apply-indirect-strategy

Apply Indirect Strategy

Identify what the opponent's strategy depends on, attack that dependency rather than their strength, and make their position untenable without direct confrontation.

Why This Is Best Practice

Origin: Sun Tzu's most cited principle: "Supreme excellence consists in breaking the enemy's resistance without fighting." (不戰而屈人之兵, Ch.3). The chapter on Attack by Stratagem argues that attacking the opponent's strategy is superior to attacking their alliances, which is superior to attacking their army, which is superior to attacking their cities. Direct attack on strength is the lowest form of strategy.

Adopted by: B.H. Liddell Hart formalised the indirect approach as military doctrine after studying WWI's catastrophic direct-attack failures (Somme, Verdun, Passchendaele). His Strategy (1967) remains required reading at the US Army War College. Blue Ocean Strategy (Kim & Mauborgne, 2005) is the dominant business strategy framework built on the same logic: make competition irrelevant by competing on different terrain, not on the incumbent's chosen battlefield. Amazon's distribution flywheel, Netflix's DVD-to-streaming pivot, and Apple's iTunes-to-iPod ecosystem are canonical indirect strategy executions.

Impact: Direct confrontation against an entrenched opponent is expensive, slow, and often fails. Indirect strategy wins by making the opponent's position structurally untenable — their distribution advantage becomes irrelevant, their business model becomes uneconomic, their customer relationships get bypassed. The opponent's strength becomes a liability when the rules of the game change.

Why best: Most competitive strategy defaults to direct imitation: copy the leader's features, underprice them, and fight for the same customers through the same channels. This produces commoditisation and margin destruction. Indirect strategy identifies the structural dependency the leader's position rests on and attacks that dependency, often with a fraction of the resources required for direct competition.

Sources: Sun Tzu, The Art of War (Giles trans. 1910) — Ch.3 (Attack by Stratagem); Liddell Hart, Strategy (2nd ed., 1967) — the indirect approach in military history; Kim & Mauborgne, Blue Ocean Strategy (2005) — making competition irrelevant; Christensen, The Innovator's Dilemma (1997) — disruption as indirect strategy from below

Steps

Step 1: Map the opponent's strategy fully

Understand their strategy before designing yours. Identify:

• Their target customers and value proposition
• Their key dependencies: distribution channels, supplier relationships, regulatory advantages, technology platform, brand position, network effects
• Their strategic assumptions — what must remain true for their current position to be defensible?

The indirect attack will be aimed at the dependency or assumption that is most critical to their position and most vulnerable to disruption.

Step 2: Identify the structural dependency

Find the single resource, relationship, or condition that their strategy cannot function without. This is the indirect attack target.

Examples of structural dependencies:

• Physical distribution (attacked by e-commerce)
• A proprietary technology standard (attacked by an open standard)
• A captive customer relationship (attacked by interoperability or switching cost reduction)
• A regulatory advantage (attacked by regulatory change or a new jurisdiction)
• A high-cost business model (attacked by a lower-cost structure serving the same need)
• Incumbent's customer acquisition channel (attacked by a new channel they cannot easily adopt)

Step 3: Determine whether you can change the rules of engagement

The indirect approach works by changing the terrain so that the opponent's advantages no longer apply. Ask: "If the rules of this market changed in [specific way], would their strength become a weakness or irrelevance?"

Rule change	Incumbent advantage → liability
Distribution shifts online	Physical retail scale → cost burden
Open source commoditises the stack	Proprietary platform premium → obsolete
Regulation changes	Incumbency advantage → compliance burden
Customer willingness-to-pay shifts to different segment	Premium brand → over-engineered for new buyers
New technology bypasses existing infrastructure	Scale investment → stranded asset

Step 4: Attack the dependency — not the front line

Concentrate resources on undermining the structural dependency, not on competing feature-for-feature or price-for-price.

Tactics for attacking dependencies:

• Channel bypass: Build direct customer relationships that circumvent the incumbent's distribution (e.g., DTC brands bypassing retail)
• Open standard attack: Release or support an open standard that commoditises what the incumbent monetises as proprietary
• Business model disruption: Offer the same outcome at structurally lower cost by removing cost components the incumbent cannot remove (e.g., asset-light vs. asset-heavy)
• Segment flanking: Enter a segment the incumbent ignores or underserves; build a position there; expand from that beachhead
• Ecosystem bypass: Build an alternative ecosystem around the incumbent's dependencies (suppliers, developers, partners)

Step 5: Reserve direct confrontation for the decisive moment

Indirect strategy does not avoid conflict entirely — it delays direct confrontation until the opponent's structural position has been degraded enough that the confrontation can be won.

