Lecture 4

UBMM1011
Sun Zi’s Art of War
and Business Strategies

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 Chapters
1. Detailed Assessment and Planning ( 始计 )
2. Waging War ( 作战 )
3. Strategic Attack ( 谋攻 )
4. Disposition of the Army ( 军行 )
5. Forces ( 兵势 )
6. Weaknesses and Strengths ( 虚实 )
7. Military Maneuvers ( 军争 )
8. Variations and Adaptability ( 九变 )
9. Movement and Development of Troops ( 行军 )
10. Terrain ( 地形 )
11. The Nine Battlegrounds ( 九地 )
12. Attacking with Fire ( 火攻 )
13. Intelligence and Espionage ( 用间 )

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 Chapter 6
Weaknesses and Strengths ( 虚实 )

Chapter Outline
• First mover advantage
• To dictate and not to be dictated
• Be flexible like water
• Business application: Change and staying flexible

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 First Mover Advantage

• Those who arrive first at the battleground will

have sufficient time to rest and prepare against
the enemy.

• Those who arrive late at the battleground will

have to rush into battle when they are already
exhausted.

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 First Mover Advantage

• If a force arrives late at the battleground, it will

lose all the advantages.
– The troops may already be tired.
– Thus, rushing into battle against a well-rested enemy
(who arrives early, had enough rest, and more prepare)
would be a wrong strategy.

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 To Dictate And Not To Be Dictated

• The person adept in warfare seeks to control and

manipulate his enemy instead of being controlled
and manipulated.
– He can cause his enemy to arrive on his own accord by
luring him with advantages.
– He can deter his enemy from coming by creating
(potential) danger and harm.

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 To Dictate And Not To Be Dictated
1. When the enemy is well rested, distress and tire him.
2. When he is well-stocked with food, starve him out.
3. When he is well-encamped and comfortable, provoke him
to move on.
4. Attack areas where the enemy must defend.
5. Move along routes that the enemy least expects.

• Exploit the enemy by changing the enemy strengths into

weaknesses.
• Provoke the enemy out from its comfort zone, therefore,
the enemy would become more vulnerable.

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 Avoid Being Manipulated by Enemy
1. Choose routes of movement where there is no enemy.
- They may be routes that the enemy is not interested in or
they may unaware that routes exist. Therefore, one can
travel peacefully and will not be harassed at all.
2. Attack places which are not defended by the enemy, or
where the enemy is weak and vulnerable.
3. Defend places where the enemy dares not to attack
because the defense is so strong and invulnerable or
where the enemy does not know how to attack.
4. Having the ability to withdraw faster than the enemy.

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While he plans to manipulate his enemy and change
his strengths and weaknesses, he must bear in mind
that the enemy could do likewise to him too!!!

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 Avoid Being Manipulated by Enemy
• If he strengthens the front, he will weaken the rear.
• If he defends the rear, his front will be fragile.
• If he prepares to his left, he will weaken his right.
• If he reinforces his right, he will weaken his left.
• If he tries to defend everywhere, he will be VULNERABLE
everywhere.

• The enemy must not know the places (battleground) where I

intend to attack. If the enemy does not know where I intend to
attack, he must defend many places.
• The more places the enemy defends, the more scattered are his
forces, and the weaker is his force at any one point where I am
attacking.

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 Avoid Being Manipulated by Enemy
“While remaining concealed myself, I can
keep my forces concentrated and unite my
entire troop at one place, while those of the
enemy are scattered at ten different places,
then I can use my entire force against one-
tenth of his.”

• Inferiority or weakness in numbers means

that you have to be prepared against the
enemy.
• Superiority or strength in numbers means
that the enemy will have to prepare against
you.

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 The Importance Of Knowing
The Battle Place And Time
• If you KNOW the places of the battleground and
the exact date of engagement of battle:
– your army can travel a thousand miles and still be ready
for battle.
– your army will have sufficient rest and more prepare to
fight the battle.

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 The Importance Of Knowing
The Battle Place And Time
• If you DO NOT KNOW the location of the
battleground and exact date of the battle, they
will face several risks:
– The different columns of the army may not move at the
same speed and face different type of difficulties.
– This problem is compounded when the columns are
stretched many miles apart.
– When the army arrives late, they have to rush into
battle, despite its tiredness, against a well-rested and
well-prepared enemy.

