Steinitz and market competition

"The hardest game to win is a won game" (Lasker)

  Speaking to a friend and co-worker, he asked me why I liked both chess ... He didn't understand this passion, I replied:

"Chess is a sport where you face the problems posed by the opponent you while you try to solve looking for the ways to provocate a problem to him so you get increased benefits lead you to victory, and where a error leads to backtrack all the way gone, do not tell me it's not exciting "

  He, as a marketing expert, understood at first, Why?  This idea  don't remind you to the marketing approaches a competitive market?

    Think, for example, in the mobile phone market, the different movements of any of the operators are intended to attract customers, that in the market at present, are in the customer base of a company from the competition ... marketing of any of them is aimed at creating "problems" (stealing customers) in the competition, while trying to solve the competitors posed to it (suffers theft attempts).

If you remember, in my previous post talked about the rules of Steinitz.

    In a very rude summary of them, you could say that when you are on advantage , you have to go for the opponent taking advantage of their weaknesses. If you are on "equal"  look for getting benefits ... and if we are worse, we have to defend ourselves understanding that maybe we have to sacrifice something in this defense

Think for a moment about what Microsoft has done since the '80s: Starting with a disadvantage to Apple for a product from my point of view clearly inferior, knew to hold and read your competitor's weakness.

     Apple believed in the quality of your product, itself closed in a specific environment.
 

    Microsoft reading this created the opportunity, allied with IBM, and due to that,  became a defensive less position in a better position to develop a competitive edge. What did it do there? Continued to attack strongly eliminating rival companies and products, to almost (or in many cases exceed) monopoly situation (in terms chess, given checkmate every opponent).

 A closest example we recently found in Spain.

    Until 4-5 years ago, in the mobile phone market in Spain, there was a clear picture in which there was a company (Movistar) clearly leading in market share, other (Vodafone) competing in a worthy 2nd Position also clearly differentiated, and another (Orange) had third place well away from the second.

  Since then the two main companies have made moves "classic" too conservative ... or in terms of a game, very defensive, did not attempt to keep attacking, defending the lead played. The third operator played hard trying to exploit the weaknesses of their two main rivals.

    Thanks to this air that gave competitors Orange, Orange has cut substantially disadvantage Vodafone market share, being now in technically equal, but with very different trends.

   Movistar maintains its top spot thanks to the enormous advantage gained, but would do well to avoid being distracted, looking for support in their strengths and attacking weaknesses of the competition, if you do not want to get into a fight for supremacy in the medium term.

   What  Steinitz said  in the nineteenth century is still true not only for playing chess also it can have the same readings in a business school than, for example, "the art of war."

Precursors of modernity

    Talk about precursors in business or in a sport over 2000 years old is nothing less than a great daring .... But we have to start somewhere and I chose these two characters because I understand that they were the first stones of chess and industry that we met at the s. XX.

Henry Ford  (1863-1947).

    He was the first car manufacturer who used the techniques of mass production and the assembly line, at the same time  perfected the rudimentary previous models. 

   Henry Ford introduced its construction-related developments in series and providing economic benefits to future users (the car went on sale for just $ 200). The main idea of Ford was that if mass produced cars, automobile production costs would be reduced considerably, which also contribute to lower the selling price on the street, a fact which would increase demand, market and profits.

   In early 1908, the first set of his new Ford-T at a single price and market revolutionary, $ 500, quite low compared to the $ 2,000 represented the average price of a car at the time. Success was swift and sales increased fivefold.

  From a strictly business point of view, the secret of Henry Ford was to have managed to combine three decisive factors.

• Standardization and mass production of all the parts that made up the vehicle
• The second factor was giving their workers a wage high enough (his competitors said "exorbitant "), five dollars a day, which achieved two purposes at once: to increase the standard of living of these, that immediately went to buy a Ford-T, and further lower selling prices. Employees&customers.
• Finally, Ford established a nationwide dense network of dealers, sellers and agents advertising experts, and encouraged other revolutionary payment system: the car buying in installments.

 

 

Wilhelm Steinitz (1836-1900).

 World Champion from 1886 to 1894. Defender of the scientific methods applied these as the key to solve the problems presented on the board.

   First dissected positions with its components, separating the essential signs which might be drawn solid strategic principles ... this seems so simple but it was a turning point in the history of chess.

   Calls "Steinitz rules" are a set of precepts that marked a major change in the game. These ideas-guide explains the various scenarios of fighting chess and answer basic and fundamental questions: why you win?, why you lose?, why  attack?, when attacking?, why defend?, how to attack?, how to defend?, what is the balance?, what to do in a balanced situation? and ultimately provides a framework where thinking and creativity of each player can develop and manifest successfully 

A summary of the essentials of the same:

• The dominant side can attack, and must do so, otherwise, you risk losing the advantage. You must attack the weakest point of the opponent's position.

• The effect of the weak and strong points is crucial, everything else is of secondary importance.

• Principle of proportion: The plan is everything and the time issue has secondary importance. In general the "rhythm" of the attack to be reduced more as less pronounced the advantage.

• The one on the defense has to want to defend and make temporary concessions

• Throughout balanced position, the two sides maneuver trying to tip the balance in their favor. But a balanced position also generates other balanced, if players play with precision. Must play to maintain the cooperation of their pieces 

  These rules are  fully applicable to acompetitive market, where the position of the company has market advantage, should not relax and keep "attacking" to prevent competition regain ground. In the next post we will see examples in both directions