ANCIENT INDIA HAD A LOT GIVE GIVE. SURPRSINGLY, IT HAS SOMETHING FOR TODAY'S SAVVY ENTREPRENEURS TOO. HERE'S HOW.
In this era of fast paced business environment where disruptions are abound and the future is very uncertain, it seems rather ironic that we should have a look at our past to ascertain the future. However, Indian History has always been a Pandora box, full of lessons for everyone, irrespective of their field of profession. Chanakya was one of the world’s shrewd statesman, guiding a young ruler on how to effectively manage his burgeoning empire. His celebrated work “Arthashastra” is a treasure trove for any policy aficionado. The Arthashastra is a collection of 15 books which comprise of a variety of topics like espionage, warfare, foreign policy, economics, science, arts, alliance and the judiciary (Mark, 2020). In its simplest form, the Arthashastra is a guide for a king on how to manage his empire. However, the book has inherent teachings for everyone. The explanation of Chanakya has been so succinct that it is completely relevant even to this day.
The book literally redefined India’s ancient history and changed the perception of how these ancient kingdoms administered the lands. I have focused on Book 7 of the Arthashastra- The Six Fold Policy. This book essentially focuses on foreign policy of an ancient kingdom and how to react in different situations. I have tried to envisage a kingdom as a business entity and its reaction as business decisions in an ultra-competitive market.
Broken down below are the six main policies in Chanakya's book:
SANDHI
Sandhi essentially means to make peace with your rivals. The rationale behind such a move is to save precious resources, dampen further escalation of conflict, stop further decline and make progress rather than engaging in a disastrous battle. In the business world, such a decision would make sense when:
1.Profits are dwindling for both the competitors
2.Sales have stagnated for both
3.Market Share is constantly in a flux, leading to uncertainty.
In such a scenario, “joining hands’ would be the best outcome for all the parties involved. This can be done by signing an MoU or a Memorandum of Understanding or entering into a Joint Venture. By combining forces rather than working against each other, the entity can focus on more productive means of actually improving business performance.
WHEN VODAFONE MET IDEA
The joint venture of VI (Vodafone & Idea) is a classic example of Sandhi. After fighting it out for decades in the Indian telecom sector, the arrival of a disruptive Jio forced them to join hands to survive the cutthroat competitive landscape. Due to a price war, profits were being squeezed. But a combined entity has allowed them to weather the storm. The merger giver them greater financial leverage as shown below.
VIGRAH
Vigrah essentially means engaging in warfare with your rivals. This is an assertive strategy which can be employed when the kingdom is in a position of strength. The main motive behind such a move is to consolidate a position of power by annihilating the opponent. In a business context, this means outgunning the competition through an actual price war or promotional attack. This is usually done by companies who have a dominant market share in any industry or segment & want to further enhance their position by directly engaging with their rivals.
BRAND WARS: PEPSODENT’S PROMOTIONAL ASSAULT ON COLGATE
In 2013, Hindustan Unilever’s (HUL)’s Pepsodent launched an advertisement campaign which directly compared the germ fighting capacity of both toothpaste directly. The ad campaign showcased how Pepsodent’s product was 130% more effective infighting germs. This is a good example of how a company uses Vigrah to fight its rivals.
BATTLE OF SALE: AMAZON VS FLIPKART
To entice more and more users to start online shopping, many e-commerce giants have started their own sale day campaigns and have engaged in price wars. Amazon’s “Great Indian Sale” & Walmart owned Flipkart’s “Big Billion Days” is a prime example of such a price war in full flow in India. Both the platforms offer huge discounts in the same period & also actively "brandalize" their cheaper prices to attract consumers.
ASANA
Asana means staying indifferent to the workings & activities of your enemy states. Such a strategy is only feasible when your own kingdom is a real behemoth & the combined effort of all your enemies will have a marginal impact on your resources. Adopting such a strategy would enable a kingdom to improve its own internal condition. For instance, instead of beefing up the army, a kingdom can divert resources in enhancing its grain distribution system or in improving connectivity across the kingdom. A business can adopt Asana when:
1.It is a dominant leader in a fragmented market.
2.It has a dominant market share & huge cash reserves.
3.It has a vast technical lead in a tech-cantered sector/industry.
APPLE: THE TECH COLLOSAL
Apple Inc. has grown so big over the years that its impact on American lives has been undisputed. From redefining the mobile phone experience to saving a dying music industry from piracy and from shifting the focus on product design to expanding the capabilities of chips (the A Series Bionic chips), the company has kept on reinventing itself to stand the test of time. It’s ecosystem is so well integrated that it is difficult to escape it once the foot is set in. Adding a legion of devout followers, the company seems indestructible. The cash reserves of Apple alone are so huge that it could buy scores of established tech companies from Silicon Valley!
SANSHARYA
Sansharya means submitting to others. Using a clichéd analogy, it means when a big fish eats up a small fish. During Chanakya’s time, there were a lot of smaller kingdoms who had no means to defend themselves against their larger counterparts. Chanakya advised such rulers to simply submit to their superior opponents rather than causing bloodshed and loss of treasury for zilt. In the business world, we see such incidents very frequently. An emerging start-up (example: ring, aurora, 2mg) is usually acquired by an established player. Even a former giant past it’s prime (eg: Motorola & Dell) is acquired by the new dominant player. Hence, in today’s business world supercharged by venture capital & private equity, Sansharya is becoming more & more common.
SOME BIG TECH ACQUISITIONS EMBIBEING SANSHARYA
1.Google buying Fitbit to enter the health-tech space.
2.Facebook acquiringOculus VR to improve and modernize its UX.
3.Apple acquiring Intel’s smartphone modem segment to enlarge its mobile microchip lead.
4.Microsoft buying Github to gain social media data insights.
DWADIBHAV
Dwadibhav means having a nuanced double edged strategy & striking a real balance between alliance & attack. Chanakya believed that such a move was necessary for the long term survival of any empire irrespective of its size and stature. The presence of allies could balance out unexpected attacks & an aggressive strategy could allow the empire to expand freely without any constraints. In business, this too can turn out to be a boon. Having reliable partners can help in surviving business downturns (especially in seasonal & cyclical businesses). And having strong competitors can keep a company on its toes, encouraging innovation & efficiency and reducing the chances of stagnation.
THE AMAZON-WHOLEFOODS-WALMART TRIAD
When Amazon acquired Wholefoods for $13,7 billion, the move was seen as a direct threat to Walmart’s massive offline chain of stores. Amazon made its Prime Membership more lucrative, ruffled some feathers at Walmart & even used some Wholefoods stores as hub for nearby delivery (as portrayed below). Thus with one stone, Amazon killed three birds.
PARTING THOUGHTS
It has been centuries since the Arthashastra was written. But the ingenious work of Chanakya has made sure that it is still relevant today in all important fields. Its extensive writings for the ruling elite still surprisingly apply to broad categories like economics, public policy, finance & even business to this day. I feel that the western line of thought has the same essence as our ancient scriptures. What our scriptures lack is that oomph or glamour which is omnipresent in western ideas in abundance. It is time for India to take a trip down memory lane, discover such hidden gems and learn and more importantly, inculcate these ancient teachings in our lives.
STAY SAFE.
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