analliance with them to avoid an open clash.

When to attack Wait with patience, fighting at the right timeEMI – under “where to attack” innovation leads com-petitors to where you want them to fight and makesthem followers. “When to attack” is represented byEMI Music starting to invest in digital superhighway-related business, developing the appropriate networks,to wait for the time when digital superhighway becomescommonplace

What to attackA market or segment can be seen as the target to beattacked. This also represents the opportunities of themarket.EMI – there are still many potential markets around theworld and their music trends are strongly influenced byUS and European countries. With competition high inthe US and European countries, EMI explores newpotential markets to “attack”

Strengthen Strengthen internal human and financial resources inorder to compete with future competitorsEMI – acquisition of Intercord can explore new talentsand the overall increase in size could help EMI toimprove its sales and profitability

StrengthenStrengthen the internal financial situation in order to bestrongerEMI – JIT improves not only the efficiency of operationbut also the quality of services which gives the com-pany greater credit

HiddenHide the strengths and weaknesses of organisations soto confuse the vision of their competitorsEMI – alliance with competitors is also a strategy bypulling the wool over their eyes to confuse the competi-tors on whether they should co-operate or compete witheach other

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gross national product (GNP), population,economic environment, culture, technologi-cal development, power consumption, etc.

• Specifically analyse the development of thecomputing industry in the potential newmarket(s).

• Analyse whether any other primary dataare needed in order to determine which arethe most suitable countries to target.

• Obtain information which could predict thetechnological development in the next fiveor ten years, etc.

• Examine the existing products in the poten-tial new market. Can they be further modi-fied and developed, etc.?

Step 3To investigate relative strengths and weaknesses.

CompetitorsA thorough understanding of competitorsshould be gained both in the UK and overseas.

Regarding UK competitors, you should ask:• Are they operating in overseas markets?• Which countries have they chosen for fur-

ther expansion?• What (if any) successes or progresses have

been achieved?• What tactics or strategies were employed?• What products are they offering for these

markets?• What are their planning and development

strategies for the next five and ten years?

Regarding overseas competitors, you shouldask:• Who are already in the market?• Who are the market leaders and why?• What are their relative strengths and weak-

nesses?• What financial and human resources do

they have?• Which is the strongest company?

Step 4Consider the five factors and, by using theseven dimensions chart, evaluate the likeli-hood of success of entering into a new mar-ket. If the total score of the comparison isover 60 per cent, it means the likelihood ofsuccessfully entering into the market is highand the organization should enter into thenew market.

Step 5Specify concise goals and objectives in such away that progress may be charted continu-ously. This subsequently will provide an eas-ier means of evaluation.

Goal and objectives can be set as both long-term and short-term.

Under short-term (first year), they couldinclude:• Obtain at least 15 per cent of the market

share.• Improve at least 10 per cent profitability.• Explore the right image of the products and

organization for the new market.

Under long-term (second and third year),goals could include:• Gain more than 40 per cent of the market

share by the third year.• Improve profitability by at least 20 per cent

each year.• Build up the selected and appropriate

image to the public.

Step 6Assume a high score was achieved in theabove seven dimensions chart, which repre-sents a stable internal climate, the next prior-ity is to formulate an offensive strategy,which asks the following questions.

What to attack?You should:• Identify opportunities within the new

market.• Identify strengths and weaknesses of the

competitors.• Where to attack?

Questions you should ask include:• Are there any market segments or niches

unexplored by the competitors?• Can computing technology be developed for

any other purposes? Are there other indus-tries that would benefit from computeriza-tion?

• Which countries possess the greatest poten-tial for exploitation and development?

When to attack?You should:• Determine the most popular products and

topics at the present time within the com-puting industries.

• Find out how these products are usedwithin everyday society.

• Discover what is currently in fashion, espe-cially with the younger generation, whatthey like or dislike?

• Ask whether the launch of a new productwould fit in with, or go against currenttrends?

Who to attack? (Finding the target)You should:• Identify the relative sizes and power of

existing competitors.• Grade them as to whether they are weaker,

comparative or stronger than yourself.• Single out those where a defeat (merger or

takeover) would be possible and produce abeneficial result on the overall business.

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How to attack?You should identify what tactics would beeffective against competitors.

Step 7It is imperative to gather together defensivestrategies-the organization must guard itsbusiness ventures at all times.

HideCompanies should take the following steps tohide essential information:• Key management personnel should remain

alert regarding the possibility of “spies”within the organization.

• Confidential company information shouldbe accessible only by those staff on a “needto know” basis. Security passwords shouldbe used wherever possible for accessingcomputer databases. Staff identify cardsshould be worn at all times.

• Sometimes it is possible to let some unim-portant or irrelevant data leak from thecompany in the hope that it could cause adegree of confusion amongst competitors.

• Attempt to impress on employees the impor-tance of confidentiality at all times, forexample, they should not disclose anydetails of the company’s business to anyoneoutside the organization. This informationincludes current research and development,any inner strengths or weaknesses, plansfor the future, etc. Generally, such factorsrely on the overall commitment of staff.

StrengthenCompanies should take the following steps tostrengthen their operations.• Recruit high-calibre qualified people if

additional human resources are required.• Provide suitable training for relevant per-

sonnel, some of whom may be sent to workoverseas under a totally different environ-ment and culture, etc.

• Motivate employees by the appropriatemethods. Set up quality circles to improvethe overall efficiency of operations. Makeemployees feel proud of the successes of thecompany and help them to understand theimportance of their contributions to thosesuccesses.

Step 8Throughout the implementation period, capa-ble leaders and flexibility are required to dealwith the situation. Make sure that the team iscohesive and motivated, and the managementand employees have the essential skills tocope with the sudden changes during implementation. Otherwise, measures needto be taken to improve the situation.

Step 9A full evaluation should be undertaken at theend of the implementation stage. Mid-termevaluation is often useful if substantialchanges have been made to the original plan.Evaluation should not be treated as markingthe end of a project, but the beginning of thedevelopment phase in that particular country.

Conclusions

Sun Tze’s Art of Warfare has long been provento be successful as warfare strategies. Manymarketing strategists have tried to apply itsprinciples in modern day businesses, but fewhave developed a systematic approach. Thewinning model is developed based on theessence of Sun Tze’s teaching in warfarestrategies. Some figures, tables and short caseexamples have been used to illustrate histeaching and a major case study has beenused to illustrate the effectiveness of themodel. It provides a guideline for manage-ment to practise Sun Tze’s proven strategiesin business. Although his Art of Warfare is formilitary strategists, it can be adapted formarketing applications with minor modifica-tions. For example, the use of spies has beenseen as an effective and efficient way of col-lecting top secrets from competitors in war,but in business, this has been consideredunethical. Nevertheless, organizations canmodify the use of the model in order to fittheir particular needs. Finally, the model willprovide a unique competitive advantage,especially when your competitors are notaware of such strategies and the associatedtactics.

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