Defensive & Offensive Strategies

S.P.K.Iresha

SH/2807

History of warfare strategies

In the 1980s business strategists realized that there was a vast knowledge

base stretching back thousands of years that they had barely examined.

They turned to military strategy for guidance.

Military strategy books like “The Art of War” by Sun Tzu, “On War” by Von

Clausewitz and “The Little Red Book “ by Mao Zedong became business

classics.

The first major proponents of marketing warfare theories was Philip Kotler

and

J. B. Quinn.

The main marketing warfare books were,

• Business War Games by Barrie James, 1984

• Marketing Warfare by Al Ries and Jack Trout, 1986

• Leadership Secrets of Attila the Hun by Wess Roberts, 1987

Offensive & Defensive Strategies

Offensive strategy is focused on

achieving competitive advantage.

Defensive strategy is focused on

attacking the competitor in order to take

him off.

Offensive strategic

market plans are

usually growth

oriented.

Defensive strategic

market plans are more

likely to be

implemented in the

latter stages of a

product-market life

cycle.

Defensive Strategy

Defensive marketing strategies

refer to the actions of a market leader

to protect its market share,

profitability, product positioning, and

mind share against an emerging

competitor.

Primary Purpose is to make possible attacks unattractive or

discourage competitors.

It is a developed to protect market share, position and

profitability.

It is a strategy that can be used to keep up top position in local

and existing market.

This strategy is most successful to keep up the customer’s

confidence which no new competitor can disturb.

Types of Defensive strategy

Attacker 1.Position

defense

2.Flankin

g

Defense

Defender

3.Preemptive

defense

4.Counter

offensive

defense

6.Contractio

n defense

5.Mobile

defense

Position Defense

The position defense is the simplest defensive strategy.

It simply involves trying to hold the current position in the market.

To do this, simply continue to invest in the current markets and

attempt to build brand name and customer loyalty.

Only negative aspect of this strategy is that it can make a target

for new entrants to the market.

Eg: Mercedes was using a position defense strategy until

Toyota

launched a frontal attack with its Lexus.

Flanking Defense

Defending the market share by entering new market and

diversification.

If you lose your market share in the existing market you can make

up for it in these new markets.

Negative aspect is that there are chances of losing main focus.

Pre-emptive Defense

This strategy involves attacking a competitor before you can

get attacked by it.

A company can launch a preemptive defense by several ways.

It can wage guerrilla action across the market- hitting one

competitor here, another there and keep every one off balance;

or

it can try to achieve grand market envelopment where it

launches

attacks on all market segments.

Counter-offensive defense

The counter-offensive defense is a retaliatory strategy.

When a competitor attacks your business, you strike back with your

own attack.

Eg: Toyota launched the Lexus to respond to Mercedes attack

Mobile Defense

Making constant changes in the business.

Involves new product introduction, entering new market or simply

making changes in existing products.

Business must be flexible enough to adapt new environment.

Eg: ITC (Indian Tobacco Company) have diversified their

strategies and come into food products (brand

“Asirbaad”) and FMCG(Fast Moving Consumer Goods (brand

“VIVEL” ) and 5 star Hospitality (brand “SONAR BANGLA”)

Contraction Defense

Least desirable defense because it involves retreating from markets.

This allows you to redeploy your resources into other areas.

Eg: India’s TATA Group sold its soaps and detergents business

units to Unilever in 1993

Why Defensive Strategies?

Retention of market share

Raising the barriers of entry

Long term contracts

Intact reputation

Market leadership

Offensive(attack) Strategy

An offensive strategy

provides a means for the new

business to hit the market strong

and establish a presence.

Improving own position by taking away market share of

competitors

Involves direct & indirect attacks

Retaliatory in nature

Eg: Samsung vs. Apple

Types of Attack Strategies

Attacker Defender

5.Guerilla

Attack

4. Bypass Attack

2. Flanking Attack

1. Frontal

Attack

3. Encirclement Attack

Frontal Attack

Attacking a competitor head-on

It attacks the opponents strengths rather than the weaknesses.

Attacking with similar products, price, quality, promotion & distribution

Highly risky unless attacker has a clear advantage

Eg: -The Cola wars between Pepsi and Coke starting from the early

1900s is an example of frontal attack strategies.

