TOCICO 2012 Conference
Achiles’ Heel: Identifying and
Leveraging a Competitor’s
Weakest Point
Presented By: Dr. Eldad Kollenscher and Prof. Boaz Ronen
Tel Aviv University
Faculty of Management
Leon Recanati Graduate School of Business Administration
Date: June 2012
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The Tacoma Narrows Bridge, 1940
TOCICO 2012 Conference
• Bridge collapsed after 4 months
• Resonance effect
• http://www.youtube.com/watch?v=jzczJXSxnw
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Achilles’ Heel
TOCICO 2012 Conference
• Thetis, anxious to make him immortal, dipped her son
Achilles in the River Styx
• She held him by his heel which remained dry and
became his vulnerable spot
• Trojan prince Paris shot an arrow into Achilles‘ heel
and killed him
Even the most powerful opponent has
vulnerabilities
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TOC: Managing Our Constraints
TOCICO 2012 Conference
70 /m
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TOC : Focus on Bottleneck to
increase Throughput
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1
*
50/m
100/m
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The Focusing Steps
TOCICO 2012 Conference
1. Identify the system’s constraint
2. Decide how to exploit the system’s constraints
3. Subordinate the system to the above decision
4. Elevate the system’s constraint
5. If a constraint was “broken”, go back to step 1. Do not let
inertia become the system’s constraint
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TOC Strengthens the Constraint.
But What About the Adversary?
TOCICO 2012 Conference
70 /m
3
2
1
*
50/m
100/m
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The Need for a New Attack Strategy
TOCICO 2012 Conference
• Military experience is the root of Attack Business Strategy
• Current business strategies are still based on Clausewitz’
attrition warfare
• Competitive-Business-Strategy focuses on product/market,
ignoring the competitor’s internal vulnerabilities
• The result: lose-lose attrition battles based on product/market
• For example, Porter’s 4 generic strategies
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Achilles’ Heel for Law Enforcement
Agencies
TOCICO 2012 Conference
The use of Achilles’ Heel methodology for:
– Car theft
– Money laundering
– Drug trafficking
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The Roots of Achilles’ Heel Methodology
TOCICO 2012 Conference
1. Military Operational Theory
–
Developed in the USSR by Marshal Tukhachevsky and his colleagues
in the 1920’s
–
focuses on attacking the enemy's weak points
–
a strike at the enemy’s rear will create a shock, disrupting its
operational ability and driving the enemy off-balance
2. The Theory of Constraints
–
The Focusing Steps and their underlying tools
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Definitions
TOCICO 2012 Conference
• Achilles’ hill: The organization’s weakest point. Once hurt, will
cause severe damage.
• Paris’ arrow: a competitive move that attacks the opponent's
weak point effectively.
* The use of this methodology should follow law and
ethics rules
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Achilles’ Heel Strategy:
the Last Resort
TOCICO 2012 Conference
• A win-win solution
• Market segmentation and product differentiation
• Viable Vision solution
• Blue Ocean strategy
•
•
If everything else fails, consider attacking the adversary
using the Achilles’ heel strategy
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Should We Attack the Adversary?
TOCICO 2012 Conference
• Risk assessment: think of the “day after”
• Cost/benefit analysis
• Timing is everything
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Achilles’ Heel Methodology
TOCICO 2012 Conference
1. Identify the adversary's Achilles’ heel, then generate Paris‘
arrow by:
2. Overload and confuse the adversary's Achilles’ heel
3. Isolate and starve the adversary's Achilles’ heel
4. Attack and neutralize the adversary's Achilles’ heel
5. Return to step 1 if the adversary's Achilles’ heel has moved
elsewhere – avoid inertia
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Step 1
TOCICO 2012 Conference
Identify the adversary's Achilles’ heel
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Identify: Classification of Achilles’ Heel
TOCICO 2012 Conference
• Customers (sole customer)
• The supply chain (sole supplier)
• Internal resources:
– Value chain (critical stages)
– Policy constraints (silos, performance measures, pricing)
– Physical Resources (bottlenecks, talents, human resources)
– Processes/Structure (bureaucracy)
– Reputation and culture
• The distribution chain (long chain, sole distributor)
• Management and board of directors
• Business associates
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• Regulators (regulations, protectionism)
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Identify: Identification Tools
TOCICO 2012 Conference
• The Arena model
• Focused CRT
• KPI analysis
• Bottleneck analysis
• Flowchart
• SWOT analysis
• Inter Stakeholder Analysis (ISA)
• Financial statement analysis
• And, above all, Common
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Sense…
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Step 2
TOCICO 2012 Conference
Overload-and-confuse the adversary's Achilles’ heel
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Overload-and-Confuse
TOCICO 2012 Conference
• TOC: Increase the constraint’s throughput
• Achilles’ heel: drive the adversary to ineffectively manage its
Achilles’ heel.
