Managing Business On A War Footing
Application of military techniques to business is not a new idea. Several books have already been written on this. So this book in the first instance does not generate any excitement. However, once you go beyond the cover, the material is interesting and thought-provoking.
Sun Tzu was a Chinese general who wrote The Art of War, two millenia ago where he tried to hand down the wisdom he had gained from years of battle. Business, like war, is fast-paced, dynamic and requires effective and efficient use of resources. The author claims that modern executives would find value in The Art of War, but would not find easy to establish the connections between principles of war and those of business. Hence this book, which explains how the strategic principles of Sun Tzu can be successfully applied to modern business situations.
The book has been broadly divided into six chapters and the titles are suggestive of the contents: Win all without fighting: Capturing your market without destroying it; Avoid strength, attack weaknesses: striking where they least expect it; Deception and foreknowledge: maximising the power of market information; Speed and preparation: moving swiftly to overcome your competition; Shape your opponent: employing strategy to master the competition; Character-based leadership: providing effective leadership in turbulent times. The last chapter is essentially a summary of the earlier chapters, though it is titled: Putting The Art of Business into Practice. The book also contains a translation of The Art of War.
The approach of the book is to first quote and briefly explain the original relevant principle of war and then deal with its application to business. What makes the book really interesting is the narration from real life business and explanation of the applicability of the principle.
For example, in the first chapter Win all without fighting, the author mentions that there are several examples of executives who, thinking that they are defeating the enemy, are destroying themselves as well. One example that the author narrates is that of Philip Morris Company, which before April 1993, was the owner of Marlboro, arguably the most profitable brand of cigarettes. In 1992, over 124 billion Marlboro cigarettes had been sold just in the Unites States and profit from the brand totalled in the billions. However, it was slowly losing its market share to discount brands. In an effort to hit the competitors hard and regain market share, the CEO of Philip Morris decided to cut the price of Marlboro by 20 per cent, little anticipating how the rivals would react. In reality, the rivals reduced their prices even further, and in the end no one made money. Philip Morris lost $ 1 billion in profits and $ 13.4 billion in its market capitalisation. The CEO had to resign.
Analysing the affair, the author says that a strategy solely based on price cutting seldom pays. It may rebound and destroys the market for every body. This is just like the military general who may want to destroy the enemy and ends up destroying every thing. The principle therefore is win all without fighting, and capturing your market without destroying it.
The book is full of relevant examples from the real world of business. The author has also cited examples from real war situations to illustrate the applicability of principles he deals with. And if nothing else, these examples make for interesting reading.