From The Art of the Advantage – 36 Strategies to Seize the Competitive Edge
by Kaihan Krippendorff (268 pp)
I have studied Japanese martial arts for well over twenty-five years, and I am a fan of Sun Tzu’s The Art of War. It is a classic guide to strategy originally written over 2500 years ago by a Chinese strategist during the period of Warring States. All great world leaders have it on their bookshelves and refer to it often. Another classic of strategy from China, developed by multiple authors, is entitled 36 Stratagems. It applies to war, politics and civil interaction, and hales from the same era of Chinese history as The Art of War. In the Art of the Advantage, Author Kaihan Krippendorff, a Columbia MBA with extensive management consulting experience, has taken this original source material and adapted it directly to modern business strategy. While a number of the stratagems might already be in use by various Western-centered corporations, having a source of thinking stemming primarily from Eastern thinking, and more specifically Taoism, is a useful reference point.
The philosophy of Lao Tzu, Taoism’s founder, emphasizes looking for patterns that can be used to understand and influence one’s environment. While some strategies might indeed appear contradictory, it’s the consideration of how each stratagem might benefit a solution to a given challenge that the perspective is best applied. The stratagems are broken into four categories, each illustrating a Taoist “law” that is fundamentally different from Western thinking. I have chosen two examples of strategies from each category. Obviously reading the complete work in detail provides a greater insight and appreciation of the advantages each strategy might offer. The Taoist categories and sample strategies within them are:
Yin Yang: Polarity – Contrary to the Western perspective of opposites and good vs. bad, the Yin Yang view suggests that these opposites are actually flip sides of each other. Hence it may not be that one needs to destroy the competition, but instead find balance or harmony with them, or find the natural leverage point to gain influence. Examples:
by Kaihan Krippendorff (268 pp)
I have studied Japanese martial arts for well over twenty-five years, and I am a fan of Sun Tzu’s The Art of War. It is a classic guide to strategy originally written over 2500 years ago by a Chinese strategist during the period of Warring States. All great world leaders have it on their bookshelves and refer to it often. Another classic of strategy from China, developed by multiple authors, is entitled 36 Stratagems. It applies to war, politics and civil interaction, and hales from the same era of Chinese history as The Art of War. In the Art of the Advantage, Author Kaihan Krippendorff, a Columbia MBA with extensive management consulting experience, has taken this original source material and adapted it directly to modern business strategy. While a number of the stratagems might already be in use by various Western-centered corporations, having a source of thinking stemming primarily from Eastern thinking, and more specifically Taoism, is a useful reference point.
The philosophy of Lao Tzu, Taoism’s founder, emphasizes looking for patterns that can be used to understand and influence one’s environment. While some strategies might indeed appear contradictory, it’s the consideration of how each stratagem might benefit a solution to a given challenge that the perspective is best applied. The stratagems are broken into four categories, each illustrating a Taoist “law” that is fundamentally different from Western thinking. I have chosen two examples of strategies from each category. Obviously reading the complete work in detail provides a greater insight and appreciation of the advantages each strategy might offer. The Taoist categories and sample strategies within them are:
Yin Yang: Polarity – Contrary to the Western perspective of opposites and good vs. bad, the Yin Yang view suggests that these opposites are actually flip sides of each other. Hence it may not be that one needs to destroy the competition, but instead find balance or harmony with them, or find the natural leverage point to gain influence. Examples:
- Exchange a brick for jade – The idea is to trade something of little value for something precious. A classic example is when a computer game vendor sells their video game consoles at a loss to gain important customer relationships to make them dependent on the future purchases of video games. Selling cheap inkjet printers paves the way for expensive ink cartridge refill sales.
- Invite your enemy onto the roof, then remove the ladder – Bait an enemy into an arena you control and force them to make mistakes. With their entry onto the digital encyclopedia market, Microsoft undercut the price of the Encyclopedia Britannica, forcing them to prematurely enter the market with poor multi-media product and a high price. Britannica almost did not recover from this blow to their market share and brand identity.
- Remove the firewood from under the pot – Challenge a competitor at a source of power, not head on. When Coca-Cola signed long-term contracts for their supply of corn syrup, it encroached on Pepsi’s access to this critical resource and in turn limited the supply forcing them to pay more for it and scramble for new venders.
- Replace the beams with rotten timbers – Attack an adversary’s key support structure, and in doing so, orchestrate its defeat. Targeting Nintendo’s dominance in the marketplace, Sony offered and easier to use and cheaper system for game developers to work on. Developers switched platforms and Nintendo’s dominance was soon over.
- Await the exhausted enemy at your ease – Identify and capitalize quickly on changing markets and set up new strategic positions. As major retailers such as Sears focused on cities and towns, Walmart built their stores in rural areas. When buying patterns shifted, population demographics shifted, and cities expanded, Walmart was positioned to dominate the market.
- Borrow a corpse for the soul’s return – Take an abandoned idea, model or technology, capitalize on its uniqueness and implement in the most advantageous time and place. Southwest Airlines focused on the old point-to-point service model, while other major airlines were committed to hub-and-spoke scheduling. Southwest grew in a market without substantive competition.
- Openly repair the walkway, secretly march to Chen Chang – Misdirect your adversary’s attention of your intentions while you stage an indirect attack which ultimately threatens the competitor’s core. When Toyota secretly targeted European luxury cars as their new market, BMW, Mercedes and other premium brands were caught off guard by Toyota’s Lexus brand. It competed directly against them with the strength of Toyota’s brand reputation for reliability and quality for cost.
- The stratagem of linking stratagems – Planning beyond a single instance of strategic advantage, when you combine various stratagems in a staged, phased and orchestrated manner, you become difficult to predict, and you have a constant flow of tactics to draw from to continually keep your opponent off guard, eventually leading to their defeat.
“By throwing away our
automatic notions of friend and foe,
new opportunities emerge.”
automatic notions of friend and foe,
new opportunities emerge.”