Lanchester Strategy

Frederick William Lanchester was an English engineer who made important contributions to automotive engineering (founding his own car company) and aerodynamics in the early 20th century and co-invented the topic of operations research.

Lanchester’s Power Laws

Lanchester was particularly interested in predicting the outcome of aerial battles. In 1914, before the start of World War I, he published his ideas on aerial warfare in a series of articles that were published in book form in 1916 as Aircraft in Warfare: the Dawn of the Fourth Arm, and included a description of a series of differential equations that are now known as Lanchester’s Power Laws.

Lanchester’s 1st Law – The Linear Law or Law of Single Combat

Prior to the advent of modern weapons battles were effectively a series of one-on-one combats, where one soldier could only kill one enemy soldier at a time. The outcome depended on the numerical strength of the fighting force and the effectiveness, E, of that force, where E was due primarily to the effectiveness of their weapons. So the 1st law was:-

Combat Strength = E x Numerical Strength

and the side with the greater combat strength would win.

Lanchester’s 2nd Law – The Square Law or Law of Stochastic (Wide Area) Combat

The ability of modern weapons to operate at long ranges and over a wide area dramatically changed the nature of combat. One soldier could kill many enemy soldiers at the same time.

The outcome still depended on the effectiveness, E, of the weapons and the numerical strength, but the numerical strength had a greater effect and so the 2nd law was:-

Combat Strength = E x (Numerical Strength Squared)

New Lanchester Strategy

Lanchester’s laws were implemented in successful war strategies by the Allies in World War II. After World War II, renowned quality expert Edward Deming applied the laws into operations research. The Lanchester Strategy was introduced in Japan in the 1950s and popularized by Japanese consultant Nobuo Taoka in the 1960s and numerical strength in war was interpreted to be market share in commercial battles, hence the Japanese focus on market share.

What was called in Japan ‘New Lanchester Strategy’ was increasingly used to capture market share, with Canon (a small player at the time) being one of the first companies to utilize the strategy globally during its fierce battle with Xerox (the market leader) in the photocopier market in the 1970s and 1980s.

Lanchester’s Rules

Always attack someone weaker than yourself, either a weaker company or a weak aspect of a larger company.

So for a small company to defeat a larger company, concentrate your smaller resources to attack a single weak point (e.g.  a market segment (resegment the market to your favour), a product or product feature, a client or a region) of a rival so that locally you have the advantage. Once that battle is won, move onto the next local battle – a version of ‘Divide and Conquer’, called Single Point Concentration. The following chart gives some ideas about how to proceed in different market situations and the level of resources (typically this means sales & marketing) needed to win the local battle if your effectiveness, E is the same as your competition.

Lanchester Strategy

Product & Marketing Effectiveness, E

If you have a better product in the key aspect that is important to your chosen market segment; perhaps price, or ease of use, or reliability, or customer support, or a particular feature, then your local effectiveness, E, will be better than your competitor and you won’t need quite as many resources as the chart suggests.

Note there are some similarities here with disruptive innovation (Enter a particular market segment with a new technology that has a key advantage), that may chime with what you want to do.

Also, if your marketing campaign is more targeted to your chosen market segment and their needs and how your product will meet them, then your local effectiveness, E, will be better than your competitor and you won’t need quite as many resources as the chart suggests.

Furthermore if your sales people are better than the competitor’s, then you may not need so many resources as the chart says, but how will you know they are better? – They will tell you they are better, but you won’t know until part way through the campaign, by which time the competition will be warned and you won’t have made sufficient gains because you did not put in sufficient resources.

Winning Campaign

To stand the best chance of winning, you must make sure that everything is in alignment.

  • The needs of your chosen market segment must match the strengths of your product
    • If they don’t choose a different segment, or improve your product in that area before you start.
  • The marketing campaign must be aligned to that market segment and their needs and the matching product strength.
  • The sales force must focus on that segment.
    • They must be trained & assigned to that segment in sufficient numbers to ensure overwhelming local strength until that campaign is won.
  • You should also try to have the element of surprise on your side – Hit hard and fast, so as not to give your competition time to react.

The 21st Century – Lanchester 2.0

We might ask whether in the modern age of the internet, social media, brand awareness and viral campaigns, Lanchester’s original laws still apply in the same way?

Perhaps the law is the same, but we should take these things into account. So Effectiveness would include the effectiveness of the brand and social media etc, and this can make the effectiveness much more powerful than it would be without these things.

Plus in the numerical strength figure, perhaps we should include all the product fans who are promoting the product in their blogs and social media posts, not just the traditional sales force.

What do you think?

If any of this is of interest and you would like to discuss it further, please contact us.