Judo Business Strategy

judoI’ve been exposed to various business strategies employed by big businesses. They range from head-on battles like price wars to buy outs and hiring the competitors’ management teams. While these strategies might work for incumbents, a new player entering an established market cannot opt for any of the battles mentioned above – quite simply they just don’t have the financial clout to do so. However, there is a way the smaller players can make a dent and create market share for themselves – by employing the Judo strategy.

What is the Judo strategy? In a nutshell it uses the incumbents’ size and position against itself to carve out a niche for itself. This can be done by creating a new value curve, finding a blue ocean all while being nimble and agile.  By operating “under the radar” you can quite easily go unnoticed, lap up market share before the behemoths of the industry realize what happened. So how does it work?

1.       Keep a low profile, operate under the radar. Refrain from beating your chest and initiating a full frontal attack. Instead opt for gaining customers via targeted marketing campaigns via new channels. For example, Capital One employed direct marketing tactics to gain market share. Before competitors realized they have fortified their market segment and had become a significant player.

2.       Define a new competitive space. This is about the offense. In a previous post, I had mentioned about how companies can create a new value curve. This not only employs that strategy but also helps you build your core competencies differently than the incumbent’s. By focusing on the biggest needs of a few customer segments you can create a product focused particularly on that niche. For example, Thomson Corporation used front end customer strategy to really iron out what their customers (analysts, portfolio managers and research based roles) wanted and focused essentially on those features and functionalities. By choosing to narrow their focus, they were quickly able to sidestep and create a new competitive space and a new value curve.

3.       Follow through fast. Ensure you can use the first 2 points to follow through on your product and bring about improvements in your product through rapid cyclical iterations. By doing so you’re ensuring the competitor is always a few steps behind and your organization never settles into the role of the defender. A defender strategy or tit-for-tat strategy is as good as dead.

4.       Engage your competitors. This sounds strange, but the idea is enter into joint ventures and strategic alliances with the behemoths. This is essentially the basis for co-opetition – cooperative competition.  The benefits are 2 fold – 1.) You essentially negate the competitive response of the players you enter into an alliance with. 2.) You now have a partner with the financial clout who can help you on the battle field, if necessary.

“The enemy of your enemy is your friend”.

5.       It’s okay to take a fall. You might lose the skirmish, but you need to know when to back down. Even behemoths have learned this lesson. You should conserve your resources when you know you’re not going to win the battle.  Always be ready to pivot, in case your strategy backfires. Even Microsoft knew when to give up – whether it was the Zune or more recently Windows Vista.

6.       Look at your competitors’ biggest assets. Big players have a lot of investment in brand name or IP. This ties them down. Use this against them. One of the greatest case studies involves how Nintendo lost market share to new player in the 1980s. Nintendo sat comfortably on the success of its 8 bit console while other players delved into new titles, categories and more advanced 16-bit consoles focused on different segments. Nintendo in a span of under 2 years was in a battle for survival.

7.       Think unlike your competitor. By thinking outside the box you’ll be able to gain leverage in the strangest ways. You can partner with your competitor’s suppliers or distributors. Ask the right questions. Think about the future, the evolution of technology and what drives the industry. By anticipating the competitors’ reactions and changing customer needs you can stay one step ahead. Easier said than done, but this is game theory 101.

So use Judo when – you’re faced with any of the situations below:

  • David vs. Goliath situation in the market place.
  • Entering a new market with strong, established players.
  • You have the internal capabilities & resources to execute your strategy – i.e. to outmaneuver your opponents and stay agile.
  • Your strategy is not defensive.

Resources:

  • HBS – How to Compete like a Judo Strategist (David Yoffie, Mary Kwak)
  • Business Strategy Review – 10 Techniques for beating a stronger opponent (David Yoffie, Mary Kwak). 
Did you like this? Share it:

Post Navigation