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The founder of Lanchester's Law is F.W. Lanchester, a British technical engineer. Originally an automotive engineer, his intense curiosity led him beyond narrow technical fields. While serving as a consultant to Benz, he shifted his interest to aircraft and became a great aeronautical engineer. His research on propellers also earned him historical fame.
However, these achievements did not satisfy Lanchester's curiosity. While studying propellers, he developed interests in other areas. He became fascinated with the numbers of actual aerial combat, questioning how the outcomes of battles between different numbers of aircraft would unfold. This prompted him to collect data from ground battles to explore whether a law existed between force ratios and damage amounts. This was the origin of Lanchester's Law.
Lanchester's Law is divided into the First Law (the law of single combat) and the Second Law (the law of concentrated combat). From these two concepts, the strategies for the weak (application of the First Law) and the strong (application of the Second Law) are derived.
After World War II, it was gradually extended to marketing strategy management. Lanchester's Law is not only an effective marketing management principle but also has significant practical value in product strategy, market planning, and distribution channels.
Lanchester's Law mainly includes the following elements:
1. Basic allocation of marketing forces. According to research by economic and management circles, the prerequisite for a company to achieve maximum profit at minimum cost is that the ratio of strategic force to tactical force is at least 2:1. This determines the basic allocation of marketing forces in a company's marketing strategy. Companies should use this ratio as a guiding principle to allocate marketing strategic force and tactical force, distribute marketing power and resources, avoid overemphasizing tactics while neglecting strategy, and avoid focusing only on short-term benefits while ignoring long-term interests, thereby creating an optimal cost-profit combination. Marketing strategic force belongs to the invisible decision-making realm, including brand, corporate image, product development, pricing, advertising, and distribution channels. Marketing tactical force refers to the visible, directly communicable sales force, such as sales organization, sales methods, terminal promotions, and sales personnel quality.
2. The "Three-One" theory and target management of market share. In local battles, the combat force ratio between competitors develops to 3:1, and in probability battles to 1.732:1, making it impossible for the weak to turn defeat into victory. This ratio range is called the firing range. When the market share ratio between two competitors exceeds the firing range, the weaker party should promptly abandon operations, preserve strength, and find a new path. This model also provides target management indicators for market share, including upper limit, lower limit, and relative safety indicators. The upper limit is 73.88%, at which point regardless of the number and strength of competitors, the average market share is beyond the firing range of the company, thus constituting a monopoly condition. 26.12% is the lower limit of market share; even if the company ranks first, it is extremely unstable and subject to attack at any time; it is the upper limit of disadvantage. When market share reaches 41.7%, the company enters a relatively safe zone, which is the primary target for all companies competing.
3. First-place doctrine. Within the firing range, to increase market share, a company must strive to create first-place positions. This includes: first-place products, such as new or differentiated products; first-place retail order rates, which is the most critical step in distribution strategy; and first-place regions, meaning after segmenting the market, attack each segment one by one, from regional first to overall first. According to Lanchester's Law, the priority order of strategy implementation differs between strong and weak players. Weak companies should engage in local battles, with the direction being region → order rate → product, first limiting regions to create strongholds, concentrating easy-to-sell products, and making regional attacks a prerequisite. Stronger companies, on the other hand, follow the opposite order: product → order rate → region, using powerful products as strategic weapons to launch large-scale overall attacks, breaking through weak competitors' regions, and ultimately achieving first-place regions. This method of determining strategic order based on strength has been widely used by foreign companies.
4. Three-point attack strategy. When developing a regional market, a company first segments the region based on natural and artificial geographical conditions, population concentration, and population movement patterns. Then it selects three most advantageous points that can form a triangle to surround the region, attacking each point one by one to achieve a relative safety value of 40% market share. Once the area is formed, it advances from three directions toward the center of the final target, causing competitors to collapse in the encircled area. This method, also known as the point-line-surface law, provides the basic principles and implementation steps for regional strategy.
5. Competitive targets and attack targets. In market competition, the strong tend to be on the defensive, while the weak tend to attack. Defense and attack strategies differ, so it is essential to first distinguish between attack targets and competitive targets. Those stronger than oneself are attack targets; those weaker are competitive targets. For attack targets, a differentiation strategy should be used, increasing market share through unique brand image, technology, product performance, and customer service. For competitive targets, a defensive strategy should be used, closely monitoring the opponent's actions, preemptively imitating tactics, and disrupting their plans. Here, establishing the strategic posture of both sides is the first step in adopting appropriate strategies.
6. Differences between strong and weak. Weak companies should focus on one-on-one combat, creating strategic areas and strategic products for single combat, avoiding targeting all products and all regions. They should select specific target segments, engage in local battles, and achieve final victory by turning points into lines and lines into areas.
7. Position-based differentiation strategy. In marketing, a company must consider its position in the industry and market. Among many attack targets, first concentrate on the immediate enemy within firing range, avoiding creating multiple enemies. The number-one company should frequently introduce new products and promptly understand the possible differentiation strategies of the number-two company, thereby gaining a time advantage. Therefore, its intelligence capabilities, intelligence management systems, and innovation capabilities are key to maintaining its position. The number-two company must carve out a survival space through originality and decide the outcome through differentiation. In summary, all companies should flexibly apply various strategies based on the specific product's regional and distribution characteristics.
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