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Stratagem 31:Fool the Emperor and Cross the Sea


“The perception of perfect preparation leads to relaxed vigilance. Familiar sights lead to slackened suspicion. Therefore, secret machinations are better concealed in the open than in the dark, and extreme public exposure often contains extreme secrecy.”

—From The Thirty-Six Stratagems

Industries tend to focus on a common set of variables to monitor competition. The television industry focuses on ratings; the pharmaceutical industry on new patents; and investors on transactions. If you are particularly careful not to disturb these variables, you can hide your actions in them. This is moving under the cover of stillness.

As an example, consider Krupp AG’s 1991 acquisition of Hoesch AG in Germany. Throughout the 1980s, Krupp courted Hoesch with proposals of friendly mergers, all of which were rejected. Krupp nevertheless believed that a merger would be beneficial, perhaps even necessary, so it chose to pursue a more aggressive tactic. It decided to attempt to take over Hoesch by buying a controlling interest in the company.

Krupp knew, however, that Hoesch could easily mount an effective defense if it became aware of the plan. Krupp also knew that industry players would look for evidence of such takeover intentions in financial transactions, such as unusually concentrated purchases of Hoesch’s stock. Therefore, the company had to find a way to hide its stock purchases and fend off a defensive response by Hoesch.

Both Krupp and Hoesch are German firms and, as such, practiced the “house bank” tradition, whereby a company maintains close ties with its primary bank. Typically, a German company’s house bank is a significant shareholder in the company, sits on the company board, and is involved in upper-level management. In order to hide its actions, Krupp would have to deviate from this tradition. It did not inform its house bank or any of its major banks of the actions it was about take.

Over the course of six months, Krupp slowly and anonymously purchased Hoesch shares through a Swiss bank. Because the stock purchases appeared to be normal, everyday transactions, Krupp was able to collect 24.9 percent of Hoesch without triggering suspicion. By the time Krupp announced its holdings in October 1991, it was too late for Hoesch to defend itself effectively or for competitors to provoke a bidding war. Krupp successfully gained control of Hoesch by hiding its unusual actions behind a veil of normalcy.

The Walt Disney Company employed the same tactic when it purchased land for Disney World in the 1960s. Had landowners discovered that Disney was purchasing 30,000 acres of land in Florida, land prices would have risen quickly. By assembling the land from pieces purchased anonymously, Disney hid its intentions and avoided paying premiums.

Lulling an Opponent with Repetition

In the late 500s, the founder of the Sui dynasty defeated the northern kingdoms and decided to expand his successful military campaign south of the Yangtze River. He assigned a general named He Nuobi to lead his first southern effort: a siege of the Chen kingdom just across the Yangtze.

He Nuobi assembled an army and set up camp on the river’s edge just opposite Chen’s northern border. The Chen king ordered his troops to set up positions on the other shore in preparation for the attack. Both armies were poised for battle.

Soon, He Nuobi ordered his army to prepare for battle. At the sounds of the activity, the Chen army took their positions and prepared for an attack. The Sui army marched, drums beat, and dust rose into the air, but no attack came.

The Sui army was conducting maneuvers. These continued for several days. Eventually the Chen army grew weary of maintaining their vigilance. They grew accustomed to the sounds of war and stopped associating them with an attack.

He Nuobi had purchased boats and hidden them for just this moment. One evening, once he was sure he could move his troops without triggering a reaction from the Chen army, he quietly crossed the river. He and his soldiers reached shore at dawn and surprised the Chen forces. They easily defeated the Chen and established a foothold south of the Yangtze.


“8Ps” of StrategyOpportunity
for Disruption
Recommended Leverage Points
Position- The farmers, individual and corporate, that you are targeting.

- The need of the agricultural industry that you seek to fill.
3- What technologies do you control that can help you tap into market
segments that you previously thought unreachable?

- What are the potential business alliances you could think about with key players in the segment to serve your customers with integrated solutions? (Serving customers with more integrated solutions example: serving farmers with fertilizers, crop protection and other).
Product- The products you offer, and the characteristics that affect their value to customers.

- The technology you develop for producing those products.
8- What moves are your organization taking to implement Big Data and analytics to your operations? What IoT and blockchain applications can you use?

- What tools and technology could you utilize or develop to improve food quality, traceability, and

- How can you develop a more sustainable production model to accommodate constraints on arable

- What is the future business model needed to serve new differentiated products to your customers?
Promotion- How you connect with farmers and consumers across a variety of locations and industries.
- How to make consumers, producers, and other stakeholders aware of your products and services.
8- How are you connecting your product with individual and corporate farms who could utilize it?
- How could you anticipate market and customer needs to make customers interested in accessing your differentiated products?
PriceHow consumers and other members of the agricultural supply chain pay for access to agricultural products.7- What elements of value comprise your pricing? How do each of those elements satisfy the varying needs of your customers?
Placement- How food products reach consumers. How the technologies, data, and services reach stakeholders in the supply chain.9- What new paths might exist for helping consumers access the food they desire?
- How are you adapting your operations and supply chain to accommodate consumers’ desire for proximity to the food they eat?
- How could you anticipate customer expectation to make products more
accessible to customers/agile supply chain?
- Have you considered urbanization as a part of your growth strategy?
- How your food satisfies the needs and desires of your customer.
- How the services you provide to agribusiness fulfill their needs.
9- Where does your food rate on a taste, appearance, and freshness
- Could the services you provide to companies and farms in the agriculture industry be expanded to meet more needs?
- What senses does your food affect besides hunger? How does your
customer extract value from your food in addition to consumption?
Processes- Guiding your food production operations in a manner cognizant of social pressure.8- How can you manage the supply chain differently to improve traceability and reduce waste?
- How can you innovate systems in production, processing, storing, shipping, retailing, etc.?
- What are new capabilities to increase sustainability (impact on the environment, or ESG) components?
People- The choices you make regarding hiring, organizing, and incentivizing your people and your culture.- How are you leveraging the agricultural experience of your staff bottom-up to achieve your vision?
- How do you anticipate new organizational capabilities needed to perform your future strategy (innovation, exponential technologies needed, agile customer relationship, innovative supply chain)?
- How do you manage your talents to assure suitable development with exposure in the agrifood main challenges/allowing a more sustainable view of the opportunities/cross-sectors?