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Overload and Confuse: iPhone Case
TOCICO 2012 Conference
Overloading the adversaries’ distribution channels
• Apple's iPhone was sought after by mobile phone operators
• Outside the US Apple did not provide exclusivity to any
operator and included a clause committing them to the
distribution of large quantities of iPhones over a period of
three years
• As a result Apple increased its market share on the expense
of competitors such as Motorola, Sony-Ericsson and
Samsung
• Achilles’ heel: limited distribution capacity
• Paris’ arrow: choke the distribution channels
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Step 3
TOCICO 2012 Conference
Isolate-and-starve the adversary's Achilles’ heel
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Isolate-and-Starve
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TOC: Subordination to the constraint
Achilles’ heel: Preventing the adversary from diverting
resources to assist its Achilles’ heel
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Isolate-and-Starve: The End of Life
Component
TOCICO 2012 Conference
• A US government agency published a tender for a complex Hightech system
• One player recognized that a component that was required in the
contract was declared as "end-of-life“
• The player bought the manufacturer’s whole stock of
components thus preventing its larger competitors from bidding
• Achilles’ heel: the obsolete component
• Paris‘ arrow: buying the whole stock
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Step 4
TOCICO 2012 Conference
Attack-and-neutralize the adversary's Achilles’ heel
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Attack-and-Neutralize
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TOC: Elevate the constraint
Achilles’ heel: Decrease the capacity of the weakest point
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Attack-and-Neutralize: Logica/CMG
TOCICO 2012 Conference
• VAS (SMS, voicemail, etc.) developer Logica merged with
CMG
• For a small competitor the kneejerk reaction was to treat this
merger as a threat
• The underdog took advantage of the decision making chaos
(due to the merger) in the new company and aggressively
provided bid offers to Logica-CMG customers
• 50% decline in Logica-CMG's valuation during the two
quarters following the merger. The underdog tripled its value
• Achilles’ heel: long decision making process
• Paris‘ arrow: aggressively provided bid offers
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Step 5
TOCICO 2012 Conference
Return to step 1 if the adversary's Achilles’ heel has moved
elsewhere – avoid inertia
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Avoid Inertia – Huawei Case
TOCICO 2012 Conference
• Huawei, a Chinese telecom supplier, identified the
reluctance of incumbent competitors to pursue legal
action against large Chines companies
• Huawei was encouraged to ignore IP rights
• However, in 2003 Cisco wan a major lawsuit against
Huawei for infringing Cisco’s source code
• In 2004 during a SuperComm Show a Huawei employee
was suspected of industrial espionage at the Fujitsu
booth.
• Achilles‘ heel: ignoring NDA’s
• Paris‘ arrow: lawsuit for illegal use of source codes
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Achilles’ Heel Implications
TOCICO 2012 Conference
1. How to make the adversary’s Achilles’ heel weaker
2. How to protect our Achilles’ heel from the adversary’s
attack
3. How to improve our value offer to our customers so they
will better protect their Achilles’ heel
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Summary
TOCICO 2012 Conference
• Achilles’ heel strategy enables small companies to compete
with large adversaries
• It has helped law-enforcement agencies in their never-ending
war against crime
• It helps differentiate your value offering by defending the
customers’ Achilles’ heel.
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© 2012 TOCICO. All rights reserved.