How can you compete with stronger rivals who have size, strength and history on their side? The answer lies in a strategy we discussed in our Game Theory course, which prevents opponents from bringing their full strength into play and emphasizes skills rather than size. The strategy is named after the martial art of judo where a combatant uses the weight and the strength of his opponent to his own advantage rather than opposing blow directly to blow. Similarly smaller companies aim to turn their opponent’s resources, strength and size against them. The focus is on avoiding head to head struggles and instead relying on speed, agility and innovative strategies to make it difficult for stronger rivals to compete. The judo players base their strategy on some of the key elements of this approach as introducing new products or pricing models to move rapidly to new markets and uncontested ground, using leverage to turn opponent’s strategic commitments and investments to their advantage and hence using the weight of opponents against them, and being flexible in embracing and extending rivals’ smart moves. There are a lot of companies which have used these strategies successfully to penetrate the new markets. Palm successfully used the strategy to introduce its operating system by first entering the market with its PDA Pilot devices, and keeping Microsoft from identifying Palm as an urgent threat. Moreover, they were organized for speed by relying on outsourcing, using concurrent engineering, and keeping designs simple in order to get products out fast. Juniper shifted the battleground by focusing on adding intelligence to silicon chips for their routers instead of software driven routers. Sega used leverage to underpin its attack against Nintendo’s eight-bit machines by launching faster 16-bit machines turning Nintendo’s investments into hostages. Similarly, Southwest Airlines offered about 50 percent lower fares below competitors’ leveraging on the higher cost of maintaining the assets for their competitors.
In a highly competitive environment, simply opposing force to force is not a wise move especially when the competitor is much larger and stronger. Thinking in terms of judo helps the managers understand the competitors and target their weaknesses that lurk among their strengths.