Sometimes, your ability cannot match your aspirations: business conditions are harsh, competitors are huge and powerful, and your resources fall short in many ways… Then choose the path of losing wisely.
Some say strategy is to grow, others say it is to win or gain competitive advantage, and many say it is for sustainable development… It all sounds grand and appealing, but few say strategy is to shrink or cut back, and fewer still say it is to withdraw from certain industries or markets. Almost no one says strategy is to… fail in the optimal way.
Understanding strategy solely as a means to win, grow or develop sustainably is an optimistic view in a “bright” context with favorable business conditions. But if listeners and learners mechanically apply it to their businesses, it can be extremely dangerous. Strategy for competing and winning is beyond dispute, but sometimes ambition exceeds capability: business conditions are harsh, competitors are large and powerful, and our resources fall short in many respects… How can we win then?
In that situation, choose to lose wisely. Confronting the opponent head-on and insisting on defeating them is like banging your head against a rock. Losing is different from giving up, although in many cases giving up can also be a strategic and wise choice.
Losing means accepting second, third, or a lower position so that competitors do not notice you, or do not care even if they do. The business's goal is then not to be number 1, lead, or win overwhelmingly, but to make necessary concessions and wisely keep a low profile, as in the saying “There is no shame in stepping aside for an elephant.”
Leaving cities for rural areas can also be seen as a strategy of accepting defeat in urban markets, as many businesses have done and continue to do. Leaving the high-end segment to focus on the lower end is essentially a strategy of conceding defeat in the high-end segment, which many businesses still use. Holding on in taxis while shifting investment to app-based motorcycle taxis means conceding the taxi market while seeking victory in the motorcycle taxi market. Shrinking one product line while expanding another is a strategy of retreating in the reduced line to seek opportunities elsewhere.
A banking tycoon once adopted a strategy of failure (in banking) to expand into sugar and other fields. A phở tycoon once adopted an exit strategy from the phở business to... explore what else he could do, without yet knowing what that would be... Who says these failures or withdrawals lack strategy or wisdom?
Hundreds or thousands more examples could demonstrate that losing or accepting defeat on one front—or even every front—to retreat, do something else, and open another front is also a strategy that needs careful, professional planning.
We often talk and hear about winning strategies or growth strategies, but the strategies many businesses regularly adopt are retrenchment strategies, divestiture strategies, liquidation strategies, and even exit strategies.
Naturally, victory and growth are highly attractive, so many businesses plunge ahead regardless. Shrinking, giving up or withdrawing is always less appealing, if not extremely difficult. Yet, as noted above, both advancing and retreating require strategy. Taking one step back to move two forward, or retreating to minimize damage, requires extremely careful calculation and consideration.
Why not retreat or exit wisely to devote your energy and resources to something else?
Collected.
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