Pulchowk Campus, Nepal Hardball Management thinking has gone soft, with its emphasis on squishy things like corporate culture and the coddling of customers. We will the playbook for a dog-eat-dog world. Winner in business play rough and dont apologize for it. Strive for extreme competitive advantage.
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Unleash massive and overwhelming force. Focus relentlessly on competitive advantage. The history of business is littered with the remains of companies whose competitive advantages, once robust, simply withered away. Hardball players, by contrast, strive to widen the performance gap between themselves and competitors. Although a lot of companies talk about competitive advantage, few are able to put a finger on exactly what theirs is, and fewer still can quantify it.
Hardball players know—empirically—what theirs is and exploit it ruthlessly. Companies that relentlessly pursue competitive advantage are wonders to behold.
Goods from suppliers were accepted only in full truckload quantities. They were then moved across the dock and loaded onto other trucks that later departed fully loaded with a variety of goods going to stores. Supercomputers were installed to track and analyze consumer purchases, competitor prices, and other information.
Satellites beamed the data from stores to suppliers and on to warehouses, helping to keep inbound and outbound trucks full and shelves stocked. Suppliers were told exactly when to deliver shipments to warehouses; if they missed the window, their shipments might be returned until the next window opened—or rejected altogether. Wal-Mart also used sales and inventory data to tell companies like Rubbermaid which products it would carry—no matter what the companies thought was the appropriate merchandising of their lines.
Wal-Mart continues to tighten the bolts on this system, so far without any signs of shearing. It is, in effect, extreme competitive advantage, which is the ultimate endgame.
Unlike plain old competitive advantage, which can be fleeting, this is something that puts you out of the reach of your competitors. Often, the hardball competitor has an economic system that is unassailable. Or a relationship with a customer or a supplier that is not available to its competitors. Or capabilities such as fast product development or superior customer knowledge that others cannot replicate.
The system lets Toyota produce, at both high and low volumes, a great variety of high-quality vehicles at very low cost. Toyota is so confident that its system cannot be replicated that it has welcomed competitors into its factories. The rewards to Toyota have been spectacular. Does anyone want to bet against it? Avoid attacking directly.
Perhaps paradoxically, hardball players avoid direct confrontation. Even if they have the strength, they prefer the economies of force inherent in the indirect attack. Southwest chose not to attack the major airlines on their well-defended turf. Instead, it opened operations in small, out-of-the-way airports. Not surprisingly, there were no bloody battles with the major airlines for control of these locations.
Once Southwest was established in the smaller airports, the major carriers faced a dilemma. Should they compete directly with Southwest in smaller airports where Southwest had built a competitive advantage? Or should they create their own non-hub-based airlines to compete with Southwest? And, in fact, no major carrier has yet resolved this dilemma.
Numerous attempts to confront Southwest directly—for example, Continental Lite—have failed. Meanwhile, Southwest continues to push into small cities.
Its well-documented success as other airline companies teetered after the September 11, , tragedy only confirms just how savvy Southwest was. Hardball requires guts as well as smarts. Victory often belongs to those who want it the most. Southwest spirit is you. We saw. We kicked tail.
To achieve competitive advantage and drive toward extreme competitive advantage, hardball players must be action oriented, constantly impatient with the status quo. Fortunately, one can foster this will to win and turn softball players into hardball players. One way to do this is by adopting hardball strategies of the kind we describe below.
But to really turn softball players into hardball players, you need to create and maintain in people a hardball attitude. This becomes more difficult as your advantage over competitors grows and people become complacent. Know the caution zone. The hardball player ventures closer to the boundary, whether it be established by law or social conventions, than competitors would ever dare. The hardball player ventures closer to the boundary, whether established by law or social conventions, than competitors would ever dare.
But to play the edges, you have to know where the edges are. This is perhaps the most complex and daunting aspect of hardball.
