Competitive Strategies: Offensive, Defensive, and Quick Response

Posted on Feb 19, 2025 in Business Administration and Management (BAM)

Defensive Strategies

Reducing the risk of an attack by a competitor to the company. It increases the competitive advantage, strengthens, and preserves it.

Ways to Protect Competitive Advantage:

  1. Impede the actions of attackers by:
    1. Expanding product line and occupation of gaps.
    2. Signing exclusive agreements with suppliers or reduced price distributors.
    3. Maintaining similar products to the competition, etc.
  2. Counteroffensives against competitor launches an attack: In order to deter competitors from carrying out their threats, and choose other options that are less damaging to our company. Public notice in advance of possible actions such as advertising and new brands, technological innovations, image enhancement, etc.

Offensive Strategies

Getting a competitive advantage by acting aggressively against rivals.

Types:

  1. Attack the strengths of the rival: attack with a product as good or better than the competition, and a lower price or additional services. Cancel the competitive advantage of rival acting on their level.
  2. Attack the weaknesses of the competitors:
    1. Act in geographical areas where the opponent is weakest.
    2. Act in weak segments of the competition.
    3. Image campaign, etc.

Quick Response Strategies

(Time is the competitive advantage), purporting to act faster than their competitors with new products or accelerating decisions.

Forms of Quick Response:

  • Development of new products, reducing the time of appearance, and improvement of existing ones.
  • Realization of products to the building as the needs or their immediate delivery.
  • Response to customer demands quickly and reinforcement of these competitive advantages.

Disadvantages:

  • Not suitable for different types of companies (HR technology systems and specific). It’s a bad strategy in companies unprepared.
  • Time is not as important in all markets or for all customers.
  • It may lead to stress among the staff by the need to make decisions quickly.

Sources of Competitive Advantages (Grant, 1996)

  1. Economies of scale: an increase in the scale of production leads to a decrease in unit costs.
  2. Effect experience: cost reductions by the establishment and refinement of organizational routines of the company.
  3. Techniques of production: cost reductions for the development of technological innovations. The cost leader requires heavy investments in innovation.
  4. Product design: cost reductions by saving material and process automation.
  5. Cost of inputs:
    1. Localization: cost savings by proximity to the sources.
    2. Favorable conditions access to raw materials or other key supplies, financial sources, contracts for services / supplies, etc.
  6. Relationships with suppliers and customers: cooperation with them allows coordination and reduced transaction cost.
  7. Adjustment productive capacity to the actual demand (Under-utilization of resources or excess surplus).
  8. Efficiency-operating: cost differences between firms may come from a residual or lack organizational inefficiency (X-inefficiency.) It reflects the company’s own inefficiency in their management.

It is sometimes necessary to use tools such as value chain to develop competitive advantages, as UENs may be too large. Cost leadership can come from any activity of the value chain.

Competitive Strategy (Porter, 1982)

Launch offensive or defensive actions to create a defensible position in an industry, to cope successfully with the five forces of competition and get superior performance investment company.

Competitive Advantage

Any property of the company that the difference in another.

Requirements to be met by a Competitive Advantage:

  • Engage a success factor in the market.
  • Provide a real difference.
  • Being sustainable over time.

In short, a competitive advantage is a unique way of doing things, a fortress against competitors.

Porter, 1982 The intersection of these two variables produces the three business strategies set forth in the chart: cost leadership, product differentiation and segmentation markets. Although the latter is not in itself a strategy, but it would be a cost leadership strategy or differentiation, but applied to a particular market segment.