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 Victories Can Be Created
• Therefore, scheme to discover the plans and strategies of
the enemy so as to know their likelihood of success
(against us).
• Provoke him so as to know his reasons and basis for
movements and actions.
• Uncover his dispositions so as to know the vulnerability of
the ground (that he is occupying).
• Throw some contests against the enemy so as to know the
areas of his strengths and weaknesses.
• The ultimate skill in the deployment of troops is to ensure
that it has no fixed or constant formation and disposition.

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 Victories Can Be Created
• During the Spring and Autumn
Period (770 to 476 b.c.), the
Kingdom of Yue was known to have
a very large army and powerful
army.
• Yet, it did not win all battles. Thus,
the large army does not
automatically guarantee victories.

“Thus, I say: Victories can be

created by us.” ~ Sun Tzu

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 Victories Can Be Created
• In war, what matters most is how
one goes about planning,
strategizing, deploying and directing
its army to achieve the optimal
result.

• In war, both quantity and quality is

important to win a battle.

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 Be Flexible Like Water

It is the inherent characteristics of flowing water

to escape from high ground (strengths) and
hasten its movement downwards (weaknesses).

• Just as water controls its flow according

to the ground, an army should create
its victory by avoiding enemy’s strengths
and strike enemy’s weaknesses and
should shape its strategy according
to battle conditions.

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 Be Flexible Like Water
Just as water has no constant shape, so in warfare
there are no fixed rules and regulations.

• General must be FLEXIBLE in his action with respect

to strategic and tactical variations in order to gain
advantage of the changing circumstances.
• General has almost the ultimate DISCRETION to
decide what he deems the best.

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 Change and Uncertainty
The FIVE elements of nature (water, fire, wood, metal,
earth) are not always equally predominant; the FOUR
seasons make way for each other in turn. There are short
days and long; the moon has its periods of waning and
waxing.

• In warfare, there are no constant condition.

• What may be considered as strengths may become
weaknesses the next time around and vice versa.
• The general must be able to adjust (flexibility, fluidity and
adaptability) to the changes that occur ceaselessly.
• The general must be able to react and capitalise in the
changes (creating opportunities in the midst of dangers).

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 Summary

• Weaknesses and Strength Chapter explains how

your opportunities come from the openings in the
environment caused by the relative weakness of
your enemy in a given area.

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Business Application

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 Discovering Opportunities
• In business, you need to look for
opening (opportunities) that make
your progress easy.
• Weakness = needs, emptiness and a
lack of resources.
• Strength = satisfaction, fullness and
surplus of resources.
• These TWO concepts (weakness and
strength) describe the cycle that
creates and fills opening naturally.

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 Discovering Opportunities

Strengths does not come from size and money.

It comes from adapting to opponent’s weaknesses.

• If competitors focus on price, they sacrifice quality.

• If they focus on quality, they are vulnerable on price.
• If they focus on speed, they lack accuracy.
• If they focus on accuracy, they lose on speed.

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• Google has successfully shown
how to make the dot-com
advertising model work, but the
result has been relatively low-
quality products with huge
privacy and security problems --
not to mention an increasing
level of government concerns
and intervention.

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 Strengths & Weaknesses

Reinforcing weakness leverages weaknesses.

Reinforcing strength leverages strengths.

• Abandon less profitable products and services

gradually.
• Concentrate your time and efforts on providing the
resources to continue the successful advance.
• Do not spend time and resources shoring up weak
products and weak attacks.
• Ex: Proton should focus on its best car models (???),
not on its worst car model (Savvy?).
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 Creating Superior Products
Create an overwhelming superiority by concentrating
works in every dimension:

1. Strategy: Apply consistent pressure on achieving key

strategic initiatives.
2. Advertising: Use repetition of a clear, distinctive
benefit.
3. Sales promotion: Reinforce the advertising message.
4. Selling: Focus on your unique selling proposition.
5. Leadership: Concentrate on developing people.

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 The Power of Advertisement
• Concentration of ADVERTISING.
• Advertising is a marketing weapon that demonstrates
its firepower in capturing mass attention and its
consistency build up identity.

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 The Power of Advertisement
• Reinforcing strength through advertisement.
• Marketing from strengths work in every organization and
every product lines.
• Companies should focus their advertisment attack on
promoting their premier brands and products.

