Bypass attack is only for the fittest

When elephants fight the frogs get trampled so goes Eastern wisdom. What happens when the same elephants do not fight directly but adopt bypass business strategy and attack each other indirectly? Same thing the small businesses as frogs get crushed once again. By and large Bypass attack is reserved for the fittest only.

Big businesses continue their cold war this time attacking opponents indirectly to surpass him or overthrow him similar to regime change practised by America. The attacking firm goes to the jugular vein of the defender in such manner that not only he loses big chunk of the market share but piles up huge cost in terms of resources employed in every conceivable market for defence.

This happened in 1971 when Colgate abandoned domestic market and started adding new products to its line in Europe and elsewhere to compete with Proctor & Gamble globally. This is apt business strategy in skipping a potent enemy in his fortified terrace and focusing on the outlying areas where he is weak, under-represented or without any presence at all.

Basic approaches in executing bypass business strategy are three-fold:

Diversifying into new perhaps unrelated products before the competitor does is the primary bold move. Pepsi cola used bypass effectively when it unveiled mineral water “Aquafina” long before Coca Cola came with a competitor brand “Dasani” which later fell foul with EU authorities as it said to contain borate exceeding the maximum allowable limit with potential health hazard.

Shifting the battle ground to newer territories where the attacking firm has favourable terrain or has familiar backyard. Here the bold move must be humongous and implemented with such a speed and ruthlessness that defending firm needs lot of time to respond to the situation. The Colgate move mentioned above qualifies under this segment.

Leapfrogging on technology is the third and perhaps the mightiest of all the moves that can happen under bypass business strategy.  Employing highly improved R&D and new generation technology a firm can make clean sweep of competitor’s customer base. This is what iPod did to Sony Walkman. But there are two essential conditions that the attacking firm must have to follow through. One is that its techno ability must not only be superior to what exists in the particular market but also gets updated in game changing methods periodically. Secondly the firm lust be nimble enough to translate newly acquire customer base to brand acceptance & loyalty.

 

Cheers!

 

Muthu Ashraff

Business Strategist

Mobile: + 94 777 265677

E-mail:   cosmicgems@gmail.com

Blog:   Business Strategist

DNA required for firms using flank attack business tactics

Flanking in military sense is a tactical manoeuvre adopted to disorient a strong opponent and breakthrough his ranks on the sides rather than in front. History records flanking can succeed when practised by brilliant commanders such as Julius Caesar, Napoleon Bonaparte and Sun Tzu. Flank attack as one of the business tactics is executed by many challengers. However to succeed firms need DNA as explained below:

1. Sun Tzu recommends flanking as a good tactic to gain access to the ranks of an opponent but cautions against denying liberty for the opponent to move out from at-least one side, lest he will be forced to fight with such ferocity that flanking army cannot sustain.  In business application firm can do flank at its pleasure but must leave some elbow room for the defender to counter-manoeuvre

2. Always target the number 1 or 2 in the competitor ranks whose weak spots are latent. Many large companies will have blind spots where they under-perform. This can happen in three ways. One is geographical where his presence is limited. Two he is not catering to particular segment in the market such as disabled people. Three his main product can be differentiated by the flanker without quick response by the defending company

3. Flanking is similar to double-edged sword that can cut both ways. Flanker can win easily at the beginning but as response slowly builds up he can be either ambushed or stands unable to pin-down the competitor. One way of ambushing is by the defender to bring out “flanker brand” that would be used to dismantle the new product of the challenger. Pinning down amounts to some kind of endurance test as leaders in industry will have more staying power to withstand pressure and turn the tables against the flanker

4. Firms bent on flanking must gather market intelligence and trends and bring out products that have the potential to gain market access and customer acceptance. Here are four examples of flanking successes:

For price sensitive consumers budget airlines offering no-frill air travel

For status sensitive car owners Lamborghini introducing luxury limited edition vehicles

Softsoap raising curtains on liquid body wash

Timex distributing its watches through drug stores

 

Cheers!

 

Muthu Ashraff

Business Strategist

Mobile: + 94 777 265677

E-mail:   cosmicgems@gmail.com

Blog:   Business Strategist

Demystifying frontal attack as business strategy

Military history is replete with sensational frontal attacks of armies led by brilliant commanders. The epic battle fought between Alexander the Great and Darius II of Persian Empire is indeed a startling example of frontal attack where Darius II fled the battle field leaving his army leaderless. In business strategy too, frontal attack is treated more with mystique and mystery.

