The Art of War - Sun Tzu
Who is Sun Tzu?
Sun Tzu was a Chinese military strategist, general, and philosopher who lived during the Eastern Zhou period, around the 5th century BCE. He is best known for The Art of War, a book on military strategy that has been widely influential beyond warfare, shaping business tactics, leadership, and competitive strategy. Despite being written over 2,500 years ago, its principles remain highly relevant in modern times, offering insights into strategic planning, decision-making, and conflict resolution across various fields.
I analysed this book from the perspective of a business consultant or entrepreneur, seeking insights that would support my growth in the business world. To help interpret some of the language and examine the book through the lens of business strategy, I used AI, which proved to be incredibly useful and significantly enhanced my understanding of the text.
Below I have dissected my learning per chapter.
Making Plans
There are five key ways to analyse a business and its marketplace:
The Way – Alignment with values and purpose, stakeholder relationships, and overall strategic direction.
Heaven – Understanding market cycles, economic conditions, and external forces that impact business.
Earth – Assessing the market landscape, infrastructure, and geographic distribution to position effectively.
Command – Leadership and decision-making processes that influence execution and adaptability.
Discipline – Company culture, operational efficiency, and internal values that sustain long-term success.
When settling on a plan, it must remain dynamic. A rigid strategy is vulnerable to disruption, whereas a flexible approach ensures resilience and adaptability.
Strike with chaos, act in unexpected ways to keep competitors off balance. If a competitor is prepared, be ready to counter their moves. If they are strong, avoid direct confrontation and instead seek alternative paths to success.
Waging War
If you are undertaking a business transformation, ensure it is not drawn out. A prolonged process can lead to miscalculations and unnecessary expenditure. It also provides competitors with opportunities to exploit your actions, as they will be able to anticipate your moves.
Delays are rarely wise; no business profits from a long, drawn-out strategy. To understand what is happening in the market, you must first determine the expected outcome.
Buying products from distant sources is expensive due to transportation costs. Additionally, holding excessive stock can be costly and inefficient.
If possible, and where appropriate, acquire valuable information or personnel from competitors to strengthen your own business.
Celebrate meaningful wins but avoid drawn-out, meaningless events.
Strategic Offensive
Avoid price wars, this is the weakest form of product differentiation. It is easier and more effective to stand out in other ways. Progress as much as possible within current market conditions, as market cycles are unpredictable.
If your business is not structured to compete directly with a larger or more prepared company, focus on differentiation rather than direct competition.
Ensure that your management team is strong; weak management results in a weaker company overall. Poor leadership leads to disorganised staff and substandard output. A manager or executive must be 100% committed to a decision; hesitation or uncertainty can weaken the company.
If employees lack direction, failure is inevitable. Everyone must be aware of potential unexpected challenges. A business leader who knows themselves but not their competitors will struggle to succeed.
Forms & Dispositions
Understanding how to succeed is not enough, you must also identify and exploit your competitors' vulnerabilities.
To defend your market position, consider infrastructure and geographical distribution. To gain market share, assess various economic and industry conditions.
Choose battles you know you can win.
“Market landscape determines measurement,
Measurement determines estimation,
Estimation determines calculations,
Calculations determine comparison,
Comparison determines
Victory.”
Potential Energy
Understanding both your strengths and weaknesses allows you to excel.
Disorder arises from order.
Fear stems from courage.
Weakness follows strength.
A wise business will present opportunities that competitors may be tempted to seize. If they take the bait, they expose themselves, allowing your business to counter with a superior product or service.
A strong business exploits market trends, brand strength, and available resources.
Empty and Full
Being first to market provides a fresh perspective and access to customers. If you are not first, you must work much harder to gain traction.
Position yourself where competitors find it difficult to reach you and where they do not expect you to be. Enter spaces where competitors hesitate to move and push them towards less advantageous directions.
Never disclose your full strategy, as competitors will focus their attacks accordingly.
Strength comes from forcing competitors to prepare for multiple possibilities.
Conduct thorough market research to understand competitors' strengths and weaknesses. Identify areas where their flaws can be exposed.
It is difficult to replicate success in the same way more than once due to ever-changing market dynamics.
The Fray
The fray refers to direct battles such as price competition.
Even with maximum effort, price wars are often unwinnable. Entering a new geographical market without local knowledge is risky. If everyone in the business is aligned towards a goal, synergy improves, and efficiency increases.
Important tasks should be completed in the morning when employees are at their most productive.
The Art of War
“Do not advance uphill.
Do not oppose an enemy with his back to a hill.
Do not pursue an enemy feigning retreat.
Do not attack keen troops.
Do not swallow a bait.
Do not thwart a retreating army.
Leave an escape route for a besieged army.
Do not press an enemy at bay.
This is The Art of War.”
The Nine Changes
There are strategic choices to be made:
Some roads should be taken, while others should be avoided.
Some competitors should be challenged, while others should be ignored.
Some markets are worth entering, while others are not.
You must prepare in advance rather than waiting for competitors to make the first move.
Five Potential Pitfalls of a Manager:
Recklessness
Cowardice
Hot temper
Over-concern with honour
Excessive concern for staff—your role is leadership, not friendship.
On the March
Beware of ambushes and spies.
If a competitor is significantly weaker than you and engages in a price war, ignore them and avoid engagement.
If a competitor appears friendly while simultaneously increasing resources, this may signal an impending attack. If a competitor moves aggressively and suddenly, they may be running low on resources.
Expressions of peace without formal agreements often indicate deceit. If a competitor has an opportunity to gain an advantage but does not take it, they may be resource-depleted this is the moment to strike.
Never underestimate your competitors.
Discontent among employees is often a sign of poor leadership. Ensure that workers are loyal and operating in good conditions. Avoid giving rewards as an act of desperation effective management is the key to achieving the best outcomes.
Forms of Terrain
In established markets, the business with the strongest supply chain has the advantage.
In markets with high switching costs, be fully prepared before entering, as exit options will be limited.
In markets where first-movers face disadvantages, offer bait rather than taking bait. Let competitors move first before responding.
In niche markets, enter only if there is a genuine gap; otherwise, avoid them.
In premium markets, if you are the first entrant, secure your position. If you are not, do not enter directly—distract competitors by shifting focus to another market.
Know yourself and your competitors.
The Nine Types of Markets
Scattered ground – A stable market position.
Light ground – Initial market entry.
Strategic ground – High market competitiveness.
Open ground – A market with easy accessibility.
Crossroad ground – Intense industry competition.
Heavy ground – Distant markets with limited resources.
Bad ground – Highly regulated markets.
Enclosed ground – Markets with limited resources and high dependency.
Death ground – Markets with obsolete technology.
Speed is essential when attacking—it can determine everything.
Take care of your employees; do not overwork them.
It is often wise to scrutinise competitors’ intentions.
Attack by Fire
Never act without potential gain.
Never deploy resources without the expectation of victory.
Never engage in conflict unless absolutely necessary.
Espionage
Prior information,through thorough market research enables success. Smart and intelligent market research should always be celebrated.