|after world war ii, the japanese economy was in ruins, and
its industries highly uncompetitive. it was simply not
possible to compete head-on against the large western
business corporations. instead, the japanese manufacturers
chose to focus on making products that western manufacturers
ignored. thus, while these western giants were strong in
making the big models of cars, refrigerators, appliances,
motorcycles, photocopiers, etc., they were weak in making
the smaller models. in fact, in many cases, they ignored
making the smaller and cheaper models completely.
sensing the opportunities, the japanese manufacturers
chose to focus on making smaller ranges of cars,
motorcycles, refrigerators, photocopiers, appliances, etc.
here, it is important to point out that the japanese
products were not only cheap but also inferior in the 1960s,
and even in the early 1970s. however, as the competition
was not strong in the market for the smaller range of
products, the japanese manufacturers were even able to build
up their strengths over time.
similarly, the japanese manufacturers also went after
markets which the large western business corporations were
weak in, or completely ignored. for example, the american
manufacturers completely ignored the south-east asian market
as well as many other asian markets in the 1960s and 1970s.
instead, they chose to concentrate their strengths and
efforts largely at home, and in the canadian and european
markets. sensing the opportunities, the japanese
manufacturers decided to penetrate these south-east asian
and other asian markets with their cheap range of products
as highlighted in the previous paragraph.
as there was hardly any serious competition in the smaller
products market, japanese manufacturers were given ample
time to build up their strengths. they were also able to
improve their product quality substantially. japanese
products are now known for their superior quality that
rival, and in many cases, even exceed the best that the
western manufacturers can offer. not surprisingly, japanese
products are now able to command high prices!
besides placing more emphasis on competitive analysis, it
is significant to note that sun zi placed it before
understanding the weather and terrain. this is clearly
illustrated in the first quotation cited at the beginning of
this paper. in fact, in the second quotation cited in this
paper, weather and terrain were not even mentioned!
the focus was entirely on understanding the enemy and
oneself. on closer reflection, it is not difficult to
understand the logic behind sun zi's writings. in the case
of war, if the enemy is far superior to one's forces,
weather and terrain become less important. the same logic
applies to many other situations. for example, if
ational soccer team were to take on the
brazilian national team, it does not matter where the match
is played. regardless of the weather and field conditions,
the result would be obvious to anyone. the same is true if
singapore's national basketball team were to take on the
chicago bulls of the american national basketball
association. similarly, in business, it is extremely
difficult for a small firm to take on a large corporation if
they are both selling the same product. in general, a large
company enjoys many advantages, including economies of
scale. it is therefore not surprising to find that in any
economic downturn, the small and medium-size firms are the
ones that will be the first to be affected, and typically in
the harshest way.
however, if both sides are equally matched, or where the
odds are not too lopsided (e.g. 60:40 or 70:30), then
mastering the terrain and exploiting the advantages
conferred by the weather can become very important in
tilting the odds in one's favour. in other words, if the
general of a smaller army is able to use the terrain and
weather to his advantage, he can definitely increase his
odds of winning against a larger army.
for this reason, in the realm of sports, many organisers
would lobby aggressively to have important games played in
their home grounds in order to gain advantage. it is common
knowledge that the home country typically does better in any
major sports like the olympics. in the 1998 world cup, it
cannot be denied that the excellent performance by france
(it not only entered the finals for the first time, but went
on to beat brazil by a comfortable 3-0 margin) could be
attributed, to no small extent, to its host status.
interestingly, the last time the french won a major soccer
championship was also when it played host to the european
championship in 1984. at the same time, it is significant
to note that six nations have thus far won the world cup
when they played host. these nations are uruguay (1930),
italy (1934), england (1966), west germany (1974), argentina
(1978) and france (1998).
interestingly, sun zi advocated understanding the weather
first before understanding the terrain. again, there is
profound logic to this. like the enemies in war, weather is
dynamic and changing. in contrast, terrain is relatively
fixed and static. hence, it is more important to focus the
analysis on those factors that not only change more
frequently, but may have greater and more immediate impact
as well. this same argument applies to the conduct of
business. physical or infrastructural factors are not easy
to duplicate overnight. hence, they are quite static and
are unlikely to pose any threat or opportunity in the short
run. in contrast, business climate can be created quickly!
for example, a country can enact
laws and economic policies
to attract foreign investment fairly quickly. in the case
of asia, some countries are even known to copy singapore's
investment and economies policies. however, when it comes to
building the business infrastructure like high quality roads
and highways, airports, harbours, warehouses,
telecommunications facilities, etc., the process is
definitely much harder.
the need to focus on the external factors like the
competitors and climatic issues has become even more
important and urgent in light of the asian economic crisis.
many asian economies are fast realising that these external
and dynamic factors are not only very fluid, but they can
also change very quickly. to make matters worse, they are
not controllable. however, this does not mean that nothing
can be done about them. on the contrary, and according to
sun zi, one should pay close attention to them and analyse
them carefully and in great detail. in this way, one can
respond to their changes quicker and more decisively. thus,
i would add that, "knowing your enemy, know the weather"
would definitely increase the chances of winning more
battles in war, and achieving excellence in business!
(part two of two)
(wee chow hou, phd, ppa, is professor of business policy,
dean of the faculty of business administration and director
of the graduate school of business at the national
university of singapore. he is also a resource panelist of
sph's chinese newspapers.)
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