Offensive Strategy

Offensive StrategyAn offensive strategy consists of a company’s actions directed against the market leaders to secure competitive advantage.

Competitive advantage may be achieved as a cost advantage or differentiation advantage or resource advantage. An offensive strategy must be creative so that competitors cannot easily thwart it.

Offensive strategies include a dramatic reduction of price, a highly creative and imaginative advertising campaign, or a uniquely designed new product that suddenly attