Roads and Positions
Sun Tzu said, “When in difficult country, do not encamp. In country where high roads intersect, join hands with your allies. Do not linger in dangerously isolated positions. In hemmed-in situations, you must resort to stratagem. In desperate position, you must fight. There are roads which must not be followed, armies which must be not attacked, towns which must be besieged, positions which must not be contested, commands of the sovereign which must not be obeyed.”
Joining with Allies
In business, these are great principles to live by. Sun Tzu says to join with allies on the high road. In business, that would mean to join forces with someone that has technological advantage. You want to have an ally that is also on the high road. You do not want to have allies that are in commodity businesses. You want to be with a company that is secure and has barriers of entry to keep out competitors.
Isolated Positions
You should not stay in dangerous isolated positions too long. You may be trying to be invisible and that is good, but you shouldn't just linger in a dangerous position. In business, it may be necessary to do something dangerous. For example, you may have to work with the competition that is trying to subvert your plans. Two companies may have both bid on separate parts of a larger contract and then they must work together. One company may be trying to get the ideas and knowledge from the other. This is dangerous ground. In this situation, employees should be warned about keeping plans secret and the time spent with the other company should be limited. Suppose you just sat around and made friends with the competition thinking they were harmless. They may take your ideas and run with it.
Hemmed In
If you have an escape route, but it is difficult to use (for example, steep mountain), you are hemmed in. If you are hemmed, you should use strategem. That means you should first try and keep the enemy from advancing. You should keep the enemy from gaining more soldiers.
In business, you might use strategem when you are hemmed in as well. Suppose you are going to face a difficult opponent and yet the escape route is also very difficult. You could fight the big battle or just try and stop the enemy by balking their plans. Ford is a great example of this concept. They have always had lots of cash on hand for emergencies. Ford has always had better management than GM or Chrysler. Ford knew that one day, that mountain of cash would be necessary to keep the company afloat. When Ford realized that many of their suppliers were suffering, they decided to help them. Ford is the company that went to congress and told them that Gm and Chrysler needed help. Ford was really hemmed in. They were losing tons of sales and didn't have many options. They could develop some new technology (i.e. difficult) and that was the escape route. Instead, they decided to balk their opponents. They knew how unfavorable the American people looked at getting bailout money. Then, they helped Chrysler and GM get a mountain of it. Now, Ford is seen as a stronger company than Gm and Chrysler. There are millions of people that now like Ford better than Gm and Chrysler based on the bailout alone. The other great thing is that Ford also helped their suppliers by helping Gm and Chrysler. It was a real win for Ford. And, not many people know that Ford was so helping in the process. Ford is stopping the competition by helping them. It is a real irony and genius work.
Desperate Position
If you must fight or die, that is a desperate position. If there is no outlet, than you must fight to the death. If you have no outlet and are under attack you are in a desperate position.
In business, one example of someone in a desperate position was Kmart. They went into bankruptcy and started shutting down lots of stores that weren't profitable. They lost a lot of market share. They were badly beaten up by their competitor Wal-Mart. The think Wal-Mart would do is to put a store right next to Kmart knowing that they had the advantage and would win. Kmart couldn't just run away. They were in a desperate position. Their only course was to fight back. What they did was go into bankruptcy and remove a lot of dead weight stores. Then, they merged with Sears which brought into the company much needed capital and knowledge. The fact that Kmart survived as long as it did is amazing. Wal-Mart, the more worthy competitor was beating them up on every level. Since their resources were not as great as Wal-Mart they have fought back by joining with Sears. Both Sears and Kmart would like to usurp the power of Wal-Mart.
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