Move Your Men, but Not into Enemy Forces

The great competitive moves are not confrontations that result in expensive battles, but manuevers that go around the competition. One good example is the recent release of Nintendo's WII game console. While Xbox 360 and Playstation 3 go after the same customer, Nintendo is pioneering new niches such as the older people who don't normally play games. This is great example of a non-intuitive move using Sun Tzu's principle of reversal. Video games are for young people? Okay, sell to old people! As an investor, I never invest in companies that are entrenched in competitive battles. I just did training for Nokia in Asia and I think it is a wonderful company, much, much smarter than the average, but they are facing battles from a dozen different fronts in the cell phone market. I would love to invest in them because I think they will win, but all battles are expensive and their returns just cannot be as profitable as those in other markets. For example, after returning from Asia, I have bought stock in both Toyota (which I have owned for awhile) and Honda. Most of Asia is buying cars and motorcycles like crazy. The cars are 80% Toyotas and the motorcycles are 80% Hondas. I have owned Toyota because I saw their growing dominance in the US (I own a Lexus) and in Europe (where they just became number one), but both the US and Europe are battlegrounds (though competitors in US are weak). In Asia, there really isn't any battle. Asia is where the growth is for the next twenty years and where the bulk of humanity lives. For me, this is a no-brainer.