So hardball players do their homework. They know their industries cold. But the answers often are far from clear. A few guidelines can help you navigate your way through the caution zone when considering an action: Does it break any existing laws?
Keep in mind, though, that a legal standard is often less than crystal clear. By aggressively pushing the limits of existing regulations, a hardball player can sometimes win tremendous competitive advantages.
Is the action good for the customer? If so, a move otherwise subject to challenge may be found acceptable by the courts or legislators. Will competitors be directly hurt by it? Putting competitors in situations in which they inflict damages on themselves is acceptable—for example, enticing a rival to invest in an area where it has no hope of winning. Overtly hurting a competitor by, say, buying a key supplier and then cutting off your rival may win you the wrath of others you do business with, even if the move is legal.
Will the action touch a nerve in special-interest groups? Microsoft regularly plays in the caution zone, to its benefit and detriment. At the same time, its assertion that customers benefit from its approach—a view shared by many—has undoubtedly reduced the impact of the numerous legal attacks by competitors and regulators.
At the risk of repetition, let us stress once again that hardball is not about breaking, or even bending, the law. It is not about crooked accounting, breaching contracts, stealing trade secrets, or predatory pricing. Well, not too mean. The nicest part of playing hardball is watching your competitors squirm. While there are countless ways to play hardball, a handful of classic strategies are timelessly effective in generating competitive advantage.
These methods are best employed in bursts of ruthless intensity. The aim: a dramatic shift in your competitive position, followed by consolidation of the gains and preparation for the next attack. Profit sanctuaries are the parts of a business where a company makes the most money, where it can quietly accumulate wealth, like a bear storing up fat for winter.
If a rival starts pushing into one of your territories, you respond by attacking his plump underbelly. He should get the message, fast. Some of these can take you deep into the caution zone, and the legality of each must be considered. Given the competitive sensitivity of this strategy, companies that have successfully employed it are rarely willing to describe it in detail.
The following disguised example is one such case. A few years ago, vacuum cleaner maker VacuCorp was having a problem with a rival. Here, SweepCo made the canister type of vacuum cleaner, the kind that rests horizontally on wheels and has a long hose and a cord that always seems to be tangled. Most manufacturers had stopped making canisters.
As a result, they were a rich profit sanctuary for SweepCo. After several of these skirmishes, SweepCo figured out what was going on. Peace settled over the vacuum cleaner industry. This will allow you to hone your attack strategy, adjusting prices to inflict the most pain.
You also need to be alert to the legal limits on pricing strategies. Be hypervigilant, therefore, for the early warning signs of failure or success. Your competitor may attack your profit sanctuaries in response. Plagiarize with pride. Softball competitors like to think that their bright ideas are sacred. But hardball players know better.
But hardball plagiarism involves much more than appropriating a good idea. You have to improve on it. Just ask the airlines that have tried—and failed—to copy Southwest. All of this means that plagiarizing is not as easy as it may seem. In the late s, Ford dealers were losing business at their service bays. So it sent a team to look at the competition.
The team discovered that one carmaker, Honda, had built a particularly strong service business. Ford decided to do the same thing.
Hardball: Five Killer Strategies for Trouncing the Competition
How to get them off your scent? Consider this curveball strategy: Let rivals misinterpret your success, as Australian discount airline JetStar did. Alternately, borrow tactics from an industry other than yours. Another clever move: Lure competitors into disadvantageous areas; for example, by competing for, but intentionally losing, the business of less profitable customers.
Five Killer Strategies for Trouncing the Competition
Unleash massive and overwhelming force. Focus relentlessly on competitive advantage. The history of business is littered with the remains of companies whose competitive advantages, once robust, simply withered away. Hardball players, by contrast, strive to widen the performance gap between themselves and competitors. Although a lot of companies talk about competitive advantage, few are able to put a finger on exactly what theirs is, and fewer still can quantify it. Hardball players know—empirically—what theirs is and exploit it ruthlessly.