Using Direct and Indirect Forces to Achieve Competitive Advantage

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Using Direct and Indirect Forces to Achieve Competitive Advantage

In the section "Direct & Indirect Forces" in Chapter 5 of Sun Zi Art of War, Sun Zi mentioned to use direct force to match the enemy and using indirect force to win the enemy. And in the next few sentences, he mentioned that the combinations of these two types of forces are infinite and its interactions and can produce wonderful results. So how do we apply this wisdom into business?

BUSINESS APPLICATION

Direct forces in war would be analogous to the quality or pricing of your services or products in business, factors that are easily replicated by rivals. The indirect forces in war would be analogous to the intangibles like branding (the feelings you want your consumer to be associated with when they use your product or services.) or service level in business. Now, quality and price can be easily mimicked but it is the intangibles that are difficult to replicate, it usually gives a business a sustainable competitive edge over his rivals and allows differentiation between products and services easily. Most commonly quoted example of a indirect force in business would be branding. We can see that brands are very difficult to duplicate and it takes a long time to build.

For instance, if you want a nice meal with romantic ambience, would you go to Burger King or McDonalds? If you want cheap food, would you want to go to a high-class restaurant with dedicated waiters? What makes you prefer a certain restaurant over others when what they serve to you are basically steaks?

Let us further the restaurant example. Imagine there two restaurants, they serve good sirloin steaks, beef from Kobe, extremely good gravy and same pricing. But one restaurants washroom is dirty and the other is extremely clean, almost to the extent of dust free. Which restaurant would you go to? Note here is that it does not cost much to have a clean toilet in your restaurant, but think of the immense attraction you would have on hygiene-conscious clients? So this is one way of using indirect forces to score a win over your rivals in business.

With that in mind, you can see that there are infinite areas of applying direct and indirect forces in your business. For example, the service level, the dressing of your waitress, the layout of the restaurant and so on. Use direct forces to replicate what your rivals are having and use indirect forces to differentiate yourself from your rivals. Now people may wonder,"Yes, we can duplicate what our rivals are having like equipments and raw materials if we have the money, but what if we do not have such budget?" My answer is that try to duplicate as much as possible, but concentrate of using indirect forces as well, because most of the time the benefits from the intangibles can cover the shortfall of benefits from the lack of tangibles.

In conclusion, by having different combinations of direct and indirect forces, you can have infinite strategies for your business.