Mastering Strategic Movement at Palm

Whether you’re a startup taking on industry giants or a giant moving into markets dominated by powerful incumbents, how do you compete with opponents that have size, strength and history on their side? To prevent opponents from bringing their full strength into play, successful challengers use what authors David B. Yoffie and Mary Kwak of Harvard Business School call judo strategy. Judo strategists avoid head-to-head struggles and other trials of strength, which they are likely to lose. Instead, by relying on speed, agility and creative thinking, they develop strategies that make it difficult for stronger rivals to compete.

Judo strategy is most effective when three core principles — movement, balance and leverage — are used in combination. But at different stages of competition, a single principle may play a particularly important role. In the early days of a business, for example, before the contours of the competitive landscape have been fully defined, movement typically takes center stage.

The authors use Palm Computing (now Palm Inc.) to illustrate judo strategy’s core principle of movement at work. The company dominated the handheld computing market less than a year after shipping its first electronic organizer in early 1996, despite competition from the most powerful software company in the world. Microsoft marshaled masses of money, manpower and marketing muscle behind its own handheld operating system. But year after year, Palm remained far ahead.

By mastering the principles of judo strategy and learning to implement them through specific techniques, other companies can emulate the way Palm competed with a stronger opponent. The authors came to that conclusion after studying companies as varied as Juniper Networks, Intuit, Frontier Airlines and Charles Schwab. They caution, however, that judo strategy is not a rigid formula to be followed step by step. Depending on the nature of their competition, companies will combine and implement the principles in different ways. But the basic tenets hold: Stay out of competitors’ sights by deliberately acting harmless (like a puppy dog), define the competitive space to establish the game, and follow through fast to build a big lead before competitors learn how to respond.