lecture 7 - chapter 12 to 13 student version 2010

8/6/2019 Lecture 7 - Chapter 12 to 13 Student Version 2010

1/52

1

UBMM1011Sun Zis Art of War and Business Strategies

Lecture 6


2/52

Chapters

1. Detailed Assessment and Planning ()

2. Waging War ()

3. Strategic Attack ()

4. Disposition of the Army ()

5. Forces ()

6. Weaknesses and Strengths ()7. Military Maneuvers ()

8. Variations and Adaptability ()

9. Movement and Development of Troops ()

10. Terrain ()

11. The Nine Battlegrounds ()12. Attacking with Fire ()

13. Intelligence and Espionage ()


3/52

Chapter 12Attacking with Fire (Chinese:)

Chapter Outline

5 ways of attacking with fire

Rulers and generals

Business application: Reinventing business

Importance of leadership


4/52

5 Ways Of Attacking With Fire

The ways of attacking with fire are to burn the enemys:

soldiers in their camp

provisions and stockpiles

heavy military equipment and supplies

armoury and warehouses

transportation trains

The factors to be considered when launching attacks byfire:

The materials and equipment

The weather dry and hot and strong wind.


5/52

Prerequisites for Using Fire

When fire breaks out within the camp of the enemy,prepare quickly to attack the enemy from outside.

When fire breaks out within the camp of the enemy andthere is no confusion nor commotion among the soldiers,

wait patiently and do not be eager to attack. When the fire is burning ferociously with opportunities to

be gained, follow through quickly with your attacks.

When there are no opportunities to be gained and

followed through, cease immediately. Fire can be started from the outside of the camp of theenemy.


6/52

Prerequisites for Using Fire

When fire is burning in the windward direction, do notassault the leeward position.

When winds blow strongly and continuously in the day,they tend to cease in the night.

Thus, those who use fire as a means to support attacksare wise and shrewd.

Those who use water as a means to support attacks arepowerful.

Water can be used to cut off and isolate an enemy, but itcannot be used to destroy and deprive him of hisequipment, provisions and supplies.


7/52

Attacking with Fire

The targets for destruction by fire includes personnel, provisions,food, logistic support, weaponry and ammunition for combat, supplyroutes, and equipment.

The use of fire attack is also a form of sabotage because it can inflict

heavy damages with minimal resources.

Attacking with fire to weaken the opponent

with minimal resources


8/52

Rulers and Generals

Thus, it is said that it is the enlightened leaderwho deliberates onthe plan while the capable general implements it.

Move only when there are advantages to be gained.

Strike only when there are definite chances of success.

Fight only when there are definite dangers. A warlord must not embark on a military campaign simply out of anger.

A general must not go into battle out of rage.


9/52

Rulers and Generals

Thus, an enlightened ruler must always be prudent in matters of warand a capable general must always be cautious and attentive.

This is the way that keeps the state in peace and security, and the armyintact.


10/52

Summary

Attacking with fire explains the use of weapons generally and theuse of the environment as a weapon specifically. It examines thefive targets for attack, the five types of environmental attack, and theappropriate responses to such attack.


11/52

Business Application- Reinventing business

- Importance of leadership


12/52

Business Application

$Profit$ is the main concern in business: Acquisitions in a right and good way are the most important

principles. Analyze market behavior before any introducing a new plan or

new product.


13/52

Milton Friedman

(1912 - 2006)

American economist.

Won a 1976 Nobel Prize for histheories of monetary control andgovernmental nonintervention in theeconomy.

There is only ONE socialresponsibility of business -- touse its resources and engagein activities designed toincrease its PROFITs withoutdeception or fraud.


14/52

Importance of Leadership

CEO must try to exploit whatever available means are at hisdisposal to build advantages in competition.

This would include exploiting technology, automation techniques,management skills and production facilities.

Nowadays, it is much easier to manage and analyze information(marketing, accounting, production scheduling, forecasting, datamanagement system, etc) by using computer software.


15/52

Reinventing an industry

Attacking withFIRE = Reinventing an industry. Competing within an industry is an acceptable strategy, but

REINVENTING an industry is much better.

Businessmen must mastercreative destruction!!! Creative destruction is the wisest form of competition.

Any innovation can help you win new territory.

Any innovation can put your competitors on the defensive.

Creative destruction only makes sense if it create a stronger position.

However, if there is NO profit in reinventing your industry,AVOIDdoing it.


16/52

Reinventing An Industry

To destroy an existing industry, the business climate must be right.

Choose the right year.

A tight business climate requires lower-cost alternatives.

