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Sun Tzu and the Art of Business

Six Strategic Principles for Managers

By Mark R. McNeilly
12-minute read
Audio available
Sun Tzu and the Art of Business by Mark R. McNeilly

Sun Tzu and the Art of Business (1996) explains how ancient Chinese general Sun Tzu’s classic text The Art of War applies to the hyper-competitive environment of modern business. These blinks explore how business leaders can integrate Sun Tzu’s battle strategies into their own plans for market domination.

  • Entrepreneurs hoping to disrupt their industry
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Mark R. McNeilly is an author, academic, and business executive. He’s currently a professor of marketing at the University of North Carolina and has previously worked with IBM and Lenovo.

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Sun Tzu and the Art of Business

Six Strategic Principles for Managers

By Mark R. McNeilly
  • Read in 12 minutes
  • Audio & text available
  • Contains 7 key ideas
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Sun Tzu and the Art of Business by Mark R. McNeilly
Synopsis

Sun Tzu and the Art of Business (1996) explains how ancient Chinese general Sun Tzu’s classic text The Art of War applies to the hyper-competitive environment of modern business. These blinks explore how business leaders can integrate Sun Tzu’s battle strategies into their own plans for market domination.

Key idea 1 of 7

Capture your enemy’s territory but don’t destroy it in the process.

What does the ancient philosophy of Sun Tzu have to do with building a successful business? Before we answer that question, we need to decide what success even means.

Broadly speaking, Western culture defines a successful business as one that gives shareholders a return on their investment. Asian culture, on the other hand, generally views a successful business as one that provides people with employment.

But before a business can achieve either of these aims, it needs to be surviving and prospering. These are your fundamental goals as a business leader – and they’re exactly what Sun Tzu’s strategic principles will help you achieve.

The key message here is: Capture your enemy’s territory but don’t destroy it in the process.

In The Art of War, Sun Tzu instructs his readers to “take All-under-heaven intact.” This means that military leaders should seize control of everything their enemies have, without damaging these assets.

In business, “take All-under-heaven” means you should aim for market dominance, by controlling a larger share of your market than any of your competitors. Market dominance is so crucial because it usually means profit. Businesses which dominate the market benefit from improved economies of scale, increased customer loyalty, and higher revenues. This all adds up to a bigger bottom line.

Now, Sun Tzu’s principle isn’t just to “take All-under-heaven,” but to take it intact. Applied to business, this means you shouldn’t destroy or damage the market you’re seeking to dominate. After all, damaging a market usually means draining it of its profitability. For a clear example of this, look no further than global tobacco firm Philip Morris.

In 1993, Philip Morris’s Marlboro cigarettes was one of the most profitable brands in the world. But the company was facing a problem. Rival discount brands were selling their cigarettes cheaper, and gradually taking market share away from Marlboro.

Philip Morris decided to take blunt, aggressive action. It took the fight to the discount brands and dropped the price of Marlboros by 20 percent. But the discount brands struck back by dropping their prices even further. Soon the whole industry was losing money – including the Marlboro brand.

Philip Morris continued to be a major player, but it had ignored Sun Tzu’s advice. The company may well have been dominating the market, but it was now a sick and unprofitable one.

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