Of course, it was Sun Tzu who introduced the concept of Maxi-Min in his colossus Art of War. Both in military and business strategy this concept is applied with great success. In brief, maximin means maximum results obtained with minimum loss. China is the best example of a country that puts this concept to work for them:
There are several permutations & combinations of maximin seen today. One is to spend considerable time in planning for something and in contrast spend little time implementing the plan to get best results. Students spend lot of time in preparing for an examination that allows them to write the required answers within 3 hours or so to pass. All these are on the positive side.
Ostensibly, there is negative side too. A hasty man spends no time in planning to get into action and regretting thereafter for a long time counting the cost. Marketers go on quick campaign spending quite a big sum in the beginning and get nothing at the end. Arguably, firms allocate maximum resources on a project that finally garners fewer gains.
The best positive victory that comes to my mind is the high speed rail network of China which has reached the number one slot in the entire globe. For all that at the beginning of this century China did not have anything to boast of as a reasonable rail network. Oriented towards maximin concept, China selected high speed rail network as an important arm in her business strategy of ushering in the China Dream.
Understanding the ground fact that 80% of time must be spent in the planning process, it took China almost a decade to bring out the desired rail proto type by 2010. Experimenting one after one, patiently checking every part of the system working in sync, China introduced the game changing high speed rail network. Not only that, a comprehensive long term plan was set in motion as follow up measure to periodically connect more and more destinations as the network being expanded.
Today China boasts the largest high speed rail network in the world extending 24,000 miles of rail network which would almost double by 2035. The present speed of the rail of 220 mph is to be up ticked to 350 mph by 2035. More than 75% of cities with a threshold population of half million are connected to the network, resulting in more than 1.75 billion passengers being served at present and many others in the near future.
Surprisingly, the fare levied is one-fourth of global average. The annual return on investment is pecked at 8 % p.a. which is well and above global opportunity cost for projects of this kind. The chief driver for the premium return is in-situ cost of the rail network which being amortized. Can you believe that China has the lowest capital cost of rail network in the world? She spent only 12 Million US Dollars for mile for railway track, which is about one third of the global average.
Maximin business strategy is really the boon granted to the Chinese nation by the master strategist Sun Tzu!
Cheers!
Muthu
Ashraff Rajulu
Business Strategist
Mobile: + 94 777 265677
E-mail: cosmicgems@gmail.com
Blog: Business Strategist
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