#6 The Strategic Role of 'Earth': Insights from Sun Tzu on Location, Market, and Consumers

“Earth”, sometimes called terrain, is about the geography, or to be more relevant, the ground in which we operate. When I think of “earth”, location comes immediately to mind. That leads to the location’s infrastructure and accessibility, the availability of resources like labor and technology, limitations like whether there are any restrictive legislation, and environment factors of market demand, pricing, and special norms. The knowledge will support sound decision-making.

The location

When people want to buy a property – land, shop, house or condominium – their decision is primarily based on location. Knowing this, developers usually ask whether a location has proximity to infrastructures like roads, highways, bridges, bus and train stations, airport, schools and hospitals, etc. Their projects may also have plans for amenities like banks, shops, restaurants, etc. Of course, they will consider the availability of utility services such as water, electricity and telecommunications.

Escalating labor cost often drives manufacturers to set up their plants overseas. Many US athletic shoemakers like Nike and Reebok thus went offshore to Southeast Asian countries like Indonesia and Thailand where labor is cheaper. As for those in the electronics and IT industries, their choice of location was China as labor is not only relatively cheaper but the Chinese workers are also technically skilful. Although Donald Trump is a businessman, his mind has been clouded by politics. After he won the 2024 US Presidential election, many people expected him to follow through his calls for American industrialists to move their manufacturing back to USA. Unless American labor is competitive, it may not be possible.

The market

In trading, “earth” has gone beyond the interpretation of location, i.e. geographic zones. “Earth” should then be narrowly defined as the market. In the traditional sense, people go to a market to buy and sell goods and services. However, the internet has made everything accessible globally to consumers without their having to leave their homes.

Although each market is now more than a location, it still retains its peculiar properties. This means something saleable in a particular market may not be able to sell in another. As Malaysians are fond of spicy breakfast, it will be hard to sell bland Taiwanese breakfast in Malaysia, and vice versa.

The inhabitants

In our study of ““earth””, let us not forget its inhabitants. Firstly, inhabitants are the market groups, i.e. the different types of consumers. For FedEx, “earth” is not only about the countries and cities to operate, or types of services to offer, e.g. same-day or overnight delivery, but also includes market groups, e.g. homes or offices, large corporations, small-medium enterprises or individuals.

Naturally, businessmen often ask: How shall we get our products or services to our customers? This leads to the other inhabitants of “earth”.

Just as Sun Tzu’s words provoke thinking, let us ask whether to sell direct, e.g. open a shop for walk-in customers, or go for other channels, e.g. wholesalers or retailers. A channel can be short as in direct-selling, or long whereby goods have to pass through multiple distributors before reaching the buyers.

Many people erroneously think short channel is less costly. Actually, it is the costliest due to investments in acquiring and renovating physical premises for displaying and stocking the items, and hiring sales personnel. The only gain is full control of the business.

If we opt for other channels, i.e. using resellers, then we must work hard in forging an alliance with our resellers, regard them as our partners. When they tell us about problems with their customers, we must refrain from regarding them as unwelcome whiners. Instead, listen with empathy and try to resolve the problems.

In future discourses, I will share some ways of forging alliances