Abstract: Nowadays the number of players in the market is growing high with the increase in people’s ability to choose their product. Long gone the market occupied by monopoly players and sellers fix their price and forces the customer to buy at that price. Present trend is buyers and competitors fix the price for the product and force the seller to sell at that price. With increasing competition the whole market is like a “business combat” where every player must fight to survive. In this context the strategies applied by Sun Tzu, a Chinese general can be applied to the business itself. Sun Tzu framed twelve principles that are applied in war combat that can also be applied to business combat. They are customer, organization of intelligence, objective, offensive, mass, economy of force, surprise, maneuver, secure position, command structure, personal leadership, and simplicity.
Keywords: Sun Tzu strategies, The art of war, Business combat, Sun Tzu twelve principles
Sun Tzu was a Chinese general who first conceived of the principles of land warfare in the fifth century BC. His writings on military strategy and tactics were expanded and interpreted by various other Chinese generals between the second and thirteenth centuries AD and consolidated into “The Art of War”. Almost everybody in the business world knows about Sun Tzu, because modern business thinkers have suggested that these timeless principles of military combat translate to “business combat” as well.
Sun Tzu lists five conditions and seven attributes as prerequisites for laying plans. By these attributes and condition and from the armies of the world and from practical experience, 12 principles have been distilled as the cornerstone of great strategy.
2. First Principle: Honor the Customer
Sun Tzu’s “customers” were the people – the citizens of the empire. In marketing, people are our customers, and our customers are king – we serve at their pleasure.
2.1 Serve your customers
The ultimate objective of marketing is to produce products and services that not only satisfy customer needs but delight them, so they will return and buy again.
2.2 Target customers
Your target customers are those customers you can serve particularly well, based on your company’s strengths. People who care about what you care about are more likely to recognize the quality of your products or service offering and be willing to pay for it.
2.3 Find out what customer thinks
Don’t prioritize according to your needs. Don’t guess about the customer’s priorities. Ask your customer about his or her priorities, and then prioritize your actions according to your customer needs.
3. Second Principle: Organization of Intelligence
What is needed in war is to obtain the name of the enemy leader and decide on his capacity, so as to calculate what his plans will be and make use of this survey to obtain success without great difficulty.
“Wu Chi on The Art of War”
Know your market as well as you know yourself. A good formal and informal intelligent system coupled with good marketing practices puts you in the business of managing risks instead of taking risks.
Assess your marketing opportunity. Sun Tzu lists five assessment factors that have modern marketing management equivalents. Analyze strengths, weaknesses, opportunities and threats. And also learn from the experience of others.
Prepare a competitive analysis. Know your competitors as organisations and as people. The best competitive analysis profiles not only the company but also the characteristics of the top decision-makers. When you truly understand your competitor as a person, you can more easily predict her or his future courses of action. Competitive comparisons analysis reveals competitive strengths, weaknesses, and costs. Your customers are comparing your products and services to those of your competitor. You must also make similar comparisons in order to achieve competitive superiority.
4. Third Principle: Maintenance of the Objective
A clear intention and a steady aim is needed. Some strategists believe that the objective is the most important principle because without an objective, all of the other principles are pointless. The objective is intertwined with the strategy.
The objective determines the” what”, and the other principles guide the “how”. Get your objective right from the start. The business objective must be clearly defined, decisive and attainable. Actions must be clearly communicated and results must be measurable.
Find a winning strategy. Of all the maxims in the Art of War,” fighting when victory is assured” is among the most significant and useful because it clearly states that the way to win must be determined before the battle. The supreme excellence is to win without fighting.
Be aware of strategic turns also known as paradigm shifts that can affect your business. Markets evolve, new products emerge and the world moves on. Do not underestimate your competitors. Do not reject new information and consider your worst indicator.
5. Fourth Principle: The Secure Position
The leader must take up a strong position, inspire others to follow him, discover where the enemy is weak and attack there.
– The Art of War
Occupy a position that cannot easily be taken by your opponents. A secure position establishes the basis for an offensive. A secure position helps you make use of your natural strength.
Invincibility lies in the defense; the possibility of victory in the attack. Occupy the high ground in the market. Through the centuries, strategists have emphasised the importance of the strength that comes from having right on your side. In the art of war moral influence is listed as the first of five fundamental factors. Conquesting is a strategy for finding the high ground in a segment of the market.
The biscuit defense is to plan a good offense. When you are constantly on the defensive, you seldom win. If you stop the enemy attack that will most likely be another one.
