Judo strategy - The competitive dynamics of Internet time

Competition on the Internet is creating fierce battles between industry gia nts and small-scale start-ups. Smart startups can avoid those conflicts by moving quickly to uncontested ground and, when that's no longer possible, t urning dominant players' strengths against them. The authors call this comp etitive approach judo strategy. They use the Netscape-Microsoft battles to illustrate the three main princi ples of judo strategy: rapid movement, flexibility, and leverage. In the ea rly part of the browser wars, for instance, Netscape applied the principle of rapid movement by being the first company to offer a free stand-alone br owser. This allowed Netscape to build market share fast and to set the mark et standard. Flexibility became a critical factor later in the browser wars. In December 1995, when Microsoft announced that it would "embrace and extend" competit ors' Internet successes, Netscape failed to give way in the face of superio r strength. Instead it squared off against Microsoft and even turned down n umerous opportunities to craft deep partnerships with other companies. The result was that Netscape lost deal after deal when competing with Microsoft for common distribution channels. Netscape applied the principle of leverage by using Microsoft's strengths a gainst it. Taking advantage of Microsoft's determination to convert the wor ld to Windows or Windows NT, Netscape made its software compatible with exi sting UNIX systems. While it is true that these principles can't replace basic execution, say t he authors, without speed, flexibility and leverage, very few companies can compete successfully on Internet time. Reprint 99110.