Another classic battlefield maneuver, the hammer and anvil deals a crushing blow to opposing forces by splitting your own forces in two sandwiching the enemy. In pitched battles the hammer and anvil has two groups, a group of foot soldiers and a group of cavalry. While the foot solider (the anvil) hold the front lines and battle the enemy 1×1 the cavalry (the hammer) sweeps around behind the enemy and pushes them towards the foot soldiers.

In business the hammer and anvil could simply be called “innovate and serve” where innovation is the hammer and serving your customers is the anvil. When looking at a market determine what innovations would win over your competitors customers and do this while meeting or exceeding their expectations on things like price, quality, quantity, and customer service quality.

Consider Amazon vs. Walmart. Both sell retail products to consumers and at some level both promise savings or low costs. However, Amazon opted to lose money for years to invest in their infrastructure such as warehousing and robotic automation. This allowed them to provide an innovation like faster shipping times to major metropolitan areas. Amazon introduced other innovations as well such as letting others sell on their platform, Amazon Prime, Prime Day, and recently their own advertising network. These have caught Walmart, the incumbent retail giant, between having to maintain their commitments to customers while making deep investments in new infrastructure and future innovations. (I should note that Walmart’s revenue has more than doubled since Amazon was founded and has only not increased 1 year since 2005).

Pros vs. Cons
Pros: Innovation often leads to more customers, higher margins, and lower costs in the long-term.

Cons: Being an innovator can lead to short-term losses upsetting investors or if you’re a small business leading to cash flow problems. While the hammer and anvil might put pressure on your competitor, it may not defeat them or even lead to large revenue losses as is the case with Amazon vs. Walmart (2018 revenue – Amazon $232.87 million, Walmart $500.34 million)