A defensive strategy consists of a company’s actions directed for protecting its competitive advantage. A company pursues defensive strategies to protect competitive advantage through protecting existing market share.
However, they can hardly create any competitive advantage.
But they fortify the competitive position of the company. They also protect the resources and capabilities of the company.
Furthermore, they sustain the company’s competitive position. Companies usually follow defensive strategies primarily to lower the risk of being attacked’ and influence the competitors to aim their efforts at other competitors.
A company’s defensive strategies may include;
- Offering dealers/distributors special discount or better financing terms just to discourage them not to carry competitors products.
- Entering into an agreement (or strategic alliance) with dealers/distributors, to work as the company’s exclusive dealers/distributors.
- * Extending the warranty period or offering free training to the customers to discourage them from buying competitors’ products.
- Making sustainable arrangement for delivery of spare parts or after-sales service faster than the competitors.
- Making an early announcement about launching a new product so that potential customers, postpone buying from competitors.
- Introducing new features of products or new version or new model and enter into niche markets, which would create obstacles to competitors to enter the niches.