Example:
• The strength of departmental store is style and brand
names.
• The strentgh of boutique is specialization.
• The strentgh of frozen food and fast-food?
• The strength of Air Asia, Firefly or MAS?
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 Cereal Advertisement
(Revolution of Breakfast Menu)

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 Campbell Soup
(Revolution of Food Preparation)

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 USA’s Got Milk? Campaign
(An attempt to promote cow’s milk consumption)

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 USA’s Got Milk? Campaign
(An attempt to promote cow’s milk consumption)

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 USA’s Got Milk? Campaign
(Awareness of drinking milk has increased 90%. )

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 How To Exploit Opportunities
In Business World?
Example:
• While South Africa and Vietnamese markets were
widely ignored for political reasons (apartheid
system in South Africa and Vietnam intervention
in Cambodia), Japanese businessmen had no
worries about their brisk presence in these two
countries.

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Early Entrants (First Mover)
• Early entrant advantages?
– Company can enjoy lower costs at establishing
and maintaining a brand name.
– Can capture bigger market share.

• Early entrant disadvantages?

– Initial high costs (in R&D and advertisements)
– Company had to educate consumers about the products due to
unfamiliarity.
– Sometimes has to price down to encourage purchase.

• Late entrant advantages?

– Can avoid high market and/or product development costs.
– Can avoid mistakes made by early explorers.

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Early Entrants: The Pioneers

American’s Pionering company

• Wrigley Chewing gum, Lipton tea, Coca-cola,
Nabisco biscuits, Gillette razor, Goodyear tires
and Singer sewing machines.
• From 1923-1983, they remained no 1 in the
industrial ranking!!!

Note from WBLE: Read Article Pioneer

Advantage: Marketing Logic and Marketing
Legend.

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Flexibility In Innovation

Ex: The discovery of carbon fiber (exceptionally

high tensile strength but lighter than aluminum).

• Western countries uses top-down approach

– immediately did researches on its application
in aircraft industry (difficult area).
• Japan uses bottom-up approach.
– uses it to manufacture golf clubs and fishing rods (easy
application).
– By doing this, Japan controls 70% of the world
production of carbon fiber today.

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 Chapters
1. Detailed Assessment and Planning ( 始计 )
2. Waging War ( 作战 )
3. Strategic Attack ( 谋攻 )
4. Disposition of the Army ( 军行 )
5. Forces ( 兵势 )
6. Weaknesses and Strengths ( 虚实 )
7. Military Maneuvers ( 军争 )
8. Variations and Adaptability ( 九变 )
9. Movement and Development of Troops ( 行军 )
10. Terrain ( 地形 )
11. The Nine Battlegrounds ( 九地 )
12. Attacking with Fire ( 火攻 )
13. Intelligence and Espionage ( 用间 )

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 Chapter 7
Military Maneuvers ( 军争 )

Chapter Outline
• Tradeoffs in maneuvering
• Rules of manoeuvring
• Principles of control
• Business application: Stay upper-hand and in
control

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 Tradeoffs in Manoeuvring

• In any military campaign, the general will first

receive his orders from his ruler.
• He then assembles the troops and mobilises the
citizens (people).
• He must harmonise (the interest of) these diverse
groups and build their relationships and
comradeships by encamping them together.
• However, none of these are more difficult than
military manoeuvres (that are aimed at gaining
victories against the enemy).

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 Tradeoffs in Manoeuvring

The challenges of military manoeuvres:

• Turning torturous and difficult routes into direct
accesses (to the enemy)
– This can be achieved by derailing the enemy with baits
as well as inflicting damages.
– Turning disastrous circumstances into advantageous
situations.

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 Tradeoffs in Manoeuvring

• If an army has to travel 100 miles to contend for

gains, only the fittest 10 percent would arrive at
the destination first.
– The rest of the army will be scattered over a vast area.
– Being separated by time and space, the vulnerability to
enemy attacks becomes extremely high.

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 Tradeoffs in Manoeuvring

• It can also travel 50 miles ton contend for

advantages against the enemy.
– In this case, the general of the vanguard will be
humiliated and defeated.
– This is because only half the troops will arrive at the
destination.
• If the army has to travel 30 miles to contend for
advantages against the enemy, then only two-
thirds of the troops will arrive at the destination.

