Playing Risk.

One of the great metaphors to explain marketing tactics is the game Risk – the game of global domination. Building a company in an emerging market is a bit like Risk, except you don’t have the board in front of you. As such, the companies that are often the most successful are those that quickly develop methodologies that enable them to effectively balance strategies of focused attack, with measured exploration.

According to our friends at Wikipedia, Risk is:

…a turn-based game for two to six players, and is played on a board depicting a stylized Napoleonic-era political map of the Earth, divided into forty-two territories, which are grouped into six continents. Players control armies, with which they attempt to capture territories from other players. The goal of the game is to control all the territories—or “conquer the world”—through the elimination of the other players. Using area movement, Risk ignores realistic limitations, such as the vast size of the world, and the logistics of long campaigns.

Marketers often use Risk to explain the importance of focus, citing that the classic losing strategy in Risk is too spread your forces too thin. Players that spread their forces too thin never ‘win’ anything. Over time those areas where they have some presence end up getting picked off bit by bit by opponents that pour focus into winning their specific position. Sounds pretty easy, right? Focus on a specific area, win it decisively, then leverage that position to win new areas. Well, it is a bit trickier when you are trying to develop a position in a new market. Why? Because you do not have a map!

In Risk, the foundational assumption is that every player has perfect information. They know what the geography of the battleground looks like, they know where their opponents are located, and they can even see how large their forces are in specific areas. This type of information is available in established markets. For example, it is possible for a marketer to quickly understand that in the carbonated beverage market, Coke has X market share, Pepsi has Y and so on. In new markets, where the business models are evolving and new technologies are changing categories, this gets a bit trickier because these things are undefined.

In other words, attacking a new market is like playing Risk without a map. Each player is dropped off in a different location with a small army and limited provisions. Thus they know their particular area, but do not start with knowledge of the entire terrain. That makes things tricky. Are you on an island? Are you on a massive continent? Are you at the highest point, or are there more advantageous positions nearby? You simply don’t know. This changes the game considerably. You not only have to use your army to fight and win new territories, but you also have to use them to QUICKLY understand the battlefield so that you can more effectively play against your opponents.

The good news is that when there are scenarios of competition where their is imperfect information, there is a huge amount of opportunity. If you can figure out the real ‘map’ before anyone else AND execute with focus given that information – you win. This is how small companies beat larger companies – they get the map first and attack a key beachhead hard. So if you are starting a company, make sure that you iteratively develop methodologies that enable you to continue making focused progress while undertaking measured exploration. Make sure that from the get-go you set up a process for measurement and experimentation so you can quickly chart the course.

On the web, this is a must as the landscape is not only uncharted, but often subject to change. Enough pontification for one day. Happy Saturday!

hoomanradfar Written by:

  • Chris Malin

    I just had the opportunity to read this post.

    Your message of focus is an important one that, all too often, gets lost in companies of any size and in markets of any maturity. Focus is a critical strategic discipline that must continually be cultivated by management.
    Your analogy to the Risk map makes valuable points, but it appears to assume a fixed “map.” Such an assumption overlooks the power (and perhaps responsibility) that management (and marketers) have to change the map to one that best suits their firm.

    The first example that comes to mind is the move by Miller beer from competition based on regional and taste loyalties to something new by promoting Miller Lite. The positioning changed preferences in the American beer consumer, shifting the map. If memory serves, it took 7 years for Anheuser to respond with Bud Light and another 5 for Bud Light to fully surrender the ex-jock, guy-in-the-woods position of Miller Lite. Instead Anheuser shifted the category with Spuds MacKenzie. “Diet” beer was now about parties and girls. The “map” had been changed.

    What’s interesting in this example is that the target customer didn’t change. That’s where focus comes in. In each case, the company needed to make a decision about those customers’ tastes and preferences would be by the time of product launch and how they could best influence and satisfy them on variables where each firm could dominate.

    When we launched Mac OS X at Apple, we similarly faced a need to change the map as we competed for developer time, attention, and commitment. With responsibility for developer-facing marketing of the OS, my team had to rebuild brand equity, re-create and re-inspire a developer community, and lay the groundwork for a critical consumer launch. In that case, we had to change the map along multiple fronts, including the way in which we defined development opportunities and rewards.

    In my experience, a danger of assuming a fixed map is that the assumption can leave companies in emerging markets wasting time looking for competitors to position against and can leave companies in mature markets locked in internal competition among divisions.

    Apologies for the long comment, but the ways firms use marketing to build this kind of power and success is a subject that interests me. Let me know if you would like to continue the dialog offline.

  • http://www.clearspring.com Hooman Radfar

    I love this statement:

    /*In my experience, a danger of assuming a fixed map is that the assumption can leave companies in emerging markets wasting time looking for competitors to position against and can leave companies in mature markets locked in internal competition among divisions. */

    Would love to continue the discussion anytime. You can ping me at firstname AT mycompany DOT youknowwhattoputhere. 🙂