What does the ancient Chinese classic The Art of War by Sun Tzu have to do with another classic, the 1987 movie The Princess Bride? Well, a key strategy from the Art of War is wonderfully illustrated in the movie's "Battle of Wits" scene between the villain Vizzini and the hero Westley (aka "The Man in Black"). More importantly, this approach can be applied to business to make your company more successful.
If you're not familiar with the scene (or just want to enjoy it again) you can watch it here.
The strategy from the Art of War that is exemplified is "Winning the Battle Before It Is Fought." Westley creatively illustrates this by having beforehand made himself invulnerable to the iocane poison through constant exposure. He then sets the terms of the contest to include it. Therefore it matters not which cup he drinks from, as either way he will win the battle.
In the business world, one sees companies that have applied this principle to win battles in their competitive space and capture market share. It relies on looking at the contest and re-setting its terms.
For example, Cirque du Soleil won its battle by avoiding competing with traditional circuses in the same old way. Instead, they changed the terms of the contest by eliminating animals, moving from a three ring circus down to one to focus the audience, replacing slapstick with artistry, and building the entire performance around a theme (much like the theater). In the process they created an entirely new experience that no one has replicated--and enjoy healthy growth and profits as a result.
Google won its battle to become the search engine of choice by moving away from the over-busy portal approach competitors provided to offer a simple and elegant design that focused on search. Since then it has expanded its empire by buying companies in the same space such as YouTube and DoubleClick. As a result, in June 2012 it reached its highest share ever (67%) in the search market and its market cap may soon pass that of Microsoft.
The best at setting the terms of the contest, and thus winning the battle before it is fought, has to be Apple. A string of victories (iTunes and the iPod, the iPhone and the iPad) have resulted because Apple's business model offered beautifully designed products that provided content, capabilities, and ease-of-use never before experienced. Apple's market cap is now greater than that of Internet competitors Microsoft, Google, Facebook, and Amazon combined, or, looked at another way, all the listed companies in Spain, Portugal, Ireland, and Greece.
To be successful at this approach requires seeing possibilities in the market no one else does. To do so means you must understand what customers desire (sometimes even before they do), competitors' strengths and weaknesses, and the capabilities you will need to win. Of course, this takes time, strategy and a lot of effort...much like developing resistance to iocane powder. But the results, as we've seen, can pay off handsomely.
Mark McNeilly is an adjunct professor of marketing at UNC’s Kenan-Flagler Business School and the author of Sun Tzu and the Art of Business: Six Strategic Principles for Managers.