36: 36 Strategies of Espionage

Author: Yao Huifei
Publisher:
Publish Date: 2006-06-01
Features: Case Study 7: Huaying Company’s "Winning by Retreat" At the bustling intersection of Wai Da Jie outside Hong Kong’s prosperous streets, the shopping malls built by Lize Company and Huaying Company began construction almost simultaneously. Li An, the chairman of Huaying Company, was adept at gathering market information and business intelligence. After analyzing the intelligence data, he knew that in terms of strength, his company was far no match for Lize Company. Therefore, after learning that Lize Company planned to operate high-end goods, he decided to focus on mid-low-end products for his company and designed the internal layout of the mall accordingly. He also shared his ideas with the chairman of Lize Company during a weekend tennis game. The over-sixty-year-old chairman of Lize Company patted the shoulder of Li An, who was twenty years younger, and said, "Alright, alright. Let’s keep to our own waters and prosper together. Don’t worry, old boy. If you can avoid me, I won’t make things difficult for you." Everything was proceeding smoothly. After a period of busy preparations, the mall opened for business. However, unexpected twists of fate awaited. One morning two months later, Li An, who had just woken up, heard the phone ring. The caller reported, "Chairman, reliable intelligence suggests that Lize Company, due to recent financial issues, plans to convert the newly built mall into one focused on mid-low-end products." What should he do? Li An found himself in a dilemma. The new mall was almost completed, and continuing to operate it as originally planned would inevitably lead to conflict with Lize Company. "A dead camel is bigger than a horse." Although Lize Company was facing financial difficulties, they were still relatively wealthy and well-resourced. Competing with them would undoubtedly lead to defeat. However, the project was nearing completion, and the money spent was irrecoverable. Li An once again gathered intelligence from various sources and conducted further market research. He discovered that on this bustling commercial street, although there were many restaurants, they were mostly luxurious mid-to-high-end establishments. The few small restaurants that did exist were doing exceptionally well, with one Sichuan-style snack shop thriving in particular. A bold plan was presented to the board—convert the mall into a Chinese Snack City. Li An’s reasoning was sound: the location was prime, with heavy foot traffic, ensuring a large number of diners. Most of them were ordinary people, making them ideal customers for snacks. Moreover, even the wealthy would come to sample different flavors. They could hire chefs from the mainland who were skilled at preparing authentic, diverse, and affordable dishes. The board found Li An’s idea excellent, and converting the mall into a snack city would not be difficult. Li An’s proposal was approved. The snack city was a huge success, attracting a steady stream of customers. By the end of the year, its net profit was 30% higher than Lize Company’s mall.
Commentary This is a story about "winning by retreat." After extensively gathering business intelligence, Li An adopted a three-pronged strategy of "retreat": First, when the two malls were under construction, he decided on his own business strategy based on Lize Company’s operational direction. Second, upon learning that Lize Company was adjusting its strategy due to financial issues, he immediately made changes. Third, based on his company’s situation, he carved out a unique path and achieved success. In business warfare, it is crucial to study information and intelligence, adapt to market changes, and continuously adjust strategies by "retreating" to achieve unexpected results through "mobile warfare."
Summary Ancient military texts suggest that if the enemy holds a clear advantage and your side cannot compete, it is wise to temporarily avoid their to preserve your own strength. In unfavorable situations where the enemy is far stronger, strategically retreating to avoid direct confrontation and then seeking opportunities to regain momentum is the highest strategy in tactics. Because no battle guarantees victory, in the ever-changing dynamics of combat, alertness is essential to cope, and flexibility is key to achieving goals. Therefore, retreat is not a sign of cowardice, nor is it a last resort for heroes. "Tolerate for a while, and the winds and waves will calm; retreat a step, and the sky will broaden." "If the green mountain remains, there will always be firewood to burn." Preserving strength and hiding one’s talents can pave the way for a comeback. P472-474