MANEUVER BY INDIRECT STRATEGY

With so much at stake and with so many internal and external forces at play when entering a market and confronting competition, the overriding approach that addresses the numerous market variables and competitive obstacles is the ability to maneuver by the indirect approach. It is the one prevailing guideline that is most likely to determine if the organization grows and prospers, or if it languishes as an also-ran. Thus, where maneuverability is needed and where it is skillfully applied, “who can exhaust the possibilities of their combinations?”

Maneuvering by indirect strategy operates along five dimensions:

First, the strategy consists of a series of actions whereby you apply your strengths against a competitor’s weaknesses. The essence of the move is that you position your resources so that your rival cannot, will not, or simply lacks the capability and spirit to challenge your efforts.

Second, concurrent with activating indirect moves against a competitor, your focus should be directed toward serving customers’ needs and resolving their problems in a manner that visibly outperforms those of your competitors.

Third, your aim is to achieve a psychological advantage by creating an unbalancing effect in the rival manager’s mind, whereby he or she vacillates in indecision. The intent is to disorient and unbalance the competing manager into wasting time and making costly and irreversible mistakes. Using distractions and false moves make it appear that you are launching your effort directly at the competitor’s strengths, whereas your true purpose is to target his or her vulnerabilities.

Fourth, make every effort to convince your competitor that continuing aggressive efforts will be too costly, with little or no chance of justifying the expenditures of people, money, and materials.

Fifth, fighting in the marketplace is not your intention. Rather, your aim is possession. That is, your purpose is to hold a long-term position in a target market, as gauged by attaining a market share objective, securing a position on the supply train, reaching a profitability goal, or similar metrics.

The concept of war does not originate with the attack, because the ultimate

object of attack is not fighting; rather, it is possession.

Clausewitz

All five applications serve the strategic purpose of reducing any resistance leveled against you. You can then utilize the full power of your resources without squandering them on strength-draining actions. From another viewpoint, the indirect strategy is an encounter of manager against opposing manager: your experience and skills pitted against those of your opponent.

The advantages and applications of the indirect strategy are illustrated by the following benchmark examples from past decades:

German and Japanese automakers first entered North America with small cars during the energy crisis. They shrewdly and skillfully avoided a direct confrontation in a market essentially neglected by domestic manufacturers during the 1970s, and poorly served during the 1980s and 1990s. Once embedded, they prudently expanded into full lines of cars covering all price segments of the market, with resounding success.

Miller Brewing Company correctly identified the light-beer category as an emerging market, which evolved into the largest segment of beer drinks, with Miller LiteTM.

Dell Computer started out by bypassing the traditional distribution channels through retailers and other intermediaries. Instead, the company sold directly to the end user with a build-to-order strategy, which complemented its low-price approach.

Apple Computer became a dominant factor in schools early on, specifically occupying that segment, which was left vacant by IBM, with computer hardware and software.

Wal-Mart originally opened its stores in towns with populations under 15,000, which were totally ignored at that time by the leading retailers.

With the abundance of classic business examples and credible military doctrine as evidence, it is now safe to conclude that there is never any justification for you, or any manager, to undertake a direct frontal approach by applying your strength against an opponent’s strength in today’s competitive market. Doing so is reckless in time and resources, violates the primary rule of indirect strategy, and rarely achieves its goals.

Further, a direct strategy means confronting a stronger competitor head- on where there is little or no differentiation in product features, quality, performance, and service; and where there is no perceived advantage in price, promotion, distribution, technology, leadership, or caliber of personnel.

A company that pursues a direct confrontation could end up with severe losses; in other words, a company that attempts to move head on against a competitor actively defending a market position can exhaust itself without reaching its sales, market share, or profitability goals. Should a company achieve some minor objective through a direct effort, such as scoring minimal sales or nominal market share growth, remaining resources will be inadequate for that company to move forward and secure enough market share to reach profitable levels.

He who knows the art of the direct and the indirect approach will be victorious. Such is the art of maneuvering.

Sun Tzu

 
Source
< Prev   CONTENTS   Source   Next >