Stratagem 36:The Stratagem of Linking Stratagems
“When the enemy possesses a superior force, do not attack recklessly. Instead, weaken him by devising plots to bring him into a difficult position of his own doing. Good leadership plays a key role in winning a war. A wise commander gains Heaven’s favor.”
—From The Thirty-Six Stratagems
Many credit the iPod’s success to Apple’s creative ethic. Unconventional design choices—a flywheel, no on/off switch—surely made for a radically aesthetic product. Inventive marketing practices such as highlighting the iPod’s white earphones, instead of the device itself, surely contributed to the generation of early buzz about the product.
But a careful dissection of the iPod’s rise reveals numerous stratagems at work. Steve Jobs’ creativity extended beyond the technology and into the business. Apple built and launched a set of interlocking strategies that deflated competitive resistance. If you had wanted to compete with iPod when it was launched, consider what you would have had to contend with:
- If you were Sony, you’d have been stuck with a conflicting agenda. Your consumer electronics group would have wanted to introduce a hard drive–based MP3 player like the iPod, but your entertainment business would have resisted. This is Stratagem Seventeen, Seize the opportunity to lead the sheep away.
- If you had been open to introducing a hard drive–based player, you would have been unable to match the iPod’s size, because Apple had secured exclusive rights to a new hard drive capable of storing more songs in less space than previously possible. There would also have been music content that you could not have made available in your online music store because Apple had secured exclusive rights to some music content. This is Stratagem Ten, Remove the firewood from under the pot.
- Even if you could have gotten your hands on a small hard drive, you would have been forced to battle Apple on two fronts. Apple initially marketed the iPod only to consumers who owned an Apple computer (the iPod was initially compatible only with the Mac). Unless you had had a similarly strong business to link to your device, you would have faced unfair odds. This is Stratagem Seven, Besiege Wei to rescue Zhao.
- You would have to struggle to secure a music library as large as that which Steve Jobs rapidly lined up by his effective use of Stratagem Six, Kill with a borrowed knife: He convinced music labels to give his iTunes music store a robust music catalog by using the threat of illegal digital music–sharing sites.
- If you had been able to launch a successful competing product, Apple would have made sure you remained on shaky ground by repeatedly implementing Stratagem Twenty, Let the plum tree whither in place of the peach, because the company is comfortable cannibalizing its products to prevent competitors from doing so first. In January 2004 Apple launched the iPod Mini, a lowercost alternative to the iPod. One year later, in January 2005, it launched the Shuffle, an even smaller and less-expensive alternative. In September 2005 Apple replaced the Mini with the Nano. This was followed one month later by the Video iPod. Keeping pace with Apple is tiring.
Apple sets up a long line of barriers for its competitors to surmount. It continues to erect them, ensuring that its competitors’ success comes only after considerable persistence and creativity.
Selling Software?
Microsoft, long an Apple rival, has grown as a result of a competitive ethic not unlike Apple’s. Microsoft, of course, has succeeded far longer and on a greater scale than Apple. It executes multiple creative strategies across value chains, markets, and levels (from corporate strategy to operating tactics).
The company’s core strategy is Stratagem Seven, Besiege Wei to rescue Zhao, which takes the form of one business contributing to the success of another (e.g., Windows contributing to the success of Microsoft’s ISP, MSN). But Microsoft executes multiple strategies around this core strategy to confuse, frustrate, and outmaneuver its opponents.
- If you are profitable, Microsoft may sacrifice its own profits to win consumer loyalty, forcing you to give up your profits as well (Stratagem Two, Exchange a brick for a jade).
- If you beat Microsoft to market with an innovation, Microsoft may reveal its intention to soon make a similar innovation, thus drying up your supply of customers and investors (Stratagem Twenty-One, The stratagem of the open city gates).
- If you do launch your innovation successfully, Microsoft may let you proceed, and then launch a competing product only after you have proven your innovation to be successful (Stratagem One, To catch something, first let it go).
- If you command an advantage in your market, Microsoft may force you to play a different game, one it knows it can win (Stratagem Three, Invite your enemy onto the roof, then remove the ladder).
- If you are competing for distribution, Microsoft may use its cash to build influence over distributors, as it did to influence retailers (Stratagem Thirteen, The stratagem of the beautiful woman).
