To make it more interesting and applicable, we related the presentation to The Art of War (孫子兵法) authored by ancient strategist in China called Sun Tzu (孫子).  Here are a few quotes taken from the book of wisdom in warfare to apply to the business world.

未戰而廟算勝者，得算多也

Translation – The general who wins a battle makes many calculations in his temple ere the battle is fought.

Explanation – Those companies and individuals who win in the business world make much calculation, planning and deliberations on their strategy and plans.  Those who plan less have lower chance of success, much less those who don’t plan anything at all!

知彼知己，勝乃不殆

Translation – If you know the enemy and know yourself, your victory will not stand in doubt.

Explanation – Success comes first from knowing our own business well, including its strengths and weaknesses, as well as those of the competitors.  Understanding this does not guarantee success, but it gives us foreknowledge into our chance of success.

知天知地，勝乃可全

Translation – If you know Heaven and know Earth, you may make your victory complete.

Explanation – Knowing our self and the competitors is not enough.  The environments in terms of opportunities and threats need to be understood too.  We can be good, but if the timing is not right, our effort will be in vain.

戰勢不過奇正，奇正之變，不可勝窮也

Translation – In battle, there are not more than two methods of attack – the direct and the indirect; yet these two in combination give rise to an endless series of maneuvers.

Explanation – There are only two kinds of attack, namely normal and ordinary one (direct) and the unusual and extraordinary one (indirect).  But the combination of both opens door to endless permutations of strategies we can take.

兵貴勝，不貴久

Translation – In war, then, let your great object be victory, not lengthy campaigns.

Explanation – There is no use to analyze and over-analyze the situation until we get into analysis paralysis.  We must act with our gut and intuition, despite incomplete information, after reasonable amount of analysis has be done.  The objective of a business war is in the victory, not prolonging the process.

Do you see how The Art of War may apply to your business or life situation too?

1. Web developers do not deliver a good job (I have tell you n times about everything you need to know, including inserting auto-play background music. I have also given you guys a benchmark website which I want – I want it to be similiar or better than Dell’s online ordering website. I have budget, yes I have!)

2. My site ranking is poor, something is wrong (Why other websites are listed on the the first page of Google but not mine. I should engage my friend who is a SEO expert working in eOneShreak)

3. Isn’t my website should be fully automated (What I want to say is, web developer should create an auto-pilot website or money making machine version 2.0. I just need to sit there waiting for money to come in)

4. Keep my online business ideas confidential (My ideas is first in the universe. I have discussed this plan with God and both of us agreed that this will hit and overtake Facebook. You are lucky to be involved in project like this)

5. The site is not what I want… (Isn’t that you know everything about website? You should propose something fresh, innovative, better, faster….)

Web developer says:

1. Well, we are afraid that this is what we can do with your limited budget (Even given the same budget as what Dell has invested, you are only a copycat and your business will fail because a website is not an online business. You need to have strategy to make it work and remarkable)

2. There is no overnight trick to make your page to first in Google (Idiot, do you know what is PR? Not Public Relations but Page Rank)

3. We have done all the integration right (If we are able to come out with such thing, we would not be here doing the website for you. You know, you don’t even buy anything online before and you expect your online business to be built and money piling up in your Paypal account. Again, do you have Paypal?)

4. Sure! We will keep this ideas to no one including my cat. My fish do not talk but I won’t tell them too (This is the n times of people mentioning this ideas. To make you happy and to make sure we get the project, we will agree that you have done all the search in Google and happily confirmed that you find no similar website or ideas)

5. Let’s us try again and we hope it is closer to what you want this time (We have another final payment to collect so we will have to bear with you a wee longer. We do not understand what do you mean by better, give us clear guideline)

To complete the 4000-word essay (I managed to write 2800 words only), I thought of 10 points and expanded from there. I published in Facebook before and have drawn many comments.

Here are the 10 points for sharing to all.  Welcome to comment and criticize. I’d like to discuss and learn from your viewpoints.

Introduction

The question “Is globalization good or bad for Malaysia?” is not relevant any more. Globalization will happen and is happening to all countries including Malaysia, no matter it’s good or bad.

Quoting an unusual example – The late Qing dynasty in China in late 19th century and early 20th century. They locked the country out from the rest of the world. Unlike the Meiji Restoration that propelled their neighbour Japan into a world power in just a few decades, the Qing dynasty eventually fell in 1911.  Refuse to follow the world trend? It’s either downfall or extinction.

