Now, in war, the evaluations must be made as follows: First, estimating the degree of difficulty; second, assess the scope of the operation; third, calculation of own forces; fourth, comparison of forces; and fifth, establish the chances of victory. Based on the characteristics of the terrain, the degree of difficulty is estimated. Depending on the degree of difficulty, the scope of the operation is evaluated. Depending on the scope of the operation, the calculation of own forces is carried out. Based on the calculation of own forces, comparisons with those of the enemy are evaluated. Based on the evaluations, the chances of victory can be established. – Chapter Four, Sun Tzu’s Art of War
According to Sun Zi, there are five stages that you must analyze to assess your chances of victory, and they mainly estimate the degree of difficulty; second, assess the scope of the operation; third, calculation of own forces; fourth, comparison of forces; and fifth, establish the chances of victory.
Let’s see how to apply these five stages to the evaluation of business strategy.
degree of difficulty
The first stage is of degree of difficulty, as elaborated by Sun Tzu, you have to look at the terrain to decide. The terrain in the war would refer to the culture of the target consumer market, the political and economic forces, the laws enacted for the economy and industry. In short, it means the characteristic of the target market. And from this, you can move on to the next stage of assessment, which is to assess the scope of the operation.
Scope of operation
The scope of operation in business would mean, if you are in retail, how many stores, what location, supply and transportation network, etc. If you like manufacturing, it would be the number of factories, where the factories should be, the distribution network, etc. And from all these factors, you can look at the third area and that is the calculation of self forces.
Calculation of Own Forces
The calculation of own forces would be all about human resources. Do you have the right person for each job? Do you have the right people to run your marketing campaign, set up your supply chain and logistics network? Do you have the “right” frontline staff? It is an assessment of the quantity and quality of your human resource that determines if you can handle the scope of the operation and, in turn, serve the target market.
Next is the fourth area, which is the comparison of one’s troops with those of the enemy. This fourth area would be evaluated if you are entering a market that has at least one established rival operating in it. Often, this is when you enter a foreign market. So you have to make a comparison of who is the competent staff, what are their areas of strength and weakness and what is yours as well. Does your strength allow you to capture a good portion of the foreign market to make your business viable?
After doing all this, only then can you determine and calculate your odds of victory. Once you have calculated your odds of winning, you can decide whether or not to execute your strategy.