This is Volume Two of the three-volume New Lanchester Strategy.
In it, we describe the strategy of the week.
The New Lanchester Strategy includes strategies for both the strong (market leader) and the weak (second and lower market share). The starting point of stategy is, after all, the desire on the part of the weak to find a way to defeat the strong.
Recently, diversification has led to increasing competition among companies engaged in disparate industries. Companies entering the fray for the first time need to implement the strategy of the weak. Even the strong would be well advised to familiarize themselves with the strategy of the weak in order to protect their positions of strength.
This volume is a continuation of the story presented in Volume One. Supervisor Sakamoto remains the chief protagonist, and the story revolves mainly around him and his colleagues at Company W, a manufacturer. Other characters from manfacturing companies, retailers, and service industries are introduced in this story. We hope you’ll agree that the merits of the comic book format are even more apparent in this volume. However, since this format does not allow us to go into great detail, we have provided a detailed summary at the end of each chapter, which we hope you wil take time to read.
Chapter One deals with differentiation strategy. Differentiation here means having something that the competition doesn’t. This is the most basic strategy for the weak. Weak companies would be seriously mistaken to adopt the same strategies used by their stronger rivals.
Since differentiation strategy involves having something that the competition does not, companies must be prepared to change their differentiation strategy when a competitor’s reaction warrants such a change. For that reason, differentiation strategy must never be rigid. Constant alertness and flexibility are called for.
In this chapter, we discuss the importance of differentiation strategy and describe the various forms it may take. Company W will be our case study as we demonstrate how to use and apply the strategy.
This chapter discusses local battles. Local battles are waged on a limited front. In terms of sales strategy, this has two meanings:
1. Fighting local battles, and
2. Creating local battle conditions.
Fighting local battles means competing in specific regions. Creating local battle conditions in specific regions. Creating local battle conditions means segmenting the market. Not only must regions be segmented, but also merchandise and customer bases. This step is necessary when a company is attempting to set priorities. Here again, we use the regional strategy adopted by Company W as an example.
In this chapter, we consider single (man-to-man) combat. In terms of sales strategy, this means penetrating a market dominated by one company and going after that company’s customers.
This strategy is needed when a company enters a new industry or region, or is attempting to cultivate a new customer base, and is in the process of setting its priorities. As an example, we have used a service industry (a family restaurant, in this case) and its expansion strategy.
Chapter Four describes close combat. In relation to sales strategy, close combat embraces the following four concepts:
1. Adopting a diresct sales system,
2. Launching a “downstream” campaign,
3. Reinforcing one’s home base, and
4. Using personal approach as a weapon.
Close combat is vital to distribution strategy and in developing tactics. Here, we have used a retail business (a liquor store) as an example.
This chapter describes the principles of “one-point concentration.” One point concentration is, in essence, sharpshooting or sniping. In a battle, the weaker army has no hope of winning unless it focuses its small forces on one area. In sales strategy, as well, the weaker company must launch a concentrated offense. There are several types of one-point concentration (involving regions, products, and customer bases), but the most problematic aspect is where to focus the effort. The best strategy for the weaker company is to select a relatively easy target or to focus on an area where it already has strength. Here, we have used the sales strategy implemented by a manufacturer of industrial supplies as an example.
Chapter Six introduces diversionary operations. Diversionary operations confuse the enemy. It is important to keep such operations secret, since once an army’s battle plan is discovered by the enemy, defeat is inevitable. Decoy maneuvers are an important aspect of this particular strategy.
In sales strategy, the purpose of diversionary operations are:
1. To demoralize the enemy, and
2. To scatter the enemy’s forces.
Here we have used Company W as a case study.
As the story unfolds (and we urge you to read Chaptes One through Six in order), you will learn that a weak company cannot defeat a strong one unless it does its homework better and works harder than its stronger rival. We hope you will read and re-read this volume, and once you have mastered the basics, that you will apply these strategies in your company’s sales aand marketing campaigns.
Shinichi Yano, Tokyo, April 1986.
Copyright (c) Lanchester Press, 1996. All rights reserved, including the right of reproduction in whole or in part by any means.