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 Prerequisites for Combat
1. Heavy equipment and supplies.
- Better equipment and supplies will boost the chances of
victory. These are typically supplied from home.
2. Sufficient food and grain.
- Since war is a very costly exercise and therefore should
be completed in the shortest time possible.
- To ensure there will be no shortages and avoid from
going beyond second replenishment of food and
supplies.
3. Sufficient stockpiles and reserves.
- To cushion against any possibility of protracted war
campaign.

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 Prerequisites for Combat
4. Know the intentions and plans of the neighboring states
before entering into any strategic alliances.
- There is no such thing as a consistently trustworthy and
friendly neighbour.
5. Understand the characteristics of the terrain that your
troops are moving through.
- Harsh terrain can pose severe threats to your army.
- Some difficult terrains may provide opportunities for the
enemy to lay ambushes, booby traps, create obstacles or
sabotage your army movement.
6. Use the services of local guides as a way to overcome the
terrain and exploit it.

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 Rules of Manoeuvring
1. Be swift and invisible as the wind when in movement.
(speed)
2. Be as majestic as the forest when in slow marches.
(formation)
3. Be like fire when raiding and plundering. (ferocity)
4. Be like mountains when encamping. (steadiness)
5. Be like the darkness of night when in concealment.
(secrecy)
6. Be like thunder and lightning when attacking and
assaulting. (ruthlessness)
7. Be generous after looting and plundering. (sharing)
8. Be willing to share the gains when occupying conquered
territories. (rewards and motivation)

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 Communications & Signals in Combat

• As verbal communication cannot be heard clearly,

cymbals and drums are used as commands.
• As visual communication and eye contact are
hampered, banners and flags are used as signals.
• The purpose of using cymbals, drums, flags and
banners:
– to draw the attention of the troops and focus them for
combat under the direction of the commander.
– to denote the different formations an divisions of the
army.
– to boost army’s morale and frighten away the enemy.
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 Communications & Signals in Combat
For battles at night, use more
torches and drums.
For battles in the day, use more
banners and flags.

• These different means of

communication are designed to
influence the senses and judgment
of the enemy.
– to destroy the morale of the enemy’s
army & rob them of their
decisiveness.

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Communications & Signals in Combat
• Choose the right
communication tools to
match their circumstances
at hand.
• Sophisticated
communication tools in
modern war:
– radar, satellite system.

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 Principles of Control
• At the beginning of a military campaign:
– the spirits of the forces are high.
• As the campaign progresses:
– the spirits of the forces become sluggish and lethargy
creeps in.
• Towards the tail-end of the campaign:
– thoughts of returning home (base camp) will set in.
• Therefore in warfare:
– avoid attack the enemy when their spirits high.
– only attack the enemy when their spirits are sluggish
and the soldiers homesick.
This is control of the morale factor.
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 Principles of Control

• Use orderliness and stability to confront chaos and

disorder.
• Use calmness and steadfastness to deal with noisiness and
clamour.

This is control of psychological factor.

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 Principles of Control
• Use proximity (of troops) to the battlefield to counter
enemies that come from afar.
• Use well-rested troops to counter tired and exhausted
enemies.
• Use well-fed and nourished troops against enemies who are
short of food and rations.
This is control of physical factor.
• Never engage an approaching enemy who displays orderly
flogs and banners.
• Never attack an advancing enemy who shows an
impressive and well-organised formation.
This is control of change factor.
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 Illustrations on the Art of
Military Manoeuvres
• Do not advance against an enemy who is encamped on
high grounds.
• Do not engage an enemy who is assaulting downwards
from high ridges.
• Do not pursue an enemy who pretends to retreat in
desperation.
• Do not attack the agile and highly motivated elite force of
the enemy.
• Do not fall for bait offered by the enemy.
• Do not intercept an enemy who is returning to his home
country.
• In surrounding an enemy, always leave him an escape
route.
• Do not pursue a desperate enemy too relentlessly.

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 Summary

• Military Maneuvers explains the dangers of direct

conflict and how to win those confrontations
when they are forced upon you.

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Business Application

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 Government’s Role in Business World
• Government:
– to facilitate and assist the growth of business
(to achieve national economic growth) and
NOT to directly manage them.
– is constrained by multiple objectives, including
welfare-oriented goals (not an optimal
solutions/profit oriented)
• Business:
– are driven by profits and therefore should be
more responsive to changes in business world.

