Words: 299
The aim of defensive strategy is to reduce the probability of attack, divert attacks to less-threatened areas, and lessen their intensity. Position Defense Occupying the most desirable market space In consumers’ minds, making the brand almost impregnable. Flank Defense The market leader should erect outposts to protect a weak front or support a possible counterattack. Preemptive Defense A more aggressive maneuver Is to attack first, perhaps with guerrilla action across he market – hitting one competitor here, another there- and keeping everyone off balance. Another Is to achieve broad market envelopment that signals competitors not to attack. – Another preemptive defense Is to Introduce a stream of new products and announce them In advance. Such “pronouncements” can signal competitors that they will need to fight to gain market share. Counteroffensive Defense The market leader can meet the attacker frontally and hit its flank, or launch a nicer movement so it will have to pull back to defend itself. Another form is the exercise of economic or political clout. The leader may try to crush a competitor by subsidizing lower prices for the vulnerable product with revenue from its more profitable products, or it may prematurely announce a product upgrade to prevent customers from buying the competitors product. Or the leader may lobby legislators to take political action to inhibit the competition. Mobile Defense
The leader stretches its domain over new territories through market broadening and market diversification. – Market broadening shifts the company’s focus from the current product to the underlying generic need. – Market diversification shifts the company’s focus into unrelated industries. Contraction Defense Sometimes large companies can no longer defend all their territory. In planned contraction (also called strategic withdrawal), they give up weaker markets and reassign resources to stronger ones.