Competitive advantage in costs, resources, or differentiation is almost always the result of successful offensive strategic actions. Defensive strategies, by contrast, are used to protect and maintain a competitive advantage and rarely to create one. How long it will take to create a competitive advantage through a successful offensive strategy depends on the competitive environment in the industry [38 pp.23-24].
An offensive strategy of a company can provoke a response from competitors with sufficient competence and resources: do not hope that they will give up their market share without fighting.
A successful offensive strategy provides the company with a period of success, the duration of which depends on how long it will take opponents to take retaliatory actions and reduce the gap that has arisen. A long period of success allows the company to make a profit above the industry average for a long time and recoup the investments made in creating advantages.
After competitors launch a counteroffensive, a period of loss of competitive advantage begins. Any competitive advantage that a company has will sooner or later be lost if the opponent has the necessary experience, resources and is not going to leave the market without a fight.
To maintain the achieved position, the company takes either new offensive or defensive measures. To maintain a competitive advantage, a company must significantly outpace rivals, combine offensive and defensive actions, strengthen its market position and maintain consumer commitment.
There are six types of offensive strategy.
[37 p.401-406]:
Reach and surpass a competitor. In order not to lag behind competitors, the company can direct its efforts to neutralize or achieve superiority over them. Neutralization means nullifying the competitive advantage of a strong opponent, achieving superiority – an attempt to take an attractive market share from a competitor, despite his more advantageous position and advantage in resources. One of the most effective offensive strategies is to offer goods of the same quality, but at a lower price. Other options for an offensive strategy: the use of a breakthrough in technology (causes obsolescence of the competitor’s product), giving the product new consumer properties (to attract competitor customers), an advertising campaign with elements of anti-advertising (in Europe and the CIS countries is prohibited. – Editor’s note), the construction of new production facilities in the immediate vicinity of the competitor’s factories, the expansion of the range of goods (to create analogues of each competitor’s product), the creation of new production facilities in the immediate vicinity of the competitor’s factories, the expansion of the range of goods (to create analogues of each competitor’s product), the creation of analogues of each competitor’s product. a customer service system that a competitor does not have. Exploit a competitor’s weaknesses. The company is trying to win a victory in the market by taking advantage of the weaknesses of competitors, using various variants of this strategy: Attracting consumers of those competitors whose products are not of high quality, diverse properties and economy of use; Organization of special sales per customers of those competitors who do not provide quality service; Attack on competitors with a weak brand; Activation in geographical regions where the competitor has a small market share or no competitive advantages; Work with those segments that the opponent does not want or cannot serve.
Exploiting a competitor’s weaknesses is more promising than trying to catch up and overtake them, especially if the competitor’s weakness makes them vulnerable and allows them to be caught off guard.
Simultaneously advance on several fronts. A large-scale offensive with a wide range of different measures (price reduction, increased advertising, launch of new products on the market, free distribution of samples, coupons, discounts, etc.) in a vast territory knocks the opponent out of the rut, dissipates attention and forces to defend himself in several directions at once. The success of a large-scale offensive largely depends on the presence of a well-known brand and reputation in the attacker, capable of ensuring wide distribution of goods and advertising contact with consumers. Then the company will be able to attract competitors’ customers and increase its market share. Capture unoccupied spaces. This strategy avoids an open challenge to the opponent, i.e. aggressive price reductions, increased advertising or costly attempts to surpass the competitor in the differentiation of goods. Instead, the attacker captures geographical areas where the closest competitors do not work or their presence is insignificant. Here are a few examples of this strategy: Offering new types of products that change the situation on the market and the conditions of competition. Introduced to the market in 1994, the Netscape Navigator browser immediately made Netscape a leader in browser development (previously this sector of the market was ignored) and put Microsoft and other companies in the position of catching up; Creation of strong positions in geographical regions where the closest competitors are poorly represented or not at all represented. Wanting to take a leading position in the global market of PC and Internet products, some companies are taking steps to capture the markets of Latin America and Asia to ensure a more favorable position in the future; Creation of new segments due to the differentiation of goods to more fully meet the needs of certain categories of consumers. This strategy has been successfully implemented by model manufacturers Lexus and BMW, creating a market for sports mini-cars; Reorientation to new generation technologies and displacement of existing goods, production processes and/or services. Some telecommunications companies are trying to oust regional telephone firms from the Internet access market by offering new models of cable modems. Guerrilla warfare. This strategy is more suitable for small companies that lack the resources and market knowledge to attack industry leaders on a large-scale attack. “Guerrillas” use the principle of “blow-withdrawal”, acting where and when you can use the situation to your advantage, take a competitor by surprise or at a good time lure other people’s customers. The set of guerrilla methods includes sudden raids on enemy territory with an unexpected sharp decline in prices, unexpected bursts of marketing activity, conducting special campaigns to distract consumers from competitors facing internal problems. The same category includes actions such as reducing delivery times if the delivery time of competitors is too long; improving the quality of goods, when a competitor has difficulties with monitoring the quality of products; expansion of the volume of technical advice in the sale of goods, if it is difficult for consumers to make a choice due to the diversity of competitors’ models. Preemptive strikes. Anticipatory actions are taken to protect an advantageous position in the market and are distinguished by the fact that, if successfully carried out, they do not leave competitors a chance to copy the attacker’s actions profitably for themselves. An irreproducible competitive advantage goes to whoever comes first.
The company should analyze against which of the rivals and what active competitive actions should be taken. Four types of companies represent optimal targets for attack [37 p.400]:
Market leaders. It is possible and necessary to attack the leader in terms of market size and share if it does not cope with its volume of work. The vulnerability of the leader is evidenced by customer dissatisfaction, the range of goods (the same as that of competitors and even already), a weak competitive strategy, a stubborn reluctance to part with outdated technology that once provided the leader with his current position, outdated technologies and equipment, a passion for diversification into other industries, and a decrease in profits. An attack brings success if a company, by changing its value chain, achieves a competitive advantage in terms of costs or through differentiation [42 p.518]; Closest followers. Attacking them is advisable if the attacker has powerful resources in areas where followers clearly do not have enough resources; Companies on the verge of leaving the market. The attack speeds up their departure; Small local and regional companies. Usually their experience and capabilities are limited, so it is possible to lure their largest and best customers, especially if they are fast-growing companies that have a tight regional framework, and local companies are not able to meet their growing demands.
An offensive strategy should be based on the strengths of the company, ideally on a competitive advantage.