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 Government’s Role in Business World
Example:
• Japan, Taiwan and South Korea governments are very
active in assisting and facilitating their business
conducts (market-driven economy).
– Japan government had rescued KANEBO from
bankruptcy due to unethical misconduct in the company.
• UK government had rescued some industries in the
1970s when they ran into financial difficulties.
• MALAYSIA???

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 GM

• America's biggest carmaker, General Motors,

declared itself bankrupt & massive reorganisation
of GM would leave the US government holding
60% of the company's equity.
– The carmaker has received $19bn of emergency aid
from the treasury to keep it afloat and a further $30bn
of government funding is likely to be forthcoming to see
it through bankruptcy.

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 Business Maneuvering
• Maneuver is a way of thinking about:
– how you move to a position of competitive
advantage (the ability of the firm to outperform rivals
on the primary performance goal, e.g. profitability)
– putting your competitors at a disadvantage.
– must know & understand how to attack specific
segments, markets, or areas where you can
win.

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Main Types of Competitive Advantage

Cost
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leadership
d uct
pro st advantage
advantage
ila r
Sim er co
ow
Competitive at l
Competitive
advantage
advantage Hig
for he
un rp
iqu ric
ep e
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t Differentiation
Differentiationadvantage
advantage
 Competitive Advantage

• According to Michael Porter, competitive

advantage leads to higher profits, will result
either from:
1. Differentiation of products (distinctive, more
product features) and selling them at a premium
price:
• Porsche, Barabus, Rolls Royce, Rolex, Tag Heuer,
Tissot, Haagen Dazs, etc.
2. Cost leadership (producing products at a lower
price than competitors)
• Air Asia, Giant, Tesco, Walmart etc.

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 Maneuver Varieties in Business
• Frontal attack - Direct assault to competitors.
• Flanking attack - Concentrate strengths against
weaknesses.
• Attack in echelon - Concentrate in your strengths.
– Gain market share with a strong or unique product, and
building up your brand strengths.
– Ex: Franchise systems reinforce brand name, identity,
products, and services are standardize to all locations.
• Relocate the battle - Finding a new war.
• Fabian - Refusing battle, do not engage in
competitive advertising and to use the funds for
another activity.

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 Maneuver Varieties in Business

• Example of attack in echelon - concentrate in

your strengths.
• Franchise systems reinforce strengths – brand
name, identity, products, and services are
standardize to all locations.

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 Communication in Business

Individuals spend nearly 70% of their waking hours

communicating (writing, reading, speaking, listening).
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 Communication with Customers

• You have to speak the customer’s language.

• You must listen to customers to understand their
problems and unmet needs.
– Deal with customers’ needs from different directions.
– Open-minded customers like a variety of reasons (to
justify their purchase)
– Find a new reason to buy that the customer’s hasn’t
thought before.
– Words alone not enough. Use pictures, charts, props,
showmanship and magic to get customer’s attention.

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 Advertising: Instrument to
Communicate with Customers
What were P1W1max messages?

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 Communication in Business
• Great CEO should posses great skill in communication:
– Appropriateness, identity, use multiple means and
adaptability.
– Honda of American Manufacturing, which operates
in a hostile environment (USA), had communicate
change very carefully and allowed employees to
know constantly about the changes and cultivated
it as a natural occurrence.

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 Hierarchy of Media Richness

Rich

Media Richness
Overloaded The data-carrying
Zone capacity of a
comm. medium,
Media including the
Richness volume & variety
of info. that can
be transmitted
during a specific
Oversimplified time.
Zone

Lean

Nonroutine/
Routine/clear Situation Ambiguous 68
 Dealing with Customers
(Control of the Morale Factor)
• In the morning, customers resistance is high.
• During the day it fades.
• By evening, customers want to go home.
• You must use your time wisely. Avoid tough
resistance.
• Close the deal when the resistance fades and
customers want to go home.

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 Rules in Making Sales
• Do not take positions against strong feelings.
• Do not fight an argument based on a lack of alternatives.
• Do not accept those who only pretend to agree.
• Do not attack your strongest competition.
• Do not believe everything the customers tells you.
• Do not argue with customers who agrees with you.
• Give the customer an agreeable alternative.
• Don’t press the customer too hard for a decision.

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-The End-

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