Stratagem 11:Shut the Door to Capture the Thief.
“When dealing with a small and weak enemy, surround and destroy him. If you let him retreat, you will be at a disadvantage in pursuing him.”
—From The Thirty-Six Stratagems
Your customer is a capricious friend, quick to sample your competitor’s offer. You may wonder what she says about you in private or whom she visits when she’s out of sight. For much of her life, you cannot see or influence her. But you do enjoy moments of control. If you can recognize and capitalize on these moments, you may seize a profitable advantage over your competition.
As the 1990s began, for example, Barnes & Noble embraced a new concept in book retailing that would transform its industry. Until then a bookstore was for buying books: The customer knew
what he or she needed, visited a store, asked for the book, purchased it, and walked away.
Barnes & Noble recognized it was forfeiting a moment of control by too easily letting customers to walk out of its doors. By thinking through what else a customer might want to buy while inside a store, it conceived of a web of new businesses to surround its clientele. Barnes & Noble expanded the book-shopping experience to include comfortable couches for browsing, a café offering food and drink, children’s play areas, and larger magazine and music sections. The company widened its aisles and scattered reading chairs throughout to encourage clientele to linger. If the amount a customer spends depends on the number of products available for purchase and the amount of time she or he browses in a store, Barnes & Noble multiplied both parts.
Barnes & Noble’s new “superstores,” at six times the size of traditional bookstores, redefined the experience and economics of the bookstore. In 1989 Barnes & Noble operated 23 superstores; today they run more than 700. Superstores generate 85 percent of the company’s sales.24
Like most significant innovations, the book superstore concept now seems obvious. It seems a simple enough exercise to explore what else you might sell store visitors. Yet before Barnes & Noble, no major book retailer had answered the inquiry with courage. The inquiry transformed an industry and generated millions in profit and value.
Nearly 10 percent of the decade’s most competitive companies I studied have applied this stratagem to secure advantage. The Capita Group, the United Kingdom’s leading business-process outsourcing firm, has grown its revenues 2,000 percent in ten years by systematically adding new services it thinks customers will need, from the common (back-office administration and HR outsourcing) to the complex (IT integration and facility design). Retailers Ross Stores and H&M have outgrown their peers over the past ten years in part by answering the question: What else might our customers need once they are in our stores?
Nintendo Shuts the Door to Secure Success
Consider how Nintendo capitalized on its strength early in the video game wars. As a pioneer, and early leader, Nintendo commanded the largest user base of any game console manufacturers. This made Nintendo the software developers’ favorite platform. Developers could make much more money writing programs for Nintendo than they could anywhere else.
Of course, Nintendo also depended heavily on its game developers. It needed an attractive library of proprietary games to maintain its lead. So the company decided to exert its power over game
developers, not by attacking them directly (e.g., by taking them over) but by containing them. Nintendo built a security chip into its console to prevent gamers from using software from other systems. As a result, developers could not reach Nintendo consumers by developing for other platforms. This tactic forced developers to sign exclusivity agreements that prevented them from selling a title to another company for two years after it had been released on Nintendo.
Software developers had two options: They could build software for non-Nintendo consoles with no hope of selling to Nintendo’s wide user base, or they could write for Nintendo exclusively. Developers consistently and logically chose option two.
By shutting the door on developers, because developers had no freedom to sell to others when Nintendo was the only game in town, Nintendo was able to set up a barrier to entry that extended its competitive lead for years.
Qin Shuts the Door on Zhao
In 260 BC, the armies of two great states, Qin and Zhao, met in a decisive battle. By seizing on a moment of weakness, Qin shut the door on—and, as a result, soundly defeated—its enemy.
The armies of Qin and Zhao were locked in an even battle when the Zhao army replaced its experienced commander with a less experienced but promising new one. The Qin general saw this switch as an opportunity to apply the stratagem Shut the door to capture the thief.
The Qin army attacked the Zhao army and then feigned a retreat to draw the Zhao troops in pursuit. The new Zhao commander pushed his troops in pursuit into Qin territory. But he soon realized his mistake. The Qin army had retreated to the sides rather than straight back and had reassembled behind the Zhao forces. The Zhao general and his 40,000 troops were surrounded. The army tried to retreat, but the Qin had trapped them.
The Qin did not close in for the kill. They held their position for over a month, during which time the Zhao army repeatedly tried to break Qin’s grasp. Qin never gave in but never closed in either.
As supplies ran low, the Zhao soldiers grew weak. Without outside communication, they grew desperate. Finally, after forty-six days, the Zhao commander gathered his best troops and made a final attempt to break out. He died in the process.
With the Zhao soldiers leaderless, hungry, and desperate, the Qin marched in and slaughtered the remaining Zhao soldiers, thus ending the long rivalry.
“That the impact of your army may be like a grindstone dashed against an egg—this is effected by the science of weak points and strong.”
—Sun Tzu, The Art of War25
