1. Judo Strategy

2. Scope
• Background
Judo • Judo Techniques
• Weakness of Judo
Strategy
• Concept and features
• Competitive advantage and competitive innovation
Strategic
Intent • How does Judo Strategy sit with Strategic Intent
• Case Study
EBay • Conclusion
IIPM - AHMEDABAD 2
3/26/2010

3. Background
• The term first used (in business context) by David B.
Yoffie and Michael A. Cusumano
• Strategy for smaller players to take-on heavyweights
• Example: Netscape v/s Microsoft, Palm OS v/s Microsoft
• But, those companies didn’t do well..!
• So, was it just a metaphor..?
• Is it a full-fledged strategy?

4. Judo Techniques
• Go for the niche
Movement • Follow through fast
• Stay below the radar
• Grip your opponent
Balance • Do not compete head-on
• Push when pulled
• Leverage opponent’s assets
Leverage • Leverage opponent’s
partners
• Leverage opponent’s rivals
3/26/2010 IIPM - AHMEDABAD 4

5. Movement
Red Bull entered the U.S.
market as a niche product
Avoid large scale
marketing and instead
sold through bars/clubs
In 2005 it enjoyed a 65%
share of the $650
million energy drink
market.
3/26/2010 IIPM - AHMEDABAD 5

6. Balance
P&G react to Drypers
market entry with
coupons for $2
Drypers announced P&G
coupons could be used
on Drypers
Drypers had used P&G
to underwrite its own
campaign
3/26/2010 IIPM - AHMEDABAD 6

7. Leverage
Coke has a vast network
of bottlers selling in 6.5
oz bottles
Pepsi sold their products
in 12 ounce bottles for
the same price
Pepsi turned Coke’s
advantage against them.
3/26/2010 IIPM - AHMEDABAD 7

8. Why “Judo-only” may fail..!
Success..!!
Competitor
Judo
Judo
You
3/26/2010 IIPM - AHMEDABAD 8

9. Weaknesses of Judo
• Other stakeholders ignored
Competition driven • Reactive
• Will not contribute to longer term
Neglects advantages
competencies • Does not create barriers to entry
Tactical rather than • Not a long term strategy
strategic • Not comprehensive or holistic
3/26/2010 IIPM - AHMEDABAD 9

10. Failures of Netscape and Palm
Netscape: - (Violated Judo Rules)
•Refusal to cooperate with Microsoft and AOL: Remember
leveraging rival’s resources?
•Refusal to offer it free-of-charge (Microsoft did it!)
Palm: - (Mastered Judo Rules)
•Avoided head to head battles with Microsoft
•But was there any competitive advantage?

11. Strategic Intent
"an ambitious and compelling ... dream that
energizes ... that provides the emotional and
intellectual energy for the journey ... to the
future.”

12. Concept
Strategic Intent Judo Strategy
Ambitions Stretch targets Stay under radar
Competitive Build Ignore
Advantages
Sustainability Stable over time Short Span
Resources Misfit High degree of fit
Analogy Video Picture

13. Strategic Intent = Competitive Advantage
+ Competitive Innovation
Competitive Advantage Competitive Innovation
Build
Create sense of urgency advantage
Competitor focus on every level
Train employees in needed skills Change Competitiv
terms of Exploit
engagemen e loose bricks
t Innovation
Launch initiatives progressively
Establish clear milestones
Compete
Strategic Intent through
collaboratio
Gary Hamel; C.K. Pralahad. n
Harvard Business Review, 1989
3/26/2010 IIPM - AHMEDABAD 13

14. Case Study- ebay
•The business mission was to create online market place
•Earned $3.3 billion in 10th year operations-Microsoft,
Dell and Cisco Systems could not do it!
(currently, it’s $7.7 billion!)
Yahoo! Amazon.com ebay
Market Cap. $37.1 billion $30.27 billion $41.66 billion
Revenues $6.9 billion $14.8 $7.6 billon
P/E ratio 59.15 64.66 123.99
3/26/2010 IIPM - AHMEDABAD 14

15. E bay: Competitor Analysis
Yahoo
Ebay
Amazon
Market Cap.
Company 04/16/08
Yahoo 37.67B
Ebay 41.94B
Amazon 30.22B
3/26/2010 IIPM - AHMEDABAD 15

16. ebay: Judo Strategy
•Ebay used Judo techniques throughout the journey: -
• Select Niche (online auction); don’t take bigger
competitors head-on (e-mail): (Movement)
• Alliance with AOL: Grip the bigger competitor
(Balance)
• Use opponent's strength against it: capture auction
market share on AOL network! (Leverage)
• Avoid tit-for-tat: No response to “free access”
strategy by Yahoo!, Amazon.com
3/26/2010 IIPM - AHMEDABAD 16

17. ebay: Strategic Intent
• Establish Sense of urgency: -
• Leverage networks; move towards striking ambitious
deals (AOL)
• Competitive Focus:
• Establish SWAT teams; weekly reporting
• Launch Initiatives: -
• Buy PayPal (adding to business proposition)
• Establishing clear milestones: -
• Objectives in terms of users, creation of communities
3/26/2010 IIPM - AHMEDABAD 17

18. Conclusion
Strategic Intent
You Competitive
Imitation
Create Urgency
Competitor
Focus Competitor Success..!!
Train Employees
Launch Competitive Judo
Progressively Innovation Strategy
Establish
Milestones
3/26/2010 IIPM - AHMEDABAD 18