How to have both Profits and Profit the Sun Tzu Pang Dong Lai Way

Yes. Pang Dong Lai supermarket in Henan China is a powerful modern example of a principle that is often missed in Sun Tzu Art of War: the purpose of strategy is not to squeeze the maximum out of every transaction; it is to create conditions in which winning becomes easier and sustainable.

1. 道 — Win the People Before Winning the Market

Sun Tzu begins his five fundamental factors with 道 (Dao):

“道者，令民与上同意也。”

In warfare, Dao creates unity between leaders and their people. In business, the same principle can be interpreted as alignment between the organization and its employees.

Pang Dong Lai pays employees generously, gives substantial leave, shares economic benefits and treats employees as human beings rather than merely labour costs. Founder Yu Donglai has explicitly described the logic: treat employees well → employees treat customers well → a virtuous cycle develops.

That creates a powerful chain:

Care for Employees → Employees Care for Customers → Customers Trust the Company → Sustainable Profits

Sun Tzu would recognize this as winning internally before fighting externally.

2. 不战而胜 — Don't Fight the Price War

Many retailers fight by cutting prices, squeezing suppliers, reducing manpower and pushing employees harder.

Everybody fights everybody.

Pang Dong Lai takes a different battlefield.

Yu Donglai has criticized destructive price wars and squeezing suppliers as short-sighted, arguing instead for better products, quality control, employee training and higher pay. He has even said the company would rather close profitable stores than compromise its operating philosophy and customer experience.

This is very Sun Tzu:

The best strategy is not to fight harder than competitors.

It is to position yourself so differently that you don't need to fight their war.

That is 不战而胜 — Win Without Fighting.

3. 致人而不致于人 — Set the Rules of the Game

Sun Tzu says: “善战者，致人而不致于人。”

A superior strategist does not simply react to what competitors are doing. He shapes the situation so that others have to respond to him.

Pang Dong Lai could have accepted the conventional retail equation:

Low prices + low wages + thin service + high volume = profit.

Instead, it created another equation:

Higher wages + happier employees + trusted products + exceptional service = customer loyalty + productivity + sustainable profit.

Its 2025 revenue growth of 38.7% is striking evidence that being people-centric has not prevented commercial success.

Poor strategy asks: “Should I choose my people or my profits?”

Better strategy asks: “How can taking care of my people become the reason I make better profits?”

That is what Pang Dong Lai makes so interesting.

It doesn't prove that simply paying everyone more automatically produces profits. High wages alone are not the strategy. They work together with strong culture, operational discipline, product quality, customer experience and trust. Yu himself has cautioned that companies cannot simply copy the superficial practices without understanding the underlying system.

Sun Tzu never taught us to destroy the enemy. He taught us to create the conditions for victory.

Pang Dong Lai creates those conditions by first winning the hearts of its employees, then winning the trust of its customers—and profits follow.

The weakest company fights employees for productivity, suppliers for margins, customers for money, and competitors for market share.

The strategic company aligns their interests, so fewer battles need to be fought.”