The 10 Points

#1 Malaysian businesses need the global market. The local market is just too small. It’s a matter of survival in the globalized 21st century. Don’t be content with just being a jaguh kampung (champion in home country).

#2 Malaysia needs to specialize. Want to get out of the middle income trap? Do something new, something different. Don’t insist on attracting FDI in labor-intensive businesses. Move up the value chain.

#3 We have been trying to “prepare” for globalization for too long time, even decades. It’s true some of us, some industries, some businesses are not ready. But when will we be ready? Perhaps when we are truly ready, we are irrelevant in the world economy any more.

#4 Globalization raises our competitiveness. Being a frog in a well (Malay proverb: katak dalam tempurung) does not improve our competitiveness. In business, it’s only when we face the real challenges that we grow. Just open up and the competition will hasten up our readiness.

#5 Globalization raises our human capital. Yes, brain drain is a real problem. But don’t dwell on it too long. How about using these “drained brain” in overseas for our advantage instead? How about getting foreign talents into our country instead? Who say Malaysia can’t attract talents? Learn from Mind Valley, the Google workplace of Malaysia.

#6 When we close ourselves out, people will not admire us. When we become an open book and have transparency, investors will come. A 81% drop in FDI is a wake-up call, much too late. Learn the lesson and open up.

#7 Communities in Malaysia have been sharing the same country, yet living segregated. But our diversity should be a great blessing to foray into the largest markets in world. Globalized Malaysian businesses with true partnership among different races and spirit of 1Malaysia can help national unity.

#8 We are living in an integrating, interdependent world economy. We need to keep up this reality. Want to close our market? Check the fate of Qing dynasty.

#9 We are good in many areas. We have leadership in many markets, such as Islamic finance and palm oil. Why can’t we excel in other areas as well? Malaysia Boleh (Malaysia can)? Don’t be defeatist. Think boleh and we boleh!

#10 I never advocate opening up 100% completely without reservation. There are limits. But we need to embrace globalization and even be an advocate in it. Globalization will change us, for the better.

What do you think of globalization? Is it good or bad for Malaysia? Welcome to voice your opinions.

Yes, I have been joining some of these groups. Also learning about this new way of making money – building recommender community groups on Facebook.

Correct me if I’m wrong. But it works like this:

1. Decide on your passion, such as table-tennis or reading books.
2. Create a Facebook group around your passion, such as “Malaysia Table-Tennis Network”. Decide on what you can offer your group members.
3. Invite your friends on and off Facebook to join your group. Aim for the number.
4. Keep posting useful messages to group members to build your credibility, and make sure they get something beneficial out of joining your group!
5. Once you have reached a critical mass, such as 1000 members in your group, start leveraging the number to make money!

For example, you can contact sport organizations and companies to sponsor events, contests and prizes for your table-tennis sport group. You can help these sponsors sell their products. In return, you may get a cut of the profit.

Another example I’ve witnessed a book love group are doing. They leverage on their high number of members to negotiate with MPH to gain discount for their members.

I don’t know exactly yet how to translate number of members into profits, since I’m not there yet. But since you are leading your many group members now, you have the influence over the group members and “recommendation power” to talk to businesses interested in your group as their target customers.

And once you have achieved success with one niche group, start another group (better be related, I supposed), and leverage on the first group to promote the second!

Just announce to the first group that you have created a second group, then many of them will join you since they already trust you!

Does this business model work? I don’t know. But according to one Internet guru, building recommender community groups is one of the most profitable ventures on the Internet.

And what do you think?

I heard some say that market share, or “mind share”, is first and foremost important.  When many people have got to know a dotcom brand, they will visit the web site,  the “eyeballs” will be so increased, the “critical mass” will be so achieved, the “branding” will be so built up, and naturally the profit will come.

On the other hand, others think that profit should be the first to focus on, not market share.  A business can grow its market share so much that it is still not profitable.  It can command a large market share yet sacrifice the profits that could have been earned during the growth.

One typical example is a membership business online.  Shall we first focus on market share by giving out free member accounts in order to first attract the mass, and then try to sell some premium services later to them?  Or shall we start with a chargeable membership so that we can starting earning right from the first day?

Perhaps profit should be our first objective.  And as we do things the right way towards the objective, market share is a natural result.  What do you think?

The problem is, we just can’t ignore competing in the red ocean, whether now or in future.  Perhaps our industry is still red.  Perhaps a blue ocean will also turn red after some time.  Competitive strategies still have an important place in business and marketing.

I heard that a telecommunication company in Malaysia has two teams of people planning their business strategy, one called “Compete Today”, another called “Compete Tomorrow”.

