2. What does it imply?
• Founding a start up is not for the feint of heart, much like leading an army
• Takes vision, determination and a confidence to continue with your instinct in
the face of adversity
3. The New Lanchester Strategy
• Takes it’s name from the English engineer, Fred W Lanchester
• He observed that size advantage on one side is the square of the number of
units in in the force
• Therefore, two opposing armies go to battle, one with a 2-to-1 advantage, the
firepower of the bigger army is quadrupled thus inflicting four times the
punishment
• So, concentrate your smaller force to attach to a single point of an enemy
• Once that battle is won, move onto the next small chunk with your
concentrated force and resources can overcome
• Theory based on the really old battle strategy of ‘Divide and Conquer’
4. The theory behind the New Lanchester
Strategy
• How much “fire power” will it take to beat an enemy?
• How can concentrating forces into a smaller portion of an enemy
be a better strategy for victory
Small
Army
Small
Firepower
Small
Force
5. Case studies
• Many prominent cases in history where a smaller force in sheer numbers has defeated
a much larger army
• Two such examples are the Battle of Thermopylae and the Battle of Trafalgar
6. Battle of Thermopylae
• Fought by the allied Greek states in 480 BC lead by King Leonidas of Sparta (The 300) against Persian
Empire of Xerxes.
• King Leonidas’ strategy was to defend the only passage way in
• Concentrated the battle at a single point
• Not have his inferior army flanked by the Persians
7. Battle of Trafalgar
• Lord Nelson fought the Battle of Trafalgar in 1805, facing the combined fleets of France and Spain with
his numerically inferior force
• Split the superior enemy fleet into two
• Decisive concentration of force to the rear of the Franco-Spanish fleet
• Franco-Spanish fleet lost twenty-two ships, without a single British vessel being lost.
8. Canon and Xerox
• Utilized a similar "battle" strategy in their conquest of Xerox
• Overwhelming rival in Rank Xerox
• Took a foothold in the market by first concentrating its resources
in Scotland
• Achieved a 40% market share
• Attacked selected and tightly defined regions in England
• Invested more and more in product development and sales
resource
• Final push into the lucrative London market
• Superior product and a numerically superior sales force. Rank
Xerox didn’t stand a chance
Check
Locate
Conquer
Expand
9. The New Lanchester Strategy in Business
• Transitioned into the corporate world for companies that are looking to enter
existing markets
• For a small company looking to take on the incumbents
• For a new start up looking to formulate a battle plan
10. Market Analysis
If a single company has 74% of the market, the market has
become an effective monopoly. For a start up, that’s an
unassailable position for a head-on assault. (think Microsoft)
11. Market Analysis
If the biggest player in a market has at least a 26% market share, the
market is unstable, with a strong possibility of abrupt shifts in the
company rankings. Here there may be some entry opportunities
12. Market Analysis
If the biggest player has less than 26% market share, it has no real
impact in influencing the market. Start ups who want to enter an
existing market find these the easiest to penetrate.
13. Rules Deducted
attacking a
company
that holds a
monopoly
head-on is
suicide.
no start up has
enough cash to
out spend an
industry leader
in marketing
resources
you target a
smaller aspect of
that industry
leader’s business
establish a
foothold
greater chance of
success
14. Example
• Start up creates a portable music
player to rival the iPod
• Attacking Apple head on is impossible
• So plan an attack on a particular aspect
of the business
• Target an unloved demographic that is
being ignored by Apple’s marketing
department
• Establish yourself as the key leader of
portable music devices for that
unloved demographic
15. How to Battle
• Define the battle
• Can win with concentrated resources
• Very likely to win a small battle
• Could lead to eventual market dominance
• The most important aspect of the Lanchester Strategy is the need
for concentration
• Split your much larger opponent’s force into pieces
• Take on each piece separately
16. The Take Away
1. The essence of New Lanchester Strategy is “Divide and
Conquer”
2. Split the enemy force into multiple elements
3. Attack one part at a time
4. Its all about committing the maximum amount of your
resources against the minimum amount of your enemy
