Raising Rivals’ Costs (Continuation)

Business A spends a few bucks to disrupt Business B, weakening its ability to compete and disciplining it to behave more to Business A’s liking.

The genius of the strategy lies in its ruthless efficiency. In the warfare of commercial competition, devastating a rival with little effort produces what antitrust lawyers call asymmetric costs. Examples include: Spreading misinformation about the rival’s product (“It killed a guy in Peoria!”), targeting the rival’s key customer with a below-cost offer that it can’t refuse, and designing computer software so that the rival’s software won’t work with it.

When Business A raises the costs of Business B, it generally leaves Business B to suffer. It doesn’t smash Business B and then try to nurse it back to health. That would defeat the whole purpose of asymmetrically raising the rival's costs. Unless of course Business A wanted to incorporate Business B into its empire from the get-go – a lá John D. Rockefeller and the old Standard Oil Trust.

Does the antitrust idea of raising rivals costs work for military action? Yes, but only if you shoot up the place and leave. If you stay, you have to fix what you shot up and integrate new territory into your existing structure. For the approach to make sense, you have to believe that the extra cost of staying will more than repay your (risky) investment. Otherwise, you chose the wrong strategery!