Military strategy has long been a source of wisdom for the field of business, inspiring countless comparisons. Despite the fact that we now use nuclear warheads and drones rather than swords and cannons, timeless battlefield principles will likely never become obsolete.
This article will consider three examples from military history that can examined to better understand competitive strategy in the business arena.
1. Stonewall’s disruption
During the first half of the American Civil War, Southern forces consistently outdid Northern forces, despite being outnumbered in terms of soldiers and resources.
One explanation for the South’s early success is the tactics of General Stonewall Jackson, who led small bands of troops behind enemy lines at night to ambush them the next morning. These disruptions would leave Northern forces crippled for days, and because of their large size and lack of mobility, they were ill-equipped to chase Stonewall’s soldiers after an ambush.
While the motives of the South are often criticized, General Jackson’s military tactics proved the power of guerilla warfare. These pre-emptive attacks slowed the Northern advance, allowing the South to survive much longer.
Stonewall’s disruption is analogous to the modern theory of disruptive innovation. In the face of continuously changing technology, large firms have a hard time adjusting to the small but constant guerilla attacks of technological change. They are too busy listening to their loudest and biggest customers that they fail to respond to the small competitor who has employed a new technology to build a low cost yet good enough product for a small niche market of price sensitive customers. As they gradually improve the quality of their product offering, the new entrant has the potential to take over the entire market.
2. Napoleon’s speed
A discussion about military tactics wouldn’t be complete without a mention of Napoleon Bonaparte. Known for planning battles extensively and preparing for any situation, Napoleon was a deft commander. He led small but trained armies against larger enemies on many fronts. Although he was eventually defeated, Napoleon held his ground through efficiency and agility.
French infantry used three kinds of formation: columns for moving quickly, lines for attack, and squares for defense against cavalry. Through training, Napoleon’s army was able to switch between these formations quickly depending on what was needed. Because of their agility, Napoleon’s army was often able to obtain the best position on the battlefield. This strategy was replicated by generals throughout the world for many generations.
Similarly, businesses can employ speed to gain a first-mover advantage. When a firm is the first to enter a market or build a product, it can gain special advantages, such as access to customers and economies of scale. Of course, it also faces the risk of entering uncharted territory, like untested technology, uncertain customer demand, and an unproven business model. However, with proper research and a well-planned growth strategy, being the first to enter a market can provide significant strategic advantages that make it difficult for competitors to follow.
3. Japan’s barriers to entry
Until World War II, Japan had never been conquered. The Mongols tried in the 1200’s and Russia in the 1800’s, but devastating typhoons thwarted enemy attack plans in both instances. Japan’s mainland lacks navigable rivers and safe pathways. Mountainous islands and rocky terrain serve as natural protection, regardless of how advanced the enemy’s weapons are. Perhaps one of the biggest reasons the United States resorted to atomic warfare was that trying to conquer mainland Japan one island at a time would have required several more years and resulted in millions of additional casualties.
Long story short, Japan’s internal resources give it a competitive advantage in defense. What’s more, they know how to maintain that advantage. If an enemy wins an island, Japanese forces sequester themselves in deep trenches on the next island, deterring further attacks from incoming forces. This is akin to creating barriers to entry, which deter new companies from entering an industry.
If an industry is profitable, one can assume that there are high barriers to entry, such as in the diamond industry. When incumbent firms create switching costs for customers, strengthen brand loyalty, or invest heavily to lower production costs, new entrants face a formidable wall of defense. Regardless of how resourceful new entrants are, they must weigh the benefits of victory with the costs of overcoming high barriers to entry.
To summarize
The examples from military history explored above offer three guiding principles of military strategy. To win, a military unit must access and refresh crucial resources, quickly secure an advantageous position, and block and deter enemies from advancing.
Firms and innovators that learn to live by these principles are also likely to find success in the competitive field of business.
Wes Brooks is an incoming Summer Business Analyst at Cicero Group and an undergraduate studying economics, management, and strategy. He is a serial entrepreneur, works in venture capital, and enjoys singing a capella and piano improvisation.
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