6. Fifth Principle: Offensive Action
Keep on the offensive to secure freedom of action. Offensive action provides initiative of movement. Offensive action keeps you in control. Action permits the manager to exploit the initiative and impose his or her will on the marketplace or the competition. The key to the successful offensive are skill, preparation, training, and above all Information.
Seize the initiative. The most effective and decisive way to reach the objective is to seize, maintain and exploit the initiative. Being on the offensive puts you in control of the relationship with your customers and forces your competitors to react.
Tactics change in an infinite variety of ways to suit changes in the circumstances. Have a tactical flexibility by having offensive action. While strategies remain constant tactics must be adapted to each new situation. The battle for market share is much like a tug of war.
While we have heard of stupid haste in war, we have not yet seen a clever operation that was prolonged. – Sun Tzu
Plan a speedy victory. Think of the competitive advantage that can accrue from being able to move twice as fast as your competitor. The later you start the more time you require.
7. Sixth Principle: Surprise
If you take a few men and make a sudden surprise attack on a narrow road with loud soundings of gongs and drums, the biggest army may be thrown into confusion.
—- The art of war.
Fourth century BC
Surprise is the best way to gain psychological dominance and deny the initiative to your opponent.
Surprise in marketing occurs most often when companies do not take new competition seriously. In the business arena, surprise is most often not an event but rather the result of recognising that something undesirable has been happening.
Secrecy is a partner of surprise. The marketing application of the silent attack can be found in small, privately held companies and large corporations that grow their own management structure. In these organisations, marketing secrecy is easier to maintain than in companies with more mobile management staff.
Strike the enemy at a time or place or in a manner for which he is unprepared. Do the unexpected. In war or in business, this requires speed, information superiority and asymmetry. It’s not necessary that the opponent be completely unaware, only that he become aware too late to react effectively.
8. Seventh Principle: Maneuver
The easiest routes are often the most heavily defended; the longest way round can be the shortest way home.
Maneuver is a way of thinking about how you move to a position of competitive advantage. Maneuver allows you to concentrate or disperse.
Maneuver is simply a process of moving and acting in a way that puts your competitor at a disadvantage. Without thinking about how you can maneuver, the idea of fighting when you’re outnumbered is ludicrous. When thinking about maneuvering, you understand how to attack specific segments, markets or accounts where you can win.
Maneuver is the dynamic element of marketing. It’s the means that enables small companies to compete against large ones and large ones to get bigger. Maneuver aimed at gaining leverage from the buying and selling relationship must be designed to give benefits to both parties. Mutual leverage is the key to customer loyalty programs: the seller benefits from a revenue stream, and the buyer benefits from the pre-war program.
The right maneuver varies with the circumstances. The various maneuvers are frontal attack, flanking attack, attack in echelon, relocate the battle, blitz, encirclement, defense, fabian, guerrilla, Gen Pogo’s strategy, retreat.
9. Eighth principle: concentration of resources
Maas sufficiently superior force at the decisive place and time The concentration is a management commitment to the a marketing offensive. The concentration is always of strength against weakness.
The fundamental strategy for success in the marketing attack to plan a concentration of resources where
(1) Needs have been identified
(2) Competition is weak
(3) Profit potential is high
The highest levels of success occur when resources are focused where decisive results can be achieved profitably. The essence of concentration of resources is the concentration of your strength against the opponent’s weakness. Marketing concentration is not a mere mass of numbers, but rather a focusing of your marketing strategy and tactics.
If your marketing force is weaker than your competitor’s, and if you fight head-to-head against your competitor, then you will end up with a very bad headache or no head at all. When thinking about where you are going to concentrate, look for the weakness of the opponent’s strength.
Attack vigorously when you can concentrate superiority against a weak spot in the competitor’s line. Concentration works in everything and everywhere. It can be applied in strategy, advertising, sales promotion, selling, leadership, management.
10. Ninth Principle: Economy of Force
Assess accurately where you employ your resources. Economy of force requires a return on investment. Economy of force allocates all resources to the main effort.
This military principle reveals the other side of the coin from concentration of resources. When you concentrate in one area, you will be weak in other areas. Once you have decided were to concentrate, economy of force deals with the allocation of resources.
The world economy in “economy of force” does not refer to economizing; rather, it refers to the effective use of resources.