As the names suggest, the “Compete Today” team plan strategies to outsmart their competitors in today’s market.  Whereas the “Compete Tomorrow” team brainstorm and explore new markets and plan strategies for the future.

So I’m learning not to just look up to anything “blue ocean” as good and look down on anything “red ocean” as bad.  A more holistic perspective is required.

Some time ago I received an email from a Singaporean who just took a course in BOS at UCSI Blue Ocean Strategy Regional Centre, and commended how good the training had been.  I soon surfed to their web site and found it interesting.  But I didn’t notice their building was quietly being constructed right near my house until I passed by recently!

It is good news that more and more businesses are becoming aware of the dangers competing in red ocean, and the importance of creating their own market (blue ocean) by making the competitors irrelevant.  Easier said than done.  But it is achievable.  And there have been many success stories, both locally and abroad.

It is good for the businesses as they can transform their businesses and earn like never before.  They will no longer need to rely on competitive tactics, and even unethical ones, to outsmart one another.  It is good for the market as businesses truly listen and study what it needs, and even discover what it really needs.  It is good for the society as our lives can be improved through creativity and innovation in blue ocean strategy.

But what happens when everyone is doing BOS?  Not every BOS will be good BOS strategy.  Some can be BS strategy.  It will be interesting to see what happens in future when “blue ocean strategy” is as commonly understood and practiced as “differentiation”, “segmentation” and “branding”.

Are you not on the BOS bandwagon yet?

I turned on the radio and tuned to FM 89.9 immediately.  I was so delighted to have found such a channel that I have long yearned for

I’ve been the type of person who don’t listen to music while driving.   No, I was not like this when I was younger.  I spoilt my car audio speaker before for playing rock music too loudly in early years of driving.  It is also not that I don’t like music.  If you go karaoke singing with me, most likely I’ll sing more than you.  But as I grew older, I just became the kind of person who would not turn on car radio for music any more.

But apart from its normal programmes, BFM is music most of the time!  In order not to miss any good business programmes, now I keep the radio on while driving and listen to music after so many years!

The moral of this story is that, BFM turned me from a non-customer into a customer.  Just as Nintendo successfully turned non-customers such as adults to its Nintendo Wii video game console, BFM just successfully turned me into listening to music!

Instead of taking away existing customers from competitors in the market, this is defining a new market boundary by appealing to non-customers and turning them into customers.  A blue ocean strategy!

Thanks to Exabytes who treated business partners, suppliers and customers to watch Madagascar: Escape 2 Africa in Cathay Cineplex, free of charge!

As we could see, the cinema hall was packed with people.  As we walked around the cineplex and The Curve shopping mall nearby, many people were carrying the free bags given by Exabytes.

From a humble beginning of a few staff members just a few years ago, Exabytes have grown into the most successful, interesting, admirable, enviable and happening hosting provider in Malaysia!

Not to mention many awards they have  won over the years, including the prestigious Golden Bull Award given to the best SMEs in Malaysia, not one time, but two years in a row – last year and this year again!

Years ago I already thought of using their services, but was bogged down by my hesitation to switch provider.  I also considered their lack of their own data centre, and lack of 24-hour phone support as their down sides when compared to another I was using.

But as their boss Chan told me, even if they had the money for a data centre, why use it for a data centre while it could be used for other better purposes?

We know the web hosting industry in Malaysia is a typical red ocean.  But Exabytes seem to have adopted the four action framework (Eliminate, Reduce, Raise, Create) in the blue ocean strategy, among other things they have done.

Unlike some other providers, they eliminated the need for their own data centre.  They reduced their phone support to the minimum.  These two alone are very costly yet not very productive for a hosting provider.

But they raised the quality, variety and innovation of their products by catering to the niche markets such as students, bloggers and resellers.  And most importantly, (to the customers ) they created the FUN in hosting with them with their regular freebies, prizes, giveaways, PR events such as this movie day.  Hosting service is very much a functional product, but Exabytes are not just providing the functionality, but appealing to our emotions as well.  I believe they are also among the most interesting companies to work in!

The thrust of a blue ocean strategy lies in the value innovation, the innovation of values offered to customers yet at a lower cost.  They save much money and do away many headaches by eliminating and reducing unproductive things, but use it to raise and create something very interesting and impactful.  Money well spent!

So Exabytes, congratulations on your success.  I believe you will not sit on your laurels, but grow from strength to strength to become not just a good company but a great one!  Syabas!

These fireflies are little insects which emit light on their abdomen.  They emit light for mating purpose.  But I read that one type of female fireflies use the light to attract male fireflies to them and eat them up!