How about 2010? Is it a right year to reinvent?

C

hoose the right time. The technological fuel must be readily available

You want a TIME when people are readyfor a NEW beginning.

Example: When Ogawa introduced massage chair, most customers were reluctantto purchase. However, the resistance level was milder when Osim entered themarket.


17/52

Reinventing Computer Industry


18/52

Futuristic Computer


19/52

Futuristic Computer


20/52

20

UBMM1011Sun Zis Art of War and Business Strategies

Lecture 6


21/52


22/52

Chapter 13Intelligence and Espionage ()

Chapter Outline

Intelligence and espionage

Kinds of spies

Importance of double agent Business application:

Importance of business intelligence


23/52

Intelligence and Espionage

The enlightened ruler and the capable general are able to securevictories for their military campaigns and achieve success thatsurpass those of many others, because they can foresee thedevelopment of war.


24/52


Foreknowledge cannot be obtained:

from the spirits nor from the gods.

by comparing with similar present or past events and situations.

from study of astrology.

Foreknowledge must be obtained from people who clearly know theenemys situation.

Foreknowledge =Intelligence


25/52


In modern war, military uses modern satellites and othersurveillance equipment to zoom into micro details of their enemy.

US army strikes against Taliban in Afghanistan (2001) relied heavily onadvanced surveillance equipment which can detect human movementeven at night.

Foreknowledge =Intelligence


26/52

5 Kinds of Spies

The FIVE kinds of secret agents or spies are:

1. Local agents ordinary people recruited from the homeland of theenemy and used as spies by us.

2. Inside agents officials of the enemy who are recruited andemployed by us.

3. Double agents spies of the enemy who have been converted &recruited to work for us.

4. Doomed agents our own spies who provided false information fordeliberate leakage to the enemy.

5. Living agents our spies who have penetrated deep into enemy

territory & managed to return safely with information.


27/52

5 Kinds of Spies

Thus, among all military relationships, none can be moreintimate than that maintainedwith spies and secretagents.

Rewarding spies and secret agents: There can be no bigger rewards than those showered on spies

and secret agents.

There can be no greater secretive operations than thosepertaining to espionage.


28/52


29/52

Kinds of Spies

Such is the intricacy and subtlety of espionage!

Indeed, there is no place where espionage cannot be used.

When espionage activities and secret operations have been leakedbefore their implementation, then the agents concerned and thosewhom they are in contact with must be put to death.

There may be armies that you wish to strike, cities that you wish toconquer, and key people that you wish to assassinate.


30/52

Mata Hari: Female espionage (WWI)

Margaretha Geertruida Zelle akaMata Hari

A Dutch exotic dancer andcourtesan who was executedby firing squad on 15 October,1917, at the age of 41, forespionage during World War I.

On 13 February, 1917, MataHari was arrested in her roomat the Hotel Plaza Athne inParis.

She was put on trial, accusedof spying for Germany and

consequently causing thedeaths of at least 50,000soldiers.


31/52

Kinds of Spies

There is a need to know beforehand detailed informationon the identities of the garrison commander, hissupporting officers, the visiting consultants, the guardsand patrols, and the various attendants.

Your agents must be ordered to investigate these matters ingreat detail.

The secret agents of the enemy who are spying amongus must be actively sought out.

Use incentives to bribe them, guide and counsel them, and then

pardon and release them. Why? Thus, they can become double agents and be used and

employed by us.


32/52

Importance Of Double Agent

The situation of the enemy can be known, and local andinside agents can be recruited and deployed as well.

Double agent will carry fabricated and false informationto the enemy.

It is through the efforts of the double agents that ourliving agents are able to return as scheduled with needfulreports on the enemy.

The ruler (general) must know how to use the 5 differentkinds of spies, so converted spies (double agents)should be rewarded generously.


33/52

Importance of Espionage

In ancient times, the rise of the Shang Dynasty over the Xia Dynastywas because military advisor, Yi Yin, had served as an official in thekingdom of Xia.

Similarly, the rise of the Zhou Dynasty over the Yin Dynasty wasbecause its military advisor, Lu Ya, had served as an official in the

kingdom of Yin. The use of spies is essential in war, and the army must depend

on this in its action.


34/52

Famous Spies In History

(L-R)The Cambridge Spies: Blunt,Maclean, Burgess and Philby

Burgess and Maclean defected to

Russia in 1951, Philby in 1963. Blunt confessed to being a spy but was

granted immunity in exchange forgiving full disclosure, and was allowedto keep his job (at the Palace).

