Chris Halliwell, Executive Director of the Technology Marketing Center, with tips to help you create the laser focus you'll need to take down Goliath.
Yano Shinichi has written 3 books on Lanchester Strategy. First, an explanation of Lanchester's force equation (summarized below), followed by books that discuss application of the strategy from the point of view of the weaker competitor, and then from the point of view of the strong.
We Have No Shock, No Awe
On a recent client project we were tasked with finding a way to grow market share against a dominant competitor in Europe. Our competitor's share ranged from 70-90% in it's home market and other large countries, to 10% in some smaller markets. Just to make things more interesting, we had some incremental product advantages, but no compelling differentiation.
Why engage in this type of battle? Although you can argue with the business logic, you've heard it: we need this product to fill a hole in our line that currently invites competition into accounts, and anyway, we have successfully bloodied this competitor with other products and in other markets. If you want to elevate marketing beyond brochures and webinars, take on an entrenched dominant competitor in a low growth market without benefit of technological advantage.
Fred Lanchester,a mathematician and engineer, derived laws on the numerical superiority of force, He calculated that the combat power of a force is the square of the number of members of that unit. The advantage a larger force has is the difference of the squares of the two forces. So a two to one advantage in units will inflict four times the punishment, three times as many units will have nine times the combat ability and so on.
Divide & Conquer
Instead of shrinking from the mathematical proof of our doom, the team considered how we might use Lanchester's Law in our favor to fight the dominant competitor and gain share in the European market. First, the Law is about people, about units of force, about members. So we began by seeing our differentiation problem as a people problem, as a service issue, not a product issue. Next, we realized that success would depend on precision alignment and execution of a strategy focused on segments where our opponent's service capabilities were weakest. Simply put: where should we put more people in place providing value adding services to gain a preponderance of force in selected market segments (countries)?
That's All Fine, But...
The implications of Lanchester's Strategy for the client team included refocus from product orientation to excellence in understanding and delivering service value, E.g. configuration services, design services, test services, and so on. This is not an easy transition for a technology-enabled business.
Even more challenging, the segmentation strategy required sales to embrace the idea of focus on smaller countries where competitor service resources were weakest, walking away (at least temporarily) from the larger, obvious countries. Divide and conquer simply will not work without sales management buy-in.
Finally, management has to support this strategy with the investments needed to profitably compete on service across a disparate set of smaller targets, for instance careful selection of local service partners in smaller markets, and on automation of support tools and information.
Service development and segment focus get some lip service, but continue to be challenging for many industrial and high tech organizations. Lanchester's Laws appeal to technically-mined management, and can be used to roughly estimate the investment needed to whittle away at competitors' share to create a return. So, I'd recommend putting this concept in your pocket when it's time to lead your team into battle.