I was there in Kuala Selangor in 2004, now again in 2008.  There were not many fireflies four years ago.  But to my surprise, there are even less now!  What happened?  I don’t know.  Four years ago I saw people catching them while watching.  Or maybe that place is no longer an ideal habitat for the fireflies.

While waiting on the jetty, I could see a photo showing hundreds of fireflies beaming their light.  I don’t know when the photo was taken, and for how long exposure time it was taken.  But I’m sure people would have an expectation of watching so many fireflies by the river.

Unfortunately, this was not the case.  If you want to see how satisfied the customers are after visiting a place, look at their faces when they come out.  Do you see a lot of smiles?  Do you think they will go out telling their friends to come?  Sorry to say but watching fireflies is a one-time business only.

What will happen if the day comes there is no more firefly in Kuala Selangor?  Less tourists will go there.  There is even a firefly resort built near the jetty to accomodate tourists coming for fireflies.  Do they have to close shop then?

Well, hopefully they could do something to preserve the fireflies.  Otherwise Kuala Selangor will no longer be on the tourists’ map for fireflies.  But if the “extinction” is expected sooner or later, then perhaps it’s time to change business model not to depend so much on fireflies any more.

Sometimes, we may need to proactively “disrupt” our business first, before it is disrupted by others.

The competition is so intense.  To win the price war, you have to do work for clients at dirt cheap rates.  Profit margin is very thin, if there is any.  How are you going to pay for designers, or even your own time?

Well, this is the general sentiment.  As a web designer, do you not feel this way?  But I choose to be a bit more optimistic.  Here are my humble opinions.

Internet is here to stay in years to come.  More and more businesses are going to use it as their business platform, or as a channel to reach out to their customers and stakeholders.  There is a market need for web designers.

The business environment is also changing.  So are web technologies.  Businesses need to continually update and upgrade their Internet infrastructure to suit their current business needs with the latest suitable technologies.  There is a continuous need for web designers.

The web design market is crowded with many web designers who know or care only design or programming.  Unfortunately they miss out other aspects of having a web site, such as business strategy, Internet business model and Internet marketing.  Now if you can provide these, will you not stand out?

Again, many web designers are just designers and do not know marketing.  They think once they put up a web site on the Internet, traffic, enquiries, orders and money will pour in.  But it does not work that way.  No wonder many clients complain there is no use having a web site.  Can you include Internet marketing to offer a more comprehensive service to clients?

The prices are so low that many web designers can’t really give focus and their hearts on any individual project.  Why work so hard if all you can earn is RM500?  So go for the volume!  They just take instruction and do not think and strategize proactively for clients.  They just finish the project and go on to the next project.  But you can be different.

Many clients expect low prices for their web sites.  Perhaps they have been pampered by low price offers from competing web designers.  Perhaps they do not know the cost structure behind.  You are competing in cut-throat price war in a typical red ocean.  Now if you can educate, influence and change the market perception, will you not be a pioneer?

Many clients do not know the potential of the Internet.  They do not know they can use their web site to achieve much more than they can imagine.  Now if you can be their consultant to educate, influence and change their perception, will you not be a winner?

The heartening fact is that there are many companies who can afford to pay high prices (five-figure or even more) if they can see the value in your proposal.  Instead of competing with others in price, why don’t you equip yourself with more skills so that you can offer more value to them?  It may be a better strategy to charge high and command authority, rather than to charge low and be cheap.

The traditional business model of a web design firm may not work any more, at least it is not so profitable and sustainable.  Can you think of a new business model for your web design business so that you can create a new blue ocean?  In fact, I suggest you quit web design market and transform your business into something else that includes web design service.

I may not be right but these are my honest observations.  I am not against web designers but I am pro-consumers.  They are the ones who pay us money.  I just hope web designers can do a much better job in serving them.

What do you think of the web design market?  Your comments are welcome.  To stay tuned with my other thoughts, do subscribe to my blog to be updated from time to time.

“How to get more free search engine traffic?”, asks the search engine optimization expert.

“Is it the right business model?”, asks the Internet consultant.

These three questions reflect the three levels of Internet strategy when we decide on using the Internet to help our business. The three levels are technical, marketing and business levels.

The technical level concerns of domain name, hosting, web development, user interface design, programming, content, graphic design and e-commerce. The objective is to develop an attractive, user-friendly, informative and useful web site for the target visitors.

