CHAPTER 1

DETAILED ASSESSMENT
AND PLANNING ( 始计 )

UBMM1011
Sun Zi’s Art of War and Business Strategies
13 Chapters of Sun Zi

1. Detailed Assessment and Planning ( 始计 )

2. Waging War ( 作战 )
3. Strategic Attack ( 谋攻 )
4. Disposition of the Army ( 军行 )
5. Forces ( 兵势 )
6. Weaknesses and Strengths ( 虚实 )
7. Military Maneuvers ( 军争 )
8. Variations and Adaptability ( 九变 )
9. Movement and Development of Troops ( 行军 )
10. Terrain ( 地形 )
11. The Nine Battlegrounds ( 九地 )
12. Attacking with Fire ( 火攻 )
13. Intelligence and Espionage ( 用间 )
Chapter 1
Detailed Assessment and Planning ( 始计 )

Chapter outline
 Thorough analysis before war
 5 factors and 7 dimensions
 War is about deception
 Business application:
 Importance and elements of planning
 Thorough Analysis Before War

The conduct of war is a matter of vital importance to the nation.

It determines the survival or death of the country.
It is a matter of life and death (of the people and their ruler).
It must be studied and examined thoroughly.

 Thus analyse and study the FIVE factors carefully.

 Compare them against (those of the enemy) so as to
understand the changing conditions and circumstances (of
war) and to assess the chances of victory.
5 Factors

These 5 factors are:

1) Moral influence
2) The weather
3) Terrain
4) Generalship
5) Doctrine and law.

 Every general must know these FIVE factors.

 Those who can master them will win.
 Those who cannot master them will not win.
5 Factors: (1) Moral Influence

1. Moral influences:
 Moral influences refers to measures and policies that
align the people with the sovereign so as to be in
complete agreement and harmony with each other.
 In this way, the people will be prepared to co-exist with
as well as die for the sovereign without and fear of
dangers.

Business: Political Leadership

 A capable government will provide political stability and
hence attract foreign investments and stimulate
economic growth, while a corrupt government will only
sow the seeds of economic decay.
 5 Factors: (2) The Weather

2. The weather:
 The weather refers to the contrasting changes of night and day, the
coldness of winter and the heat of summer, and seasonal changes.

Business: External factors

 Business cycles such as recessions, growth, stagnation, inflation.
 Government policies, regulations, and incentives
 The cultural and social norms
 The technology
 New market institutions and systems
 Other general economic and social factors such as demographic,
consumer behaviour, institutional structures.
 5 Factors: (3) Terrain

3. Terrain:
 Terrain refers to whether the route to be taken is long or short,
whether the ground is treacherous or safe, wide or narrow with regard
to ease of movement, and whether the ground will determine the
death or survival (of the army).

Business: Physical or infrastructural factors

 Firm’s location and position in marketplace will affect how it can
compete, as it may offer certain advantages or disadvantages.
 Ex:
 once firm’s location is fixed, it dictates the nature of its competition, its
relative market position, and its access to inputs such as raw materials,
labour, capital, infrastructures and etc.
 If one needs to tap cheap labor, one should move operations to a developing
country. The mass migration of Taiwan's sunset industries to mainland China
exemplifies this.
5 Factors: (4) Generalship

4. Generalship:
 Generalship of a commander refers to his qualities of wisdom,
trustworthiness, benevolence, courage and discipline.

Business: Corporate Leadership

 In business, the CEO plays and important part in ensuring the
success and prosperity of the firm.
 Leader must have:
 Wisdom
 Trustworthiness (Sincerity)
 Benevolence
 Courage
 Discipline (Strictness)
5 Factors: (5) Doctrine and Law

5. Doctrine and law:

 Doctrine and law refer to organisation and control, management
systems and procedures, and the command and control structure for
the deployment of resources.

Business: Corporate Structure and Organisation

 Is reflected by the way it is structured and organised.
 This aspect includes effectives policies, programs, operating
procedures, channels of communication, lines of authority, and
responsibility.
 These elements reflect the corporate culture or philosophy.
The 7 Dimensions

 Thus in planning, there are (SEVEN) dimensions which

a general must analyse and compare with those of the
enemy so as to understand the changing conditions and
situations during war and assess the chances of victory.
 The 7 Dimensions

1. Which ruler has greater moral influence?

2. Which general is more able and has greater abilities and skills?
3. Which side (army) is able to better exploit the weather and
terrain?
4. Which side (army) is able to execute and implement law and
order more effectively?
5. Which side (army) has more and stronger troops?
6. Which side (army) has better trained officers and men?
7. Which side (army) is more enlightened in the administration of
rewards and punishments?

