How to outthink outmaneuver and outperform your competitoer lesstion from masters of strategy

How to Outthink,
Outmaneuver,
and Outperform
Your Competitors
Lessons from the
Masters of Strategy

Norton Paley



How to Outthink,
Outmaneuver,
and Outperform
Your Competitors
Lessons from the
Masters of Strategy



How to Outthink,
Outmaneuver,
and Outperform
Your Competitors
Lessons from the
Masters of Strategy

Norton Paley


CRC Press

Taylor & Francis Group
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Boca Raton, FL 33487-2742
© 2013 by Norton Paley
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Version Date: 20130321
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To the next generation:
Isaiah, Natalia, Zeke

© 2010 Taylor & Francis Group, LLC



Contents
Introduction......................................................................................... xiii
About the Author.............................................................................. xxvii
Chapter 1 Apply Strength against Weakness:
Maneuver by Indirect Strategy........................................... 1
Maneuver by Indirect Strategy...................................................2
Developing an Indirect Strategy................................................4
Define Your Strategic Goals...................................................5
What Are Your Organization’s Distinctive
Strengths or Areas of Expertise?......................................6
What Business Should Your Organization
Be in over the Next Three to Five Years?.........................6
What Segments or Categories of Customers Will
Your Company Serve?........................................................7
What Additional Functions Are You Likely to
Fulfill for Customers as You See the Market Evolve?...... 7
What New Technologies Will Your Firm Require
to Satisfy Future Customer Needs?..................................8
What Changes Are Taking Place in Markets,
Consumer Behavior, Competition, Environment,
and the Economy That Are Likely to Impact Your
Company?............................................................................8
Determine the Resources Needed to Achieve Your Goal....10

Gather Competitive Intelligence.........................................13
Establish Security..................................................................16
Implemen�                  
Marketing research:
Cite any customer studies or market data that reveal opportunities for
new revenue streams.
                              
                              
Credit:
Include any programs that use credit and finance as a value-added service, such as providing financial advice or offering financial assistance to customers in specific situations.
                              
                              
© 2010 Taylor & Francis Group, LLC


264  •  Appendix 3: Strategy Action Plan
Technical sales activities:
Include any support activities, such as 24/7 hot-line assistance or onsite consultation to solve customers’ problems.
                             
                             
Research and development:
Indicate internal research and development projects, as well as joint
ventures that would complement the Strategic Direction identified
in Section 1 of the SAP.
                              
                              
Human resource development and training:
Identify specialized training and development programs to upgrade
the skills of those individuals who are responsible for implementing
the SAP.

                              
                              
Other:
Include any activities that would contribute to your organization’s
uniqueness, and thereby provide an indirect strategy to achieve a
competitive advantage.
                              
                              
Section 8: Strategies and Tactics
Overview

Strategy is the art of coordinating the means (money, human resources,
materials) to achieve the ends (profits, customer satisfaction, growth) as
defined by company policy, strategic direction, and objectives.
From another perspective, strategies are actions to achieve long-term
objectives; tactics are actions to achieve short-term objectives.
Therefore, in this section strategies and tactics are identified and put into
action. Responsibilities are assigned, schedules set, budgets ­established,
and checkpoints determined.
© 2010 Taylor & Francis Group, LLC


Appendix 3: Strategy Action Plan  •  265
Make sure that individuals involved with developing and implementing
the plans actively participate in this section.
Planning Guidelines

Restate the functional product and nonproduct objectives from Section 7
and link them to the strategies and tactics you will use to reach each
objective.

One of the reasons for restating the objectives is to clarify the frequent
misunderstanding between objectives and strategies. Objectives are what
you want to accomplish; strategies are actions that specify how you intend
to achieve your objectives.
Note: If you state an objective and do not have a related strategy, you may
not have an objective. Instead, the statement may be an action for some
other objective.
Objective 1:                           
Strategy/Tactic                       
Objective 2:                           
Strategy/Tactic                       
Objective 3:                           
Strategy/Tactic                       
Planning Guidelines

Summary strategy: Summarize the basic strategies for achieving your
primary objectives. Include alternative and contingency plans should you
come up against unexpected situations that prevent you from reaching
your objectives.
Note: You may choose to repeat this information as an Executive Summary
in the beginning of the plan.
As you develop your final strategy statement, use the following checklist
to determine its completeness. Also add those that are specific to your
industry and company.
Changes to the product or package, including differentiation and valueadded services
Strategies that create a competitive advantage, along with contingency
plans to block competitors’ aggressive moves
Changes to price, discounts, or long-term contracts that impact your
market share
© 2010 Taylor & Francis Group, LLC

266  •  Appendix 3: Strategy Action Plan
Changes to marketing strategy, such as the selection of features and
benefits, or copy themes to special groups
Strategies to reach new, poorly served, or unserved market segments—
along with indications of decisive points for entry and defense
Promotion strategies aimed at dealer and/or distributor, consumer, and
sales force
Internal changes in the operating systems, as well as initiatives that
would better align the corporate culture with your strategies
                              
