Eminent economist Dr Jorge A Vasconcellos e Sá, covers a range of issues, from global business to Portuguese commerce. Dr Vasconcellos e Sá has a PhD from Columbia University and is the Jean Monnet Professor at the University of Lisbon. He also writes for Portugal’s Diário Económico and Expansion, the largest financial newspaper in Spain.
The comments of Julius Caesar about his war with Galia and against Pompeii, based on his letters to the Senate, show some fundamental principles about the management of organisations. Let us choose two: to avoid combat and quality. To avoid combat, Caesar spent months and months in Ravena before crossing the Rubican, negotiating for a long time with the Senate. Only when he saw that the only alternative was the loss of his ‘dignitas’, expropriation and exile, did he attack.
Managers have four techniques available to them in order to avoid competition. Firstly, segmentation – for example, Timex launched a line of watches for teenagers, another for skiers and another for people who do aerobics. Secondly, niching – that is to concentrate on a niche within the current segment (within its segment, SWATCH launched another line ‘Skin’ and another for the seaside, a chronographer).
Thirdly, the creation of barriers to the incoming products in order to make the entrance of competition difficult (when Coca-Cola replaced sugar with a sweetener based on corn in order to reduce costs by 20 per cent, it made long-term contracts with suppliers, thus monopolising the overwhelming majority of the productive capacity). Finally, alliances that transform a competitor into a partner (the merger of UBS with SB reduced the costs of personnel by 23 per cent, besides allowing the sale of many furniture and real estate agencies).
When one cannot avoid competition, the aim should be quality – Caesar’s army was not larger than Pompeii’s, it was better. More disciplined (flexible in everything, Caesar was intransigent as regards discipline), faster (his enemies said that he had arrived before they knew he was coming) and more motivated (Caesar’s generosity was legendary). Well, it’s not the largest that win, it’s the best. When IBM attacked Remington, Rand, ATT, General Electric etc. at its ascending stage, it was not bigger than these companies, it was in fact smaller.
Afterwards, it was so large that the other companies said that IBM was not a competitor, the environment and the computer market represented Snow White and the Seven Dwarfs. It was then that it started losing parts of its market to much smaller companies (at the beginning): Microsoft, Compaq, Packard, Bell, Gateway, etc.
To avoid competition (with four means) and quality (in human resources and organisation) are two of the qualities that made enemies hate Caesar, because the qualities of the latter made them more conscious of their limitations.