As in war, a frontal attack involves pitting a challenger against the market leader who is not only strong but has the capacity to withstand and mount counter attack that can devastate the attacking firm. Because the point of attack is the strength of the leader and not his weakness, challenging firm runs a high risk profile between phenomenal success to total destruction in the market place.

Before undertaking frontal attack business strategy, firm must evaluate its power equation and the amount of resources in men, material and money it can marshal to carry out its attack. An absolute advantage can arise either from quantitative strength or more importantly in qualitative one up-man ship.

Secondly, challenging firm must appraise its edge over the leader on the basis of product, pricing and promotion arising from the use of innovative technology. A superior product at lower cost and heavily promoted can take daylight out of the leader. Once again I must repeat that a leader is not going to hang his boots. It is a fight between the best against the best where the competition is watched eye-ball to eye-ball the leader will resort to every business tactics to cut through challenger’s frontal attack business strategy.

Challengers mounting frontal attack can either have track experience and market following in the same product or previously unknown in this line.

Perennial frontal attacks take place between giants like Coca cola and Pepsi cola. For example when Coca cola introduced Diet Coke, Pepsi responded with Diet Pepsi to neutralize frontal attack. In the smartphone market Apple brought out iPhone and had remarkable success. Samsung came with surprisingly low cost but much more techy alternative of Galaxy amounting to a successful frontal attack.

Frontal attack by McDonald in taking on established coffee houses was a classic example where a company that was not previously known for coffee marketing challenging the leader in that segment, Starbucks. McDonald is a fat-food restaurateur and McCafe was one of the products served therein. But there were two tweaks in its business strategy: Firstly mode of distribution is drive thru and not the coffee house. Secondly McDonald marketed premium coffee at lower price. That was a massive assault!

 

Cheers!

 

Muthu Ashraff

Business Strategist

Mobile: + 94 777 265677

E-mail:   cosmicgems@gmail.com

Blog:   Business Strategist

How to win without fighting? Apply winning business strategy

In the market, competition is war. It can turn ugly when your business strategy does not focus on winning. Here are seven winning strategies that bring you the result you look for:  winning without fighting:

1. Market dominance is the foremost strategy. Here the business strategy is focussed on covering all the escape routes of the opponent and surrounding him in such manner that he has no liberty left. Wei Qi is the game that Chinese use as business strategy in their global reach

2. Checkmating is the second most practised business strategy whereby a number of moves and countermoves are made to the effect that the opponent can be easily attacked by even a minion. Chess is the game, most established firms use where the opponent is checkmated

3. Deterrence is yet another strategy where a firm puts its opponent on notice that any move on the part of him can bring massive response that can make short works of him in the market area. This is considered as veiled threat and often used when a competitor tries to bring forth an improved product as an affront to the firm

4. Dissimulation is a business strategy often resorted to by firms to conceal their real intention from the opponents. A typical Sun Tzu strategy, this makes the opponent clueless as to what he is fighting for and literally start punching in the air rather than competing in real sense of the word. Aftermath is simply wasting of time and resources. Consequently, the opponent is weakened to such an extent that at the end it is just “no show” for him

5. Deception is once again Sun Tzu strategy that is followed by companies like Google bringing out gadgets such as “Google Glass” so that her competitors such as Microsoft Bing can be deceived to get into unnecessary competition as regards to the new gadget. The end result is that Google is able to maintain its search engine market share un-assailed

6. Shifting the theatre is a sophisticated strategic move. When America imposes tariff on Chinese products imported into America, Chinese companies open factories in USA and produce and market the same items

7. Globalizing is the last and cosy business strategy which renders local competition useless by extending the market place to foreign climes. Most multi nationals adopt this strategy whenever they see threats emanating from competitors or even by government authorities. This also helps them to evade sanction regimes that are imposed by authorities against particular products in areas under their jurisdiction.

 

Cheers!

 

Muthu Ashraff

Business Strategist

Mobile: + 94 777 265677

E-mail:   cosmicgems@gmail.com

Blog:   Business Strategist