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The strategy behind economic terms

By Leah Speser posted 01-30-2014 11:38

  

With each chapter, Sun Tzu is moving us from pure perspective of theory to the gritty world of tactics. Today’s post begins a new chapter in which the Great General shares his insights on the role of Statagem. Our commentators are stimulated to discuss how one arrives at the economic terms which drive deal making and thus business development. After all, if you want to make money, it helps to be clever as well as lucky.

 

Comments on Sun Tzu’s The Art of War, edited by Dick Cooledge, Comptche Press, 1927.

 

Sun Tzu: “If one is being practical, the best thing is to win without fighting. It is better to take the enemy’s country intact rather than shattered and laid waste. So too it is better to take the opposing force intact than to destroy it. Fighting and conquering does not constitute excellence in a general. Excellence is found where a general can win without fighting.

Raven: “Rather than ask what you want, ask what the other fellow needs. If you are better off by giving it to him, why not do that?”  

Poor Richard: “When he prices his inventory, the prudent merchant calculates his bottom line. That defines his low end. Then he thinks about how the customer likely calculates their bottom line and tries to calculate theirs. If the customer’s is greater or equal to his, he then estimates how high the customer can go and still be better off. That defines the high end. If you want to do lots of deals as quickly as possible, define the range, get into it, ask for the high side and settle for any offer that is still in it. Always ask for the high end first. Never settle below the low end.”

© Phyl Speser, January 30, 2013

 

 

Comments on Sun Tzu’s The Art of War, edited by Dick Cooledge, Comptche Press, 1927.

 

Sun Tzu: “By this simple principle, we can rank strategies. It is best to foil the enemy’s plans and dishearten them before they have momentum. Next best strategy is to disrupt the enemy from marshalling their forces. The third best strategy is to engage the enemy where you can maneuver to your for advantage. The worst strategy is to attack where the enemy is entrenched and strong,

Raven: “When you walk in a restaurant, if you know what you want and think you can get it, you can ask for it. If you know what you want and don’t think you can get it, you can settle for whatever on the menu that you like. If there is nothing on the menu that you like, you can still ask the waiter for a recommendation.  The problem is you may not like the recommendation. So before you ask, it is useful to know what you order if the recommendation doesn’t sound tasty.”  

Poor Richard: “First figure the cash flow requirements, then you can figure out the terms that allow you to get it. Once you have terms that let you get the cash flow, you figure out the terms that can keep you from losing it. Once you have those, you can think about the enforcement mechanisms. It’s always better if they have to sue you rather than you them if things do not work out. The plaintiff carries the burden of proof as well and still has to collect even if they win. If someone is going to get discouraged and quit because it is a hassle, better it’s them.

© Phyl Speser, January 31, 2013

 

 

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