Once the indirect action has:

• Eroded the dependency (their distribution no longer works, their cost model is uncompetitive, their customer is defecting)
• Built your alternative position (new channel established, new segment owned, new ecosystem live)

Then move to direct competition on the new terrain — which is now terrain that favours you.

Step 6: Maintain the indirect posture as long as it works

Do not shift to direct confrontation prematurely. The indirect approach works precisely because the opponent does not recognise the threat until the dependency has already been undermined. Early direct confrontation triggers defensive response and helps the incumbent fix the vulnerability.

"Move only if there is an advantage to be gained. Fight only if a position is critical. A leader must not start a campaign out of anger." (Sun Tzu, Ch.12, Giles trans.)

Rules

• Never directly attack a strength. Attacking where the opponent is strong produces symmetric losses at best. Identify and attack the structural dependency instead.
• Attack the strategy, not the army. Undermining the opponent's plan is more valuable than defeating individual competitive instances (deals, markets, features).
• Be patient. Indirect strategy operates on a longer time horizon than direct competition. The dependency takes time to erode. Don't abandon the approach before it has time to work.
• Don't signal the attack early. Once the opponent understands the indirect approach, they can defend the dependency. Move quietly; reveal the strategy only after the position is established.
• Combine indirect and direct: use the indirect approach to change the terrain, then compete directly on the new terrain. The two are not mutually exclusive — they are sequential.

Examples

Amazon vs. retail (distribution dependency attack): Retail incumbents' structural dependency: physical store networks and the logistics to supply them. Amazon attacked the dependency by building superior fulfilment infrastructure and bypassing physical stores entirely. By the time traditional retailers attempted to respond, Amazon's logistics infrastructure was a decade ahead and their cost structure was incompatible with a profitable response.

Netflix vs. Blockbuster (business model dependency attack): Blockbuster's dependency: late fees (contributing ~16% of revenue) and physical store economics. Netflix's DVD-by-mail model bypassed the store, and the subscription model made late fees structurally impossible. Blockbuster's late fee elimination attempt in 2004 cost them $400M and proved the dependency: removing it destroyed their unit economics while failing to match Netflix's convenience.

Startup flanking a B2B incumbent (segment attack): Incumbent owns enterprise segment with 5-year contracts and deep integration. Indirect approach: enter the SMB segment the incumbent ignores (too small, too low-margin). Build product and distribution in SMB for 3 years. Move upmarket as SMB customers grow. By the time the incumbent notices the threat, the challenger has the infrastructure, the case studies, and the customer relationships to compete in mid-market.

Open source vs. proprietary database (standard attack): PostgreSQL and MySQL attacked Oracle's dependency on database licensing revenue. The open-source standard was not initially competitive on features — it flanked the pricing dependency, making Oracle's core revenue model untenable for all but the highest-stakes deployments. Oracle's strength (enterprise sales relationship, support contracts) became a niche rather than a market.

Common Mistakes

Attacking the front line first: Competing feature-for-feature or on the incumbent's chosen battlefield before establishing a differentiated position. This is direct strategy masquerading as competition. Result: commoditisation, margin pressure, no structural advantage.

Confusing flanking with niche retreat: Entering a small segment is not a strategy unless there is a path to scaling that position into the target market. Identify the beachhead-to-expansion path before committing to the segment.

Abandoning the indirect approach too early: Shifting to direct competition before the dependency has been sufficiently degraded. The incumbent sees the threat and fixes the vulnerability. Maintain the indirect approach until the structural change is irreversible.

Targeting the wrong dependency: Attacking a dependency the incumbent can easily replace or defend. The target dependency must be structural — deeply embedded in the opponent's business model or market position — not easily substituted.

Ignoring the opponent's adaptive response: A capable opponent will identify the indirect attack and attempt to adapt. Monitor their response and anticipate their counter-moves. The indirect approach requires ongoing adaptation, not a fixed plan.