                              
Section 9: Financial Controls and Budgets
Planning Guidelines

Having completed the strategy phase of your SAP, you must decide how
you will monitor its execution. Therefore, before implementing it, develop
procedures for both control (comparing actual and planned figures) and
review (deciding whether planned figures should be adjusted or other corrective measures taken).
This final section incorporates your operating budget. If your organization has reporting procedures, you should incorporate them within this
section.
Included below are examples of additional reports or data sheets for
you to consider. They are designed to monitor progress at key checkpoints
of the plan and to permit either major shifts in strategies or simple midcourse corrections:
Forecast models related to the industry, environment, ­competition, and
any other areas that are applicable to your company and your plan
Sales by channel of distribution, including
Inventory or out-of-stock reports
Average selling price (including discounts, rebates, or allowances),

along the supply-chain and by customer outlet
Profit-and-loss statements by product
Direct product budgets
Research and development budget
Administrative budget
Spending by quarter
© 2010 Taylor & Francis Group, LLC


Appendix 3: Strategy Action Plan  •  267
As an overall guideline—regardless of the forms you use—make certain
that the system serves as a reliable feedback mechanism.
Your interest is in maintaining explicit and timely control so you can
react swiftly to impending problems. Further, it should serve as a procedure for reviewing schedules and strategies.
The only other section in your SAP is an appendix. It should include the
following items:
Relevant industry data and market research that provide information
on trends, product usage, market share, and the like
Data on competitors’ strategies, including supporting information on
their products, pricing, promotion, distribution, market position, as
well as profiles of management leadership (if available)
Details about your new product features and benefits
In addition, various computer databases, as well as a wide variety of
customized or off-the-shelf software programs, are available to assist in
monitoring and strengthening your plan.
Final Guidelines

After completing your plan, take a thoughtful look at its key parts. For
instance, review the breadth of your strategic direction and be sure it
impacts the objectives, strategies, and portfolio sections that follow.

As for strategies, check to see that you have utilized the Lessons from
the Masters of Strategy cited in this book, such as developing an indirect
approach, acting with speed, concentrating on a decisive point, and moving to the offensive. Also, be sure you have backed up your strategies with
solid competitor intelligence.
At the same time, be absolutely certain that you have aligned the plan
with the culture of your organization. That means you have taken into
consideration your company’s history, its behavioral patterns, and leadership; the attitudes, temperaments, and skills of employees; their capacity
to confront aggressive competitors; and their ability to live with risk. Also,
determine if you have sufficient resources, including financial, technology,
and physical, to implement the plan.
Finally, to implement the plan takes leadership and your ability to reach
the hearts and minds of the individuals who are going to make it all
­happen. Good luck!
© 2010 Taylor & Francis Group, LLC



Business & Management / Lean Methods & Implementation / Leadership Strategy

Supplying you with a firm grasp of the roots of strategy, How to Outthink, Outmaneuver,
and Outperform Your Competitors: Lessons from the Masters of Strategy explains
how to develop the skills and strategies needed to compete in today’s volatile marketplace.
It interweaves the classic works of the masters of strategy, such as Sun Tzu, Carl von
Clausewitz, Mao Tse-tung, Niccolo Machiavelli, Frederick the Great, Napoleon, and other
renowned strategists.
The collective insights of these legendary strategists span 2,500 years of combative history
and have survived meticulous analysis by scholars. Applied to current competitive business
conditions, their time-tested rules and guidelines will prepare you to deal with such issues
as preventing competitors from disrupting your overall growth plans, protecting yourself
from a rival’s take-over strategies, and strengthening long-term customer relationships.

Whether you operate as a multinational firm maneuvering for position in a global arena,
or a regional business fighting an everyday battle for survival, the foundational principles
provided can reinforce your understanding and practice of strategy. The book defines the
historical origins of strategy and supplies timeless insight into how successful leaders have
implemented comprehensive strategy plans. It also explains how to
• Maneuver out of risky competitive situations and into renewed market opportunities
• Establish a defensible position in a hotly contested market
• Apply competitive business techniques to outperform your rivals
• Align competitive strategies with your organization’s culture
• Personalize a leadership style to maximize performance from your staff
The book includes three special features:
1. Strategy Diagnostic Tool—A structured system to help you assess your firm’s
competitiveness before committing valuable resources.
2. Appraising Internal and External Conditions—A comprehensive checklist to
analyze those key factors that can determine the success of your business plan.
3. Strategy Action Plan—A tested format that includes step-by-step guidelines for
developing a personalized business plan.
The lessons gleaned from military history and strategy can be indispensable in the
everyday management of your people and resources. By tapping into the universal logic
and historic lessons of strategy, you will fortify your ability to think like a master strategist
and add greater precision to your decision-making—thereby allowing you to outthink,
outmaneuver, and outperform your competition.

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