Sun Tzu emphasized the importance of calculations (算) for winning wars. To him, success is straightforward. The more one calculates, the better chance one will win. The calculations are based on seven areas:

(1) Which of the two sovereigns is imbued with the Moral law? (2) Which of the two generals has most ability? (3) With whom lie the advantages derived from Heaven and Earth? (4) On which side is discipline most rigorously enforced? (5) Which army is stronger? (6) On which side are officers and men more highly trained? (7) In which army is there the greater constancy both in reward and punishment? By means of these seven considerations I can forecast victory or defeat. [主孰有道？将孰有能？天地孰得？法令孰行？兵众孰强？士卒孰练？赏罚孰明？吾以此知胜负矣]

I consider the English translation of the seven considerations adequate except for the first. The word “道” is really an amazing word which has different facets. The “Moral law” comes across to me as too “ethics” focused. Its extensive meaning can include path, journey, moral, reason, law and doctrine. These are to be displayed through actions, behaviors and speech.

In the art of war, Sun Tzu wrote that “The Moral Law” causes the people to be in complete accord with their ruler, so that they will follow him regardless of their lives, undismayed by any danger [道者，令民與上同意，可與之死，可與之生，而不畏危也]. Therefore taking the perspective of modern business, this word “道” can mean having a common belief, values, mission and “spirit” that unites the entire organization. 

In short, the seven considerations for modern business in determining competitive advantage according to Sun Tzu are:

1. Which organization has a stronger sense of mission, and a common belief that unites everyone towards a common vision?

2. Which organization has top leaders who are more capable?

3. Which organization faces more favorable macro/external conditions?

4. Which organization is more disciplined in execution?

5. Which organization has more resources?

6. Which organization has workers who are more competent and skilled?

7. Which organization practices clearer reward system?

How does your organization perform according to Sun Tzu’s model of competitive advantage?