Published in Philippine Daily Inquirer, March 5, 2004
THE TUMBLING peso and political uncertainty that wraps the nation until immediately after May 10, 2004 has caused many less spirited businessmen to maintain a status quo in managing their business.
The savvy businessman recognizes that while the political environment poses a threat, this should not deter him from exploring alternative opportunities.
The great military strategist and ancient Chinese philosopher Sun Tzu whose classic treatise, The Art of War, which was translated in several languages has stated, “One does not rely on the enemy not attacking but relies on the fact that he himself is unassailable.” This means that, despite peaceful or turbulent times, the true commander, in this case the entrepreneur forges ahead by relying heavily on one’s inner strength. The real leader prefers to innovate than stagnate, lead rather than follow, initiate rather than cower with malcontent and studies the terrain rather than depend on hearsay or baseless information. Doing so, the great leader who is likely the astute businessman increases his firm’s competitive advantage, value and effectiveness whether in moments of stability or instability.
When applied to marketing, Sun Tzu’s art of war and military principles may lead to the following marketing strategies.
Sun Tzu’s military strategy espouses the practical art of war, â€œwhere the best thing of all is to take the enemy’s country whole and intact; to shatter and destroy it is not so good. Supreme excellence consists in breaking the enemy’s resistance without fighting. Instead of spending time and effort trying to kill competition, smaller players band together, hence, drawing on each other’s strengths while at the same time masking each other’s weaknesses. The One World Alliance, launched in February 1999, is an alliance of several airlines that aims to serve international travel requirements across different regions without the traveler individually making arrangements with separate airline companies. Under it, a traveler can fly routes from Asia to Latin America to Northern Europe, United States, Ireland, etc. while centralizing arrangements with a One World Alliance staff. Airline travelers enjoy the same privileges across all participating airlines.
Successful coopetition, also known as co-branding or co-marketing, hinges on knowing and understanding your partners’intent as well as maintaining mutual transparency in business dealings.
Sun Tzu writes, “If we wish to fight, the enemy can be forced to an engagement even though he be sheltered behind a high ramp and deep ditch. All we need to do is to attack some other place that he will be obliged to relieve. If the enemy is the invading party, we can cut his line of communications and occupy the roads by which he will have to return; if we are the invaders, we may direct our attack against the sovereign himself.”
The local businessman is under siege from global players. Global free trade made possible by the GATT, Afta and WTO has leveled the playing field. Local players, to remain competitive, must learn to wage the war in global markets.
San Miguel Corp., which first sold beer in 1890, is making inroads in North and South Asia, Australia, Middle East, Africa and the US.
Retail apparel Bench, first marketed in 1987, has franchise outlets in Saudi Arabia, Kuwait, Guam, Canada, United Arab Emirates and China.
The Figaro Coffee Co., a local coffee chain known for its freshly roasted coffee blends including the uniquely Filipino Barako blend, is now in Hong Kong, China and Saudi Arabia.
Goldilocks, which sold its first baked products 36 years ago, has outlets in California, Canada and Las Vegas.
Liwayway Marketing Corp.’s Oishi brand of snacks is making a lot of headway in China, Vietnam and Brunei.
Sun Tzu relates, “Unhappy is the fate of one who tries to win his battles and succeed in his attacks without cultivating the spirit of enterprise, for the result is waste of time and general stagnation. The enlightened ruler lays his plans well ahead; the good general cultivates his resources.”
Luck, Divine Providence or simply being there at the right time and right place, are some of the cited reasons why certain businesses have flourished. Unfortunately, the same naivet has caused many of these businesses their downfall. Greed, lack of vision, absence of an enterprising, innovative spirit and serious commitment to sustain the business moves the company to stagnation and general decline. Not so, with committed business leaders, who strive to strengthen their current businesses as well as look ahead at opportunities for future sources of profitability.
Coke is a 118-year-old brand. Today, it has a brand value of $70.45 billion based on Interbrand’s valuation report.
The brand remains at the forefront by recognizing opportunities and threats arising from the macro-environment, moving to adapt itself to the changes and challenges. For example, realizing the rising number of consumers favoring healthy beverages, Coke has introduced extensions, Diet Coke and Coke Light. It has also developed and acquired a stable of other healthy drinks like Minute Maid, Fruitopia, Hi-C, Powerade, etc.
According to Sun Tzu, “An army may march great distances without distress if it marches through the country where the enemy is not. You can be sure of succeeding in your attacks if you only attack places that are undefended.”
A flank attack becomes successful when there is a gap in the needs of the present market and not one among the existing players are able to serve the need well. Chowking’s founder Robert Kuan related in a symposium how despite political adversity in 1985, he was able to build Chowking knowing that there is a need for a Chinese-Filipino fastfood version of Jollibee and McDonalds. Fifteen years later in 2000, there were 155 outlets.
One of America’s best performing bank, Commerce Bank founded in 1973, had a stock growth of 2,000 percent in 10 years by serving the needs of customers who preferred the old fashioned way of face to face interactions and settling banking transactions. Commerce Bank has more than 270 bank
branches. The bank lures customers to its branches that operate seven days a week through excellent customer service, convenient locations, in-store (its branches are called stores) special events and activities, mascots, fun to operate penny change machines that kids and adult clients enjoy tinkering with, among others.
Sun Tzu wisely stated, “Concentrate your energy and hoard your strength.” Where resources are spread too thinly, one is vulnerable to attack. The experienced marketer understands how it is best to concentrate resources in star brands, possibly developing question mark brands (those with weak market position in a high-growth industry) and cleverly pruning dog brands (those with weak market position in a low-growth industry). Sun Tzu’s “Art of War” in marketing illustrates how adverse political
uncertainty must not take entrepreneurs and marketers by the collar for in every adversity lays great possibilities and huge opportunities.