Guy Francis de Moncy Burgess,Anthony F. Blunt, Donald Maclean andKim Philby met while at school atCambridge University in the 1930s.

Were recruited to work for the SovietKGB (Soviet Union).

Were active for 30 years.

Were eventually exposed but none wasever caught.

All four held high positions:

Burgess and Maclean becamerespected diplomats.

Philby became a senior officer in Britishintelligence.

Blunt became an art historian.


35/52

Summary

Intelligence and espionage focuses on the importance of developinggood information sources, specifically the five types of sources andhow to manage them.


36/52


37/52

Business Intelligence

Market research is the vital activity for any business.

Information from different sources will help to launch newproducts.


38/52

Competitive Intelligence vs Business Espionage

CI - uses public sources to find and develop information oncompetition, competitors, and the market environment (legal andethical means).

Business espionage - develops information by illegal means(corporate spying).

Ex: hacking, Steal a competitor's client list CIP uses public information - all information that can be legally and

ethically identified and accessed.


39/52

Trade-secret theft cost U.S.companies more than $100billion in lost revenues last

year. If left unchecked,analysts estimate, the losses

could grow an additional50% by the year 2003.

Corporate Spying/Information Stealing

Example:

1993, executives at Science Applications International Corp., learned that aformer employee had been stealing the codes to their computer programs

Later, they found out that the former employee had given those secrets to aspy ring that included Japanese corporate giants Mitsubishi, Nissan andToshiba

The former employee was sentenced to 6 years in jail, but no action wasever brought against the Japanese companies, which claimed they did notknow the information was stolen.


40/52

Origins ofIndustrial Espionage

Father Francois Xavier d'Entrecolles revealed to Europe regarding themanufacturing methods ofChinese porcelain in 1712 (early case ofindustrial espionage).


41/52

Business Espionage: Eastman Kodak

Harold Worden retired from Eastman Kodak in Rochester, NY after30 years of service in the mid 1990s.

He founded a consulting firm that hired up to 60 other Kodak retireesand proceeded to try to sell information gleaned from thousands ofstolen confidential documents about Kodaks top-secret acetate-

manufacturing machine.

Both Agfa and Konica, competitors of Kodak approached byWorden, informed Kodak and the FBI of the attempts.

In August 1997, Worden pleaded guilty to one count of interstatetransportation of stolen property and went to jail for 15 months aswell as having to pay a $30,000 fine.

Kodak also sued him in civil court for damages.


42/52


43/52

'Spy scandal'hits Deutsche Bank

July 2009, Deutsche Bank was accused of spying onbank spied not just on its employees, but also on peopleoutside the financial institution, which took place in 2006.


44/52


In business, a spy can be viewed at both macro andmicro level.

Macro level when country want to export or penetrate foreignmarket, it can conduct intensive study on the needs and

preferences of that market by intensive studies by interviewing orsurveying their potential consumers (potential local customers).

Micro level company can survey consumers on competitiveproducts, and their respective strengths and weaknesses or

other areas such as pricing, distribution, advertising & promotion.


45/52


Businessmen need to manage FIVE types ofinformation regarding their industry.

1. The need to know people in their industry.

2. The need to know their customers.

3. The need to know their competitors.

4. The need to create a market image.

5. The need to know the sales trends.


46/52


Getting information?

You must be willing to pay the price for information.

You need to know where your competitors get their informationfrom (so that you can win their contacts over)

You must develop contacts who know your competitors.


47/52

Japanese Market Intelligence

Over the years, Japan has created a massive institutionalinfrastructure that is geared to collecting information on variousmarkets.

Ex: General Trading Companies (GTC), Ministry of InternationalTrade & Industry (MITI), Japan External Trade Organization

(JETRO). These organizations conduct all kind of market-related research and

information gathering and compile, collate, and compose them forJapanese companies.


48/52

Japanese Market Intelligence

General Trading Companies (GTC)

Can provide in-depth knowledge about particular country andproducts

Their staff are well trained in language, culture, and marketcondition of the countries they work in.

Constantly update their information and databanks.

Ministry of International Trade & Industry (MITI)

Would sponsor huge R&D projects, protect Japans strategictechnologies


49/52


50/52


Internal Sources

Company Accounts

Internal Reports and Analysis

Stock Analysis

Retail data - loyalty cards, till data,etc.

External Sources

Government Statistics

Trade publications

Commercial Data - Gallup,Mintel, etc.

Household Expenditure Survey

Magazine surveys

Other firms research

Research documents

publications, journals, etc.


51/52


52/52

Market ResearchCompany

lecture 7 - chapter 12 to 13 student version 2010

Documents