Economy of force as two dimensions
(1) Efficiency-avoiding the waste of time and resources
(2) Effectiveness- getting the right results
10.1 Do not waste energy
Forces are wasted in actions like the Battle of Leyte gulf, where Admiral Halsey took his great third Fleet on a high-speed dash of 300 miles against a decoy, then turn to pursue the main force, which he never reached. This chopping and changing is analogous to the entrepreneur who opens branch operations in distant cities and spends so much time travelling back and forth that he can barely find time to run the business.
10.2 Choose your battles
If not in the interests of the state, do not act. If you’re not sure of success, do not use troops. If you’re not in danger, do not fight a battle. Economy of force requires that you make a profit analysis of every campaign. Your expenditures to achieve victory must yield profitable results.
11. Tenth Principle: Command Structure
Command structure provides the links in the chain so that all the other principles can be effective. Command structure provides for both the unleashing and the coalescence of human resources. The management process unleashes the power of human resources.
The US Army calls this principle “unity of command”. The point is that there must be coordination of action toward a common goal, and that coordination is best achieved by vesting a single commander with authority. When everyone decides everything, no one really decides anything. Rule by committee becomes ruled by compromise and mediocrity.
Overcentralised management of a marketing organisation makes field managers” turnaround and face the rear”. In overcentralised structures, manager’s success in the organisation depends more on how he or she relates to headquarters than to customers. As a result, these managers in the organisation lose touch with the market, and disaster follows.
11.1 Build Morale
In order to kill the enemy, our men must be roused to anger. To gain enemy’s property, our men must be rewarded with war trophies
The human spirit can be the most important factor in success, but only when released by senior commanders. Morale is a byproduct of good management. Although highly Morale is a component of the management, Morale is not a separate objective. High Morale happens when leaders to the “right things”
11.2 Communicate clearly
In interpersonal communications, the first rule is to focus on listening to what the other person wants to say. The second rule is to avoid emotional reactions- when that possibility arises, treat the discussion clinically.
11.3 Win battles and the war
Marketing is the buying and selling up things with goodwill at a profit. If you can have only one, take goodwill because it is tomorrow’s profit. This definition implies not only making the first sale, but also building a future business relationship that is nurtured with great service and quality. You want to keep customers because the life time value of their customers is an awesome number, repeat customers are happy customers who recommend your business to others, tend to increase their purchases every year and the cast of acquiring new customers is high, very high.
12. Eleventh Principle: Personal Leadership
It requires the leader’s faith in his or her people and their faith in the leader’s ability to win. Personal leadership provides mission. Personal leadership builds morale.
Personal leadership in command is where art takes over to control the application of science. This does not mean that the principles are ignored, but rather that a successful leader understands how to properly apply the principles. It has been wisely said that every commander must possess three qualities. The commander must have the mind of a manager, a leader, a theorist.
The mind of the manager understands Administration.
The mind of the leader understands motivation
The mind of the theorist understands strategy
The mix of these three qualities of mind varies with the position and task.
12.1 Leaders listen and learn
The higher the rank, the more important is to learn. The first step in acquiring a new company, taking over a new department, or a moving into a new position is to ask questions and listen. The first step in the Japanese entry into any market is learning-followed by entry, take over, holding. Toyota’s first entry into the American auto mobile market was the Toyopet – a miserable failure. The Japanese looked on it as a valuable learning experience in achieving a long-range objective.
12.2 Keep a positive attitude
All great achievement has been accomplished by leaders confident of the success of their missions. Lacking such confidence, many leaders require the question to be put through a series of approvals, with the approval process itself deciding the issue. Many qualities go to make a leader, but two are vital- the ability to make the right decisions, and the courage to act on the decisions.
13. Twelfth Principle: Simplicity
Even the simplest plans are difficult to execute.
Prepare clear, uncomplicated plans, and issue clear, concise orders to ensure thorough understanding. Simple plans, executed on time, are better detailed plan executed late. Commanders at all levels must weigh the apparent benefits of a complex concept of operations against the risk that subordinates will not be able to understand or follow it.
Simple marketing plans, messages and ideas communicate best. The ever elusive Murphy has a few simple but useful laws:
if it looks stupid, but works, it isn’t stupid
no plan survives the first contact intact
the important thing are always simple
the simple things are always hard
The factors, principles and other aspects of military strategy and operations discussed here are probably more applicable “business combat” than any other military paradigm. If one can adopt and internalize the art of war to their business, they can put their organization in a position of unquestionable strength when dealing with competitors and external environment.
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