“From these (seven) dimensions, I will be able to diagnose and

predict victory and defeat.” ~Sun Zi
7 D + 5 F = 8 Factors
 These SEVEN dimensions contain the FIVE factors. Thus the five factors
and seven dimensions may be re-classified into EIGHT factors for
consideration in the planning for war.

 The 8 factors of strategic planning in war:

Sun Zi Management application

1. Moral influence Political leadership

2. Generalship Corporate leadership

3. Weather External factor

4. Terrain Physical or infrastructural factors

5. Doctrine or law Corporate structure & organisation

6. Strength Competitive edges

7. Training Human resource development

8. Discipline Motivational factors

Addition to the above rules…

 The general who does not adopt my strategies and plans

will be defeated when he is deployed (for battle); he
should be removed.
 The general who adopts my strategies and plans will win
when he is deployed (for battle); he should be retained.
 Besides adopting the effective proposed plans and
strategies, the general must create and take advantage of
situations that are beyond the normal rules of military
engagement.
 Creating situations demands that one (general) must act
advantageously so as to control the balance of power.
Marketing war in business…

 4 conditions governing the desirability are very relevant

to the situation of a company, say wanting to declare
marketing war on its competitors.
 In this case, a marketing war should only be declared if:
 There are definite gains to be made, such as increased sales,
market share, profits, or higher profile for the company.
 There is a strong chance of wining.
 It is a measure of last resort; for example, if its market share can
never be increased unless it goes on the offensive.
 It has built up a ready line of defense, such as financial resources
to back up its campaign.
WAR IS ABOUT DECEPTION

How to use deception as a tool to create advantages

for oneself?
Deception = Camouflage…
War is About Deception

Military deception is the art of misleading the enemy into

doing something, or not doing something, so that his
strategic or tactical position will be weakened.
~ Charles Cruickshank

 When you are ready, you try to appear incapacitated.

 When active, you pretend inactivity.
 When you are close to the enemy, you appear distant.
 When far away, you pretend you are near.
War is About Deception

 If the enemy has a strong position, entice him away from

it.
 If the enemy is confused, be decisive.
 If the enemy is solid, prepare against him.
 If the enemy is strong, avoid him.
 If the enemy is angry, frustrate him.
 If the enemy is weaker, make him arrogant.
 If the enemy is relaxed, make him work.
 If the enemy is united, break him apart.
 Attack him when he is unprepared.
 Leave when he least expects it.
War is About Deception

You will find a place where you can WIN.

You cannot first signal your intention.

 However, the plan cannot be discussed, decided nor

divulged beforehand.
 Secrecy in the deliberations of battle plans must be
strictly upheld.
 Any leak of the plans could bring about dire
consequences.
Creating Advantages Creatively

 In war, the aim of DECEPTION is to gain

advantages for oneself through the creative
use of strategies and other means:
 Strategies that are aimed at exploiting the
vulnerabilities of the enemy.
 Strategies intended to erode the capabilities of
the enemy.
 Strategies that rely on applying the concept of
relative superior.
 Strategies that capitalizes on the element of
surprise and unpredictability.
 Summary

 Detailed Assessment and Planning explores the FIVE key

elements that define a successful outcome (moral influence,
the weather, terrain, generalship, doctrine and law).
 By thinking, assessing and comparing these points you can
calculate a victory and deviation from them will ensure
failure.
 Remember that war is a very grave matter of state.
BUSINESS APPLICATION
Interesting Statistic!

 There are about 497 billionaires & 11 million

millionaires in the world (2005).

 There are some 3.3 million millionaires in

the USA = 1 millionaire per 100 people.

 Some 30% of Korean who migrated to USA

own business.

 There are 3 million businesswomen in 1980,

and 8 million businesswomen by 2000.
Gary Gagliardy, America's leading authority on
using Sun Zi's methods in modern competition,
writes:

“Before I discovered The Art of War, I tried starting

two businesses. The first consumed money for
almost two years before we closed it down. The
second fell apart and was sold within a year. After I
started studying and using Sun Zi's methods, the
next business that I started went on to become
one of the Inc. 500 fastest growing privately
owned businesses in America."
How to Relate Sun Zi With Business?