-McDonald’s McCafes which are coffee joints are seen as a

direct frontal attack on Starbucks.

Flank Attack

Attacking the competitor at the weak point or blind spot

Less risky when compared with frontal attack

Follows the path of least resistance where competitor is incapable

of defending

A flank attack can be directed along two strategic dimensions,

-geographical

(by attacking area where the opponent is underperforming)

-segmental

(by identifying market needs which are not fulfilled by the

leaders)

Encirclement Attack

Combination of frontal & flank attack

Attacker must have superior resources

Surrounding with various brands so as to make competitor

difficult to defend

Defender’s attention gets spread across various products making

him harder to defend

Bypass Attack

Also called leapfrog strategy

Overtake the competitors by introducing new technologies

Diversifying the products

This strategy offers three lines of approach.

-diversifying into unrelated products,

-diversifying into new geographical markets

-leapfrogging into new technologies

Guerilla Attack

Small hit-and-run attacks to destabilize the competitor

Attacks take several forms

It is common for the attack to take the form of price cuts and

promotional offers, calculated to gradually weaken the opponents

market power.

Why Offensive Strategies?

Destabilize the leader

Acquire market share

Sales Boost

Leapfrog the competitor

The “Cola War”

1915 Coca-Cola introduced its unique 6-1/2 ounce bottle that became

closely associated with the brand. The size and shape was just right to

fit the

hand, and this bottle and its association with Coca-Cola was a major

strength.

However, when Pepsi introduced a larger bottle for the same price as

the

smaller bottle of Coke, Coke did not have many options to respond.

Because

of the way the size and shape of the bottle fit the hand, it could not be

enlarged easily. Furthermore, the dispensing machines for Coke were

designed for nickels only, so the price could not easily be changed.

These weaknesses were a direct result of Coke's strength: the

challenger

should seek a weakness in the leader's strength.

The “beer war”

Schlitz was the top brand, but lost its lead to Budweiser in a close

battle.

Then Heineken entered the market as an import with a successful

flanking

attack, maintaining its import lead by following through with strong

advertising budgets. In the 1970's many brewers introduced light beers

as

line extensions.

Ries and Trout believe that the line extensions are unwise because the

extensions inadvertently flank a firm's own leading brand. This

happened to

Miller High Life after Miller Lite was introduced. Miller Lite was

successful,

but Miller High Life suffered as it lost its position in the mind of the

consumer as the working man's beer.

The “burger war”

McDonald's was the leader, and Burger King tried offensive maneuvers. The

moves

that were unsuccessful were those that extended the product line and that

copied

McDonald's. The campaigns that were successful differentiated Burger King

from

McDonald's. For example, “Have it your way” attacked a weakness in

McDonald's

consistent production line process that had the flip side of being inflexible. Even

more

successful were the advertisements emphasizing the fact that Burger King's

burgers

were flame-broiled while McDonald's were fried.

Wendy's successfully flanked McDonald's by targeting adults rather than

children,

offering adult-size portions and launching the highly successful “Where's the

beef?”

campaign.

Finally, White Castle was the low-end guerrilla who limited their geographic

The “computer war”

IBM became the market leader in the 1950's, and many other companies attempted to

emulate

IBM, but IBM continued to hold a majority market share. In the 1960's Digital Equipment

Corporation launched a successful flanking attack by introducing the PDP-8 minicomputer,

winning the position of small computers. According to Ries and Trout, IBM should have

blocked

this move by introducing their own minicomputer, but they failed to do so until 11 years

later.

With DEC owning the minicomputer market, Ries and Trout argue that DEC should have

been

the company to introduce the PC in the business market. DEC failed to do so, and IBM

launched

its PC in 1981 with virtually no competition in the business market. IBM effectively flanked

DEC

with a product in the small computer market, just as DEC had done to IBM 15 years

earlier.

Many companies introduced their own PC's but IBM pursued the defensive strategy that a

leader

should pursue by attacking itself, first with the improved PC-XT and then with the PC-AT.

While

IBM owned the business PC market, Apple took the lead in home PC's. IBM

“Do not assume the enemy will not come,

but be prepared for his coming…

Do not presume he will not attack,

but instead

make your own position

unassailable.”

“The Art of War”(Sun Tzu).

THANK YOU