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The strategic mistake: Ignoring Iran’s indispensable global leverage

How misreading Iran’s chokepoint power in Hormuz triggered global disruption and exposed a strategic blind spot

Al Ries and Jack Trout are considered America’s foremost marketing strategists, where their seven solo- and co-authored books are bestsellers. Three of their books became standard readings for my senior-level Marketing Strategy students when I taught at the University of Northern Iowa (UNI). All seven of their books were thoroughly discussed when teaching Marketing Management for UNI’s MBA program in Hong Kong.

If President Trump, Pete Hegseth and their military advisors had consulted even one of Ries and Trout’s bestselling books, the Iranian war might have been avoided. Let me explain.

The Law of Focus

In Ries and Trout’s book titled The 22 immutable laws of marketing, law number 5 is “The Law of Focus.” The subheading of that law states “The most powerful concept in marketing is owning a word in the prospect’s mind.” For example, Federal Express is associated with the word “overnight” in most people’s minds. When a product needs to be delivered tomorrow, customers typically choose FedEx.

Ries’s book Focus emphasizes that successful businesses must focus and take ownership of a unique attribute that is difficult to replicate and is firmly established in their target market’s mind.

This concept applies to countries whose prospects are other countries. This is known as strategic indispensability; other countries will struggle without your resources. In global trade, it is unwise to impose tariffs or start a war with a country that supplies something essential to your country.

Iran

The Strait of Hormuz is Iran’s focal point of dominance and a strategic indispensability factor. An average of 138 ships sail through Hormuz daily. Only 19 ships have passed through the strait since the ceasefire, and nearly 800 ships have been stranded for several weeks (BBC).

Iran, therefore, controls the passage of ships transporting oil, liquefied natural gas (LNG), fertilizer-related products, sulfur, helium and petrochemicals to 14 countries: Bahrain, China, India, Israel, Kuwait, Malaysia, Oman, Pakistan, Qatar, Russia, Saudi Arabia, Thailand, United Arab Emirates and USA.

Strategic Indispensability

Focus, economic leverage and long-term sustainability for any country comes from three things: 1) a chokepoint, where one route or facility is hard to bypass (e.g., Strait of Hormuz), 2) processing dominance, where the raw material exists elsewhere but one country controls the refining of a manufacturing step (e.g., rare earths and chips) and/or 3) a single-point dependence, where a tiny number of firms or places hold most of the capacity, making disruption globally costly.

Examples of country’s focus, leverage and strategic indispensability

The United States dominates high-end advanced technology, defense alliances and other countries’ dependence on access to America’s financial industry.

China controls ~90% of rare earth processing, giving it export control over rare earths that are vital for defense, electronics, clean technology and semiconductor supply chains.

Countries with leverage in semiconductor materials and equipment include China, Japan, Netherlands, South Korea and Taiwan. Taiwan produces over 90% of the world’s most advanced chips.

Key players in the LNG and helium industries include Algeria, Australia, Qatar and Russia.

The major strategic indispensability for Egypt is their access to the Suez Canal.

Saudi Arabia’s oil production is its dominating factor worldwide.

Europe relies on Norwegian natural gas as a major non-Russian supply source.

Countries that are strategically indispensable for nickel, which is critical for batteries and stainless steel, include Australia, Canada, Indonesia and Philippines.

Argentina, Australia, Bolivia, Canada, China, Chile, Congo and Peru are key suppliers of copper and lithium, which are vital for electrical and energy storage applications.

Diplomacy 101

It’s a shame the rookie diplomacy crew at Trump 2.0 didn’t learn from Presidents Reagan, G.H. Bush, Clinton, G.W. Bush, Obama and Biden that you do not invade a country if it has dominance (strategic indispensability) over a product, good or service your country needs.

The United States and virtually every country will pay dearly to end the war Mr. Trump started without understanding the concept of strategic indispensability, without seeking Congressional authorization and without consulting with NATO members and a multitude of other foreign leaders.

Dear Mr. Trump

Mr. Trump, I encourage you and your administration to consult a scholar from a major business school to explain the concepts of focus, leverage and strategic indispensability. These principles are relevant not only to the Iranian war but also to imposing tariffs on countries that supply essential products, goods and services to America. It’s not surprising that countries that you slapped a tariff on, like Brazil, China and India, are purposely seeking alternative trading partners other than America.

Hope springs eternal

Effective leadership is needed in the White House, Department of Defense, military advisors and 535 Congressional delegates to ensure a clear understanding of the focus, leverage and strategic indispensability factors for the United States and other nations. This understanding will enable America to act appropriately in the global economy as allies rather than adversaries.

——-

Steve Corbin is a Professor Emeritus of Marketing,

University of Northern Iowa and non-paid freelance guest

columnist contributor to 158 newspapers and 47 social media platforms in 44 states.

Starting at $4.38/week.

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