Utkarsh Rai

Vasco da Gama’s discovery of an alternative trade route from Europe to India through the “Cape of Good Hope” was a historic event. This was the beginning of weakening of the monopoly of the Arabs who controlled the trade between Asia and Europe for many centuries along with Venetians. Portuguese had captured major ports like Mombasa, Muscat, Goa, Ceylon and Malacca and made a new trade route through “Cape of Good Hope”. But Diu was not in their control. Without this, the trade route could not be fully secured. Arabs felt the effects of losing this lucrative monopoly – something they were unprepared for.

Lesson: Innovation is the key for to overcome entrenched incumbents. The advantages of installed product base and distribution channels are not sufficient to sustain the monopoly for long. Companies must innovate and sometimes cannibalize their existing product with a new one to maintain the leadership position. Otherwise, a new competitor with innovative product will suddenly capture the market.

Europe and West Asia started seeing the Christian-Islamic power struggle over the trade. Slowly, the struggle spilled over to the Indian shores too. The Diu battle was one of the rare occasions when the multi-national forces were engaged in a battle along the Indian coast. Portugal viceroy Almeida had lost his son in the first battle of Chaul in 1508. In that first battle, the Egyptian fleet along with Gujarat had defeated the Portuguese. Almeida was determined to take revenge quickly as his successor Albuquerque was already dispatched from Portugal.

Lesson: When the stakes are high, expect intense competition. Understanding the competition’s strategy as well identifying the driver for the fight is vital. If one side is tremendously motivated to win, the other side must understand this and factor that into its strategy.

The Egyptian fleet joined hands with the Sultanate of Gujarat. They were also joined by Zamorin of Kerala who was upset with Portuguese partnering with their enemies in Kerala. The Portuguese had eighteen ships commanded by the Viceroy, and the Allies had one hundred ships, but only twelve were major vessels and the rest were shallow draught craft. These small crafts proved ineffective because of two reasons. They could not approach the enemy ships due to the ship-based artillery fire and even if they could get closer, their sailors could not climb on to the enemy ship

Lesson: Having the right type of resources is more important than simply having more resources. Under pressure from the management to meet hiring goals, manager sometimes lowers the quality bar and expands staff. This always backfires as it impacts productivity, team performance, and effectively dilutes product quality in addition to schedule delays. Equally important is the effective usage of available resources. As soon as the Egyptians realized that the small crafts were ineffective in fighting the Portuguese ships, they could have utilized these crafts for other purposes like night attacks, espionage, transport of goods and injured. Similarly, the available resources – if not useful for the initially planned work — should be redeployed for other productive activities

The Egyptian forces figured out that Portuguese fleet were better equipped and were superior in ship-based artillery. Therefore, they decided to take advantage of Fort of Diu as it had the land-based artillery, which could match the ship-based artillery. They had adopted a defensive approach of waiting for Portuguese to come near the port, because they were used to the Mediterranean-style wars where land-based artillery is used more often. Egyptian did not realize that the Portuguese ships were more rugged prepared for the storms in the Atlantic Ocean, and the Egyptians assumed the Mediterranean type of warships. Soon, Egyptians lost the naval battle and hand to hand battle at Diu harbor, as they were no match to the Portuguese

Lesson: One should know the turf where one has to play. Egyptians had done the right thing in choosing Diu – the turf they knew well. But they lacked an understanding of the competitor’s product, and therefore couldn’t position its product well against the competitor’s. It is not true that if one dominates one market segment, one can win easily in the other segments too. This is the mistake Egyptians did when they considered only the Mediterranean-style warfare.

The viceroy extracted a huge payment, but rejected the offer of the city of Diu which he thought would be expensive to maintain, although he left a garrison there. The prisoners from the first battle of Chaul were also rescued by the Portuguese.

Lesson: Keeping the full city under control would have been a short term advantage to the Portuguese, but they maintained a minimum required presence to serve the strategic purpose of providing security to their trade route. Similarly, one should avoid the temptation of taking on more or to committing more to the customer without ascertaining whether it aligns with the strategy. If not well thought through, a company can get overextended in commitments. In the long run, this will require diversion of resources from other projects impacting them too.

The new viceroy, Albuquerque, arrived and Francisco de Almeida advised him to control the sea route if he wanted to keep India. Few more battles were fought against the Portuguese, all in vain. The Portuguese enjoyed the trade supremacy for hundred years until the arrival of the British East India Company.

Lesson: It is important to do the proper handover of the job. Job handover is more effective if the strategic knowledge and experience are also transferred This is vital in continuing the best practices.