 80% of small business go out of business within their 2

years. WHY?
 Sun Zi is the template to explain (teach/guide) how
business can survive and prosper from the battles of the
marketplace.
 Success goes not to the strongest or most aggressive but
to those who best understand their situation and what
their alternatives really are.
 Detailed Planning
The conduct of war is a matter of
vital importance to the nation.
It must be studied and examined thoroughly.

 Strategic analysis is not the same with traditional planning.

 Planning deals with internal organizational needs.
 Strategic analysis is about understanding how to survive in
dynamic and competitive environment.
 Strategy focuses on external environment needs.
Detailed Planning

 Develop a clear vision and mission statement.

 Perform a SWOT analysis.
 Good leaders are flexible enough to respond with the
best approach for the situation.
 Set up company rules for employees to comply.
 Clearly state all the job description for each post.
 Employ capable personnel.
 Building a positive organisational culture
 Introduce bonus scheme.
 Be more creative to gain advantages over your
competitors.
IF WAR IS ABOUT DECEPTION,
THEN HOW ABOUT BUSINESS?

Deception is a tool to create advantages for oneself!!! Not

involving in illegal activities or committing business crimes!!!
Philosophy of Business Deception

 Gaining advantages must not be confused with outright

attempts to cheat.
Gain Advantage ≠ Cheat

Example:
 In business, if one cheats and deceives deliberately, he
may end up in jail.
 However if he uses creative and legal ways to attract
customers or to increase his business, he is merely trying
to gain advantage over his competitors.
International firms: How Unethical They Can Be…

Former WorldCom convicted of fraud and conspiracy charges for

CEO Bernard massive accounting scandal estimated at $11
Ebberswas:- billion.

Adelphia founder
John W. Rigas and were accused of looting the company and
his son, Timothy cheating investors out of billions of dollars.
Rigas:-

face scrutiny regarding questionable accounting

Freddie Mae and
practices that could place millions of mortgages
Freddie Mac:- of United States homeowners at risk.

Merck and have had to withdraw drugs that have been

GlaxoSmithKline:- deemed unsafe for public use.

5-31
Child labor cases uncovered in China

 China said it was investigating whether hundreds or

perhaps thousands of children from poor areas in the
southwest part of the country had been sold to work as
slave laborers in booming coastal factory cities.
 The children, mostly 13 to 15 years old, were often
tricked or kidnapped by employment agencies working in
an impoverished part of western Sichuan Province, and
then sent to factory towns in Guangdong, where they
were often forced to work as much as 300 hours a month
for little money, according to government officials and
accounts from the state-owned media.
Competitive Analysis

FIVE factors decide your business success:

1) Analyze your business mission.
2) Analyze your business trends.
3) Analyze your business market.
4) Analyze your business decision-making skills.
5) Analyze your business system.
Competitive Analysis

FIVE factors decide your business success:

1) Analyze your business mission.
2) Analyze your business trends.
3) Analyze your business market.
4) Analyze your business decision-making skills.
5) Analyze your business system.
Competitive Analysis

FIVE factors decide your business success:

1) Analyze your business mission.
2) Analyze your business trends.
3) Analyze your business market.
4) Analyze your business decision-making skills.
5) Analyze your business system.
 Is Apple the PC Market Share Leader?

Global Top 5
 1. HP, 14.455 million
2. Acer, 10.796 million
3. Dell, 10.283 million
4. Lenovo, 8.31 million
5. ASUS, 4.318 million

USA Top 5
 1. HP, 4.608 million
2. Dell, 4.236 million
3. Acer, 2.028 million
4. Apple, 1.749 million
5. Toshiba, 1.565 million
Detailed Planning

You will find a place where you can WIN.

 You must be creative.

 You must find an opportunity that assures PROFIT.
 You can only make a profit if you add a lot of value to a
product.

The one and only core purpose of business is to make profit.

~Milton Friedman, American economist.
BUSINESS TOOLS FOR
DETAILED ASSESSMENT

1) SWOT Analysis
2) Porter’s Five Forces Analysis

    Strategy without tactics is the slowest

route to victory. Tactics without strategy
is the noise before defeat. ~ Sun Zi
Business Philosophy

The conduct of war is a matter of

vital importance to the nation.
It must be studied and examined thoroughly.

 Strategic analysis is not the same with traditional planning.

 Strategic analysis is about understanding how to survive in dynamic
and competitive environment.
 Planning deals with internal organizational needs.
 Strategy focuses on external environment needs.
Perception is strong and sight weak. In strategy it is
important to see distant things as if they were close and to
take a distanced view of close things.
~Miyamoto Musashi 1584-1645,
Legendary Japanese swordsman
 

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