Competitive strategies in business and wars have many a times shown resemblance. If closely watched , most of the business battles between two parties take their inspirations from actual wars between some other two parties of the past.
This post brings one such resemblance between the attacks made by great war tactician Hannibal Barca against the Romans in the Punic war and the attack made by the Japanese auto makers like Toyota ,Nissan and Honda against the big three ie General Motor, Chrysler and Ford.
For those who are unaware, Punic war is a set of three wars fought between the Romans and the North African empire of Carthage which finally ended up in the culmination of Carthage. During the first part of the second war the Carthaginian general Hannibal Barca took a military of around 50,000 soldiers, crossed the alps and attacked the Romans in their own land. A similar kind of strategy was adopted by the Japanese automakers in the early 1970’s when they attacked the American auto industry in their own market.
When Hannibal left new Carthage (Spain) for Rome around 218 B.C, the basic strategy of Hannibal was very clear, which involved two major parts. First, the Romans always considered themselves as a very superior force; they could never prognosticate that the army of Carthage whom they considered as an inferior stock can ever dare to attack the Romans. This sudden attack confused them completely and left them unprepared, incapable to respond. The second part of the strategy was to fight the war in the Roman soil, aiming to create chaos in Rome on which Carthage can leverage.
This Carthaginian strategy really paid off. They defeated the Romans continuously in consecutive battles and got a major part of the Roman empire (though it should be noted here that finally it was not Rome but Carthage that tasted defeat ,thanks to the retaliatory moves by the Romans who used the strategy of Hannibal against him only, details on which will come on some other post).
The same tactics were used by the Japanese auto companies against their American counterparts. Japanese companies entered in the American market in the early 1970’s with their small cars which were better in quality but lesser in price than the cars produced by the American auto majors. American automakers were not prepared for this attack, they perceived these Japanese makers as manufacturer of inferior quality and instead of fighting them they relegated the segment of small car market to them and started focusing on big car segment. They were sure that Japanese companies were not capable enough to fight them in this segment, but they were proven wrong. After holding their ground on the small car segment, the Japanese attacked the US auto makers in the big cars segment and on account of their quality processes like Total Quality Management; they defeated the US automakers in the big cars segment too. Finally the American automakers tried to take shelter in the light truck manufacturing segment but here also the Japanese did not spare them.
Today GM is trying to come out of bankruptcy, Chrysler has been taken over and Ford just escaped bankruptcy. Well, large part of Japanese victory can be attributed to various reasons such as better product, cheap labor, better culture in their companies but a very important part that worked in their favor was their strategy of attacking the Americans on their own profit sanctuaries. They repeatedly attacked the Americans on all those domains which have been their major source of profit and thus created a great chaos in their auto market. One important point to be noted is that while American auto makers were under great pressure of losing their revenue from their core markets, while the Japanese makers were not only winning ground in the USA but they were making good deal of money from their Japanese business also. In fact their safe base at Japan gave them the opportunity to take risk against their American counterpart by attacking in their territories. This was very much in line with the Hannibal’s strategy of restricting the warfare in the Roman land and keeping a safe base at Carthage.
Now we know why the military drills are done whether there is war or not and why corporates need to be on their toes whether there is any foreseeable threat or not.
Hardball: Are You Playing to Play or Playing to Win? By George Stalk and Rob Lachenauer
– Paritosh Kashyap (Batch 2009-11)