Apple's highly successful introduction of the iPad back in April illustrates two important principles of military strategy. The first is that it is better to go around a fortified enemy position and take it from the flank, rather than trying to assault it frontally. Even better is to go around it completely and make it irrelevant. By introducing the iPad, Apple repeated its iPhone exploit. Instead of directly taking on makers of netbook computers and "lightweight" operating systems (and cellphones, in the case of the iPhone), Apple introduced game changing technology, essentially making the incumbent products irrelevant. The recent decisions by Microsoft, RIM, HP, Dell, etc. to cancel their existing tablet projects and start essentially from scratch shows just how disruptive the iPad is.
The second principle from military strategy is that the defence is always inherently stronger than the offence. This is because the defender chooses to fortify his position and takes on the enemy on ground and at a time of his choosing. By introducing the iPad, Apple is now in a strongly fortified position. Any challenger must take the company on in a frontal assault, or try to go around them. Both are extremely difficult, as Apple has the upper hand in terms of technology and product focus. In other words, they have chosen to fight their battle against competitors on ground and at a time of their choosing. Brilliant strategy if I say so myself.
Prudent risk management is about weighing potential risks against potential rewards and benefits. Carrying out dangerous and risky activities such as offshore drilling without carefully and fully weighing the risk-reward ratio is not only foolhardy, but can be considered unethical and irresponsible. Just in case the value of prudent risk management wasn't evident enough after BP's Gulf of Mexico oil disaster, now we learn that president Obama is setting up a commission to investigate oil industry procedures for offshore drilling.
So, in addition to all of the cleanup costs, lost revenues, lost oil reserves, potential civil lawsuits, reputational loss, and overall ecological destruction and economic disruption, BP and others involved such as Halliburton and Transocean must now weather the risks inherent in political investigations, increased government regulation and oversight, possible judicial proceedings, and general public opprobrium. I wonder what the senior leaders of BP now think of their investment in deepwater drilling? Would the short term gains of not having to drill relief wells before a blowout have outweighed the now obvious long term costs and losses from the disaster?Back to newsletters