- Even if you win a battle, Microsoft may persist, launching small incursions that build its knowledge of your market and that incrementally erode your lead, until it overtakes you (Stratagem Fourteen, Beat the grass to startle the snake).
Competing with Microsoft or Apple demands agility. Both are opponents that will come at you from multiple directions and will keep rising from the mat until you are too overwhelmed to keep up.
Designer Stratagems
Linking stratagems also means combining stratagems to create entirely new ones. This will gives you the power to generate nearly endless streams of moves. As Sun Tzu wrote, combining tactics can give rise to “an endless series of maneuvers. . . . It is like moving in a circle—you never come to an end. Who can exhaust the possibilities of their combination?”96
As an example, consider the “disruption” strategy heavily promoted by business strategists today: pursuing an approach that competitors will not copy because copying it would expose them to attack from other players in the market. This is the explanation often given for the successes of strategically innovative companies such as Southwest Airlines and Ikea, the furniture-store chain.
The Thirty-Six Stratagems would explain this strategy as being a combination of two stratagems: Stratagem Twenty-Nine, Clamor in the east; attack to the west, and Stratagem Six, Kill with a borrowed knife. First, attack your competitor in such a way that, in defending himself, he exposes himself to another attack (Clamor in the east; attack to the west). Then, rather than attacking your exposed competitor, let other players attack him (Kill with a borrowed knife).
If your competitor defends himself, he will be attacked by other players in his industry, weakening him and potentially forcing him to call off his defense against you. If your competitor decides that this makes it not worth defending against your incursion, you can move in unhindered. Either way, you win. If your competitor defends himself, he exposes himself to attack from other competitors.
The Generals’ Three Strategies
The prince of Chu was being held prisoner by the state of Qi when his father died. He naturally wanted to return home to claim his throne. But the king of Qi demanded a high price for his freedom: The prince of Chu, soon to be the king of Chu, would have to give up great stretches of Chu’s eastern lands to the kingdom of Qi. The prince reluctantly agreed.
After returning to his home and taking the throne, the new king of Chu faced a dilemma. A regiment of Qi soldiers had approached the Chu border, demanding that the king make good on his promise and surrender the eastern lands. The king was unsure how to deal with his promise whether or not to fulfill. So he summoned three of his generals to ask their advice.
The first general believed the king’s only option was to give up the land and later attempt to recapture it. He argued that a king’s ability to rule depends on his reputation. If the king proved his word to be of no value by refusing to give up the eastern lands, his authority would be jeopardized. This general offered to travel to the Qi regiment on the Chu border and surrender the land.
The second general argued that the king should defend the land at any cost because it was too large a parcel to give up. The state’s strength depends on its size, so giving up so much would be a disservice to the king’s people even if it cost him some face. The general offered to lead troops to defend Chu’s eastern borders.
The third general argued that Chu should seek an ally to help defend the land. He agreed with the second general that the land was too large to give up but feared Chu was too weak to prevent Qi from taking it. He offered to lead a diplomatic mission to a large neighboring state, Qin, to request help defending Chu’s eastern land.
The king thanked the generals for their advice and dismissed them. He thought about his three options and decided not to choose among them. Rather, he decided to pursue them all.
The next day, the king ordered the first general to do as he had suggested and travel to the Qi regiment waiting on the Chu border. He was to announce to them Chu’s intention to give up the land as promised. The general was pleased and left with a contingent of soldiers.
The following day, the king told the second general that he agreed with that general’s advice; the land was too high a price to pay for keeping a king’s word. He ordered this general to follow his own suggestion and lead troops toward Chu’s eastern border to prepare to defend against an attack from Qi.
On the third day after his initial consultation with the three generals, the king told the third general to do as that general had suggested, and to lead a diplomatic mission to neighboring Qin to request assistance. This general assembled a small mission and set off for Qin.
The Qi were confused by the mixed messages they were getting from Chu’s actions. One Chu general had approached them to surrender the land. But a day later, a second general was preparing to defend it. They decided it was time to bring certainty to their situation, so they sent for reinforcements and planned to take Chu’s eastern lands by force.
When Qi’s reinforcements arrived, the king of Qi was with them. He had planned to lead his army into battle himself.
As Qi’s and Chu’s forces lined up opposite each other and prepared to converge, the third general appeared. He was escorting Qin troops, led by a Qin general, who was ready to join forces with Chu.
Outnumbered, the king of Qi called off his attack. The Chu’s eastern lands were preserved.
