Defensive Strategies

Also called reactionary strategy

Management approach to reduce the risk of loss or being attacked
The primary purpose of defensive strategy is to make a possible attack unattractive and discourage
potential challengers from attacking another firm
A defensive strategy is largely reactive to the competition or perceived occurrences in the market
according to Massachusetts Institute of Technology. It seeks to counter product claims made by
the competition or to stem the tide of a perceived competitor advantage for example a company
that highlights the effectiveness of its products in the wake of competitor claims of product
inferiority , eg BMWs advert BMW beats all the bends.
A company may also seek to introduce products into the market that are better its existing
offerings. A company assesses its weaknesses and then attacks its own weaknesses to come up
with more effective and better products than the existing offerings e.g. Schweppes introduced
juices
Defensive strategies are marketing warfare strategies designed to protect:
Market share to keep up top position in local and existing market
Profitability
Product positioning
Mind share
Defensive Strategy Principles:

Always counter attack with equal or greater force

Defend every important market
Asses the strength of the competitor
The best defense is to attack yourself i.e. weaknesses

1. Offensive Strategies
Refers to those strategies that companies adopt to stay ahead of the competition rather than react
to the competition.
An offensive competitive strategy is generally what separates trend-setters from followers
One disadvantage of an offensive competitive strategy, however, is that it is expensive

Approaches

Offensive attacks may or may not be aimed at particular rivals; they are motivated by a desire to win
sales and market share at the expense of other companies in the industry.
2. There are six basic types of strategic offensives:
a. Initiatives to match or exceed competitor strengths
b. Initiatives to capitalize on competitor weaknesses
c. Simultaneous initiatives on many fronts
d. End-run offensives
e. Guerilla offensives
f.

Preemptive strikes

3. Initiatives to Match or Exceed Competitor Strengths: The first is when the company has no
choice but to try to cut away at a strong rivals competitive advantage. The second is when it is
possible to gain profitable market share at the expense of rivals despite whatever resource
strengths and capabilities they have. Attacking a powerful rivals strengths may be necessary when
the rival has either a superior product offering or superior organizational resources and capabilities.
The classic avenue for attacking a strong rival is to offer an equally good product at a lower price.
Other strategic options for attacking a competitors strengths include going into next-generation
technologies to make the rivals products obsolete, adding features that a competitors product
doesnt have. Eg CBZs Funeral Cash Plan to match First Mutuals Cash
Plan
4. Initiatives to Capitalize on Competitor Weaknesses: Initiatives that exploit competitor
weaknesses stand a better chance of succeeding than do those that challenge competitor
strengths. Options for attacking the competitive weaknesses of rivals include: (1) going after the
customers of those rivals whose products lag on quality, features, or product performance, (2)
making special sales pitches to the customers of those rivals who provide subpar customer
service, (3) trying to win customers away from rivals with weak brand recognition, (4) emphasizing
sales to buyers in geographic regions where a rival has a weak market share or is exerting less
competitive effort, and (5) paying special attention to buyer segments that a rival is neglecting or is
weakly equipped to serve.
5. Simultaneous Initiatives on Many Fronts: Multifaceted offensives have their best chance of
success when a challenger not only comes up with an especially attractive product or service but
also has the brand awareness and distribution clout to get buyers attention. Eg Econet
6. End-Run Offensives: to maneuver around competitors, capture unoccupied or less congested
market territory, and change the rules of the competitive game in the aggressors favor. Examples
include: (1) introducing new products that redefine the market and the terms of competition, (2)
launching initiatives to build strong positions in geographic areas where close rivals have little or no
market presence, (3) trying to create new segments by introducing products with different attributes
and performance features to better meet the needs of selected buyers, and (4) leapfrogging into
next-generation technologies to supplant existing technologies, products, and/or services.

7. Guerrilla Offensives: Guerrilla offensives are particularly well suited to small challengers who
have neither the resources nor the market visibility to mount a full-fledged attack on industry
leaders. Guerrilla offensives can involve making scattered random raids on the leaders customers,
surprising key rivals with sporadic but intense bursts of promotional activity, or undertaking special
campaigns to attract buyers away from rivals plagued with a strike or problems meeting delivery
schedules. Eg Nigerian Shops
8. Preemptive Strikes: Preemptive strategies involve moving first to secure an advantageous
position that rivals are foreclosed or discouraged from duplicating. There are several ways a firm
can bolster its competitive capabilities with preemptive moves: (1) securing exclusive or dominant
access to the best distributors in a particular geographic region or country, (2) moving to obtain a
more favorable site along a heavily traveled thoroughfare, and (3) tying up the most reliable, highquality suppliers via partnerships, long-term contracts, or acquisitions . Delta bought bottling
plant , Deltas distribution channels in rural areas

Defensive Approaches
Defensive strategies usually do not enhance a firms competitive advantage, they can definitely help
fortify its competitive position, protect its most valuable resources and capabilities from imitation,
and defend whatever competitive advantage it might have. Eg Ecoweb/ ZOL/ Liquid Merger
Defensive strategies can take either of two forms: actions to block challengers and signaling the
likelihood of strong retaliation.
CORE CONCEPT: It is just as important to discern when to fortify a companys present
market position with defensive actions as it is to seize the initiative and launch strategic
offensives.
A. Blocking the Avenues Open to Challengers
1. The most frequently employed approach to defending a companys present position involves
actions that restrict a challengers options for initiating competitive attack. Eg Econet was signing
on agreement with African Sun and African Sun demanded that they have a lead period over
RTG
2. There are any number of obstacles that can be put in the path of would-be challengers.
CORE CONCEPT: There are many ways to throw obstacles in the path of challengers.
B. Signaling Challengers that Retaliation is Likely
1. The goal of signaling challengers that strong retaliation is likely in the event of an attack is either to
dissuade challengers from attacking at all or to divert them to less threatening options. Either goal
can be achieved by letting challengers know the battle will cost more than it is worth.
2. Would-be challengers can be signaled by:
a. Publicly announcing managements commitment to maintain the firms present market share
b. Publicly committing the company to match competitors terms or prices
c. Maintaining a war chest of cash and marketable securities

d. Making an occasional strong counter response to the moves of weak competitors to enhance
the firms image as a tough defender