The marketing level concerns of online branding, keyword research, search engine optimization and positioning (SEO or SEOP), social media marketing, PPC advertising, email marketing, viral marketing, blog marketing, Internet marketing and others. The objective is to reach out to and attract web site traffic from the target visitors.

The business level concerns of aligning the Internet strategy to the business strategy of the organization (not the other way round!). It questions how the Internet can help in achieving the organizational goals and decides on the right business model. In many cases, the Internet can be used to gain competitive advantages. It can also be an enabler to transform the business strategy and even create a blue ocean of uncontested market space!

The business level defines the business model on the Internet. The marketing level creates the demand. The technical level forms the customer experience. They are not mutually exclusive, but are complimentary to one another.

But planning should flow top-down from the business level to the marketing level to the technical level. A company’s Internet strategy should be approached first from a business point of view, not from a technical point of view.

How are your web site doing now? Are you taking care of all these levels above?

However, as I browse through the web sites of law schools on the Internet, such as that of ATC (Advance Tertiary College), I don’t quite find what I want, unless I don’t mind taking a single subject in courses like ICSA. These law schools cater for those who want to be lawyers, but not working people who want to learn more about law like me.

According to an insider, the higher education industry in Malaysia is very competitive. Not many private colleges are making money. In fact, many are struggling and are on the verge of closing down. There are thousands of colleges, institutions and training centers registered with the two government ministries in Malaysia. But how large is our population?

The colleges need to seek a way out, not to fight head to head with other colleges, but to seek their own way. I guess they need their own blue ocean strategy.

One example is not to see what other colleges offer and follow suit. That is, not to benchmark others. But they are to look beyond their traditional customers and find out what non-customers want.

Take my case as example. Law schools like ATC could look beyond their traditional market boundary consisting of those who want to take up law as their career. Perhaps they could offer law courses to those currently not their customers who are interested in gaining some knowledge in law, and catering for what they need.

Colleges could design new courses in response to what the market wants. They could win by devising and executing a blue ocean strategy. But sometimes you need a paradigm shift to look beyond what is being done now…

How about you? Are you able to find the course that you would like to take?

The blue ocean strategy is not only applicable to businesses, but in other contexts as well, though we can’t apply everything directly in those settings. In particular, the four actions framework is useful in planning our own personal life.

Whether we like it or not, everyone of us is a Me Inc., and we are the CEO of our own life. We do have a mission to complete on this earth in this life. And to achieve this, we have been bestowed with resources such as time and money.

The four actions framework can be used to differentiate ourselves (or our business) from others yet at a lower cost. It asks four main questions – what to Eliminate, what to Reduce, what to Raise and what to Create (ERRC)? Let’s take an example how I might want to plan my expenses:

Eliminate – In recent years, I have developed a habit of eating out in expensive restaurants with others, that now I patronize these places even when eating alone! I don’t have to spend so much when eating by myself. I need to cut this expense completely!

Reduce – I need to reduce buying seemingly useful but actually unnecessary items such as books and magazines. I don’t have so much time to read all of them!

Raise – I should spend more on high-leverage expenses which give good returns in long term. For example, taking classes to educate myself in business, finance and technology can go a long way toward success in life.

Create – I may want to consider some investment instruments such as shares, which as a risk-averse person I never tried. Of course, getting educated first in these is essential to avoid losses.

I find it helpful to that many things in business and life can be applied through this ERRC model. Is there anything you want to get ERRC’d too?

While I should not divulge much details on their strategies, suffice to say that they are both market leaders in their own market space. They have strategies in place to create new markets and make their competitors irrelevant.

What I like about them is that they painstakingly and devotedly shared their knowledge and experience in strategizing for the benefits of the business community. Hopefully more and more Malaysian companies will discover our own blue ocean strategy and bring our country to new heights!

I heard they are not paid for their speeches. However, it is still good PR and CSR service for their companies as they educated us on the technical aspects of their products – mineral water of Spritzer and cord blood stem cells of StemLife. I have learned something new

Here are a few lessons that impact me most:

• Value innovation – Offering innovative values to customers yet at a lower cost.
• Strategy canvas – A visual tool to assess the state of a firm and reorient it against competitors.
• Four actions framework – Deciding what to eliminate, reduce, raise and create.
• Attracting non-customers – Redefining the market by looking beyond existing customers to non-customers.

Here are two incoming events conducted by Lifelong Learning initiative by MCA (I’m not affiliated to MCA):

1. Talk on blue ocean strategy on 24th April
2. Reading session on blue ocean strategy and the success stories of Malaysian enterprises on 26th April

Would you like to join me?  Please contact me here.