JUDO STRATEGY Turning Your Competitors' Strength to Your Advantage
By David B. Yoffie and Mary Kwak
Harvard Business School -- 238pp -- $29.95
A couple of years ago, when he was visiting Japan, David B. Yoffie, a professor at Harvard Business School, became so ill with a fever that he could do nothing but lie in bed and watch television. Sumo wrestling seemed to be on all channels, so he spent a day watching nearly naked 300-pound men squat, throw salt over their shoulders, and then bash into each other with the force of freight trains colliding. "After eight hours, I still didn't get it," says Yoffie.
Well, Yoffie gets it now. In the past two years, he has made a careful study of the Japanese martial arts of judo and sumo and applied them as metaphors for the way companies do business. The result: Judo Strategy: Turning Your Competitors' Strength to Your Advantage. Written with Mary Kwak, a research associate at Harvard Business School, Judo Strategy is a lively, detailed analysis of how small companies can compete against larger ones. It also lays out ways big companies can use sumo tactics to bully rivals into submission--although the authors don't really seem to have their hearts in this side of the battle. While most of the examples come from the high-tech industry, Yoffie and Kwak range far afield to show that these techniques can apply in any industry.
While few of the executives mentioned in the book use martial arts lingo, the authors use the metaphors to make it easier for readers to understand these strategies. In judo, contestants move quickly to surprise opponents and neutralize their advantages. They stay balanced so they can respond nimbly to an enemy's attack. They get a grip and use their opponents' force against them to throw them to the ground. In sumo, intimidation often ends a match practically before it starts. Champion wrestlers make use of overpowering moves such as slamming into an opponent, lifting him off his feet by the loincloth, and marching him out of the ring. You can readily see how these techniques are employed by the bare-knuckle capitalists of Silicon Valley. Intimidation? That's called FUD (fear, uncertainty, and doubt) in the tech realm, where it has been used for years by giants such as IBM (IBM
) and Microsoft Corp. (MSFT
) to discourage potential customers from buying products of small-fry rivals.
Yoffie first used the judo and sumo metaphors when he was doing research for an earlier book, Competing on Internet Time, which chronicled the Web-browser war between Microsoft and upstart Netscape Communications Corp. Netscape operated like a judo master at first, in 1994, when it came out of nowhere to define a new market and leaped to a one-year lead over the software giant. But as time went on, Netscape tried to out-sumo Microsoft--challenging it for dominance of desktop computing. That brought the wrath of Bill down upon Netscape. Microsoft Chairman William H. Gates III used his company's cash hoard and its power over PC makers to demolish Netscape's daunting 90% market share. Ultimately, Netscape sold out to America Online Inc., the government sued Microsoft for using its monopoly illegally to stifle competition, and the rest is history.
After the earlier book was published, other judo examples started popping up. Yoffie learned, for instance, how Pepsi-Cola (PEP
) came back from the dead in the 1930s by using Coca-Cola Co.'s (KO
) own power--its vaunted network of loyal bottlers--against it. Pepsi matched Coke's price but doubled the size of its bottles, to 12 ounces. Coke couldn't match Pepsi's move because its bottlers were deeply invested in six-ounce bottles. It took Coke 22 years to respond, and by then Pepsi was entrenched as the No. 2 player in the soft-drink market.
Some of the moves the authors highlight are subtler. Meg Whitman, CEO of Web auction leader eBay Inc. (EBAY
), "gripped" online giant AOL (AOL
) judo-style and turned it into a partner rather than a competitor when excitement about the potential for online auctions hit fever pitch in 1998. Recognizing that AOL would want a role, Whitman at first made a deal with AOL to create links from a handful of key AOL Web pages to eBay and ultimately arranged to make eBay the exclusive auction provider on all AOL properties.
Yoffie and Kwak focus on three upstarts to tell their tale. The early leaders of Palm Computing used a handful of judo moves to make their company the leader in handheld computers. One key: Unlike Netscape, Palm didn't confront Microsoft directly and thus avoided becoming a target for obliteration. The entrepreneurs who started CNET Networks Inc. (CNET
) bested the powers in the technology-magazine business: CNET dared them to cannibalize their own print publications with online publishing operations. In the end, the established players were unwilling to do what was necessary to win online. And RealNetworks Inc. (RNWK
), the pioneer of streaming media on the Web, got rival Microsoft to hedge its bets and invest in Real--making it harder for the giant to decide to put Real out of business.
The fortunes of all three startups have declined in the past year because of the economic downturn, and, in some cases, strategic mistakes or new competitive threats. But the martial-arts metaphors keep working. In judo, the match isn't over when a small fighter throws an opponent over his shoulder. And it's the same in business. Just when a company decides the battle is over and it has won--that's when it's apt to find itself suddenly flat on its back staring at the sky.
By Steve Hamm
Get BusinessWeek directly on your desktop with our RSS feeds.
Add BusinessWeek news to your Web site with our headline feed.
Click to buy an e-print or reprint of a BusinessWeek or BusinessWeek Online story or video.
To subscribe online to BusinessWeek magazine, please click here.
Copyright 2001 , by The McGraw-Hill Companies Inc. All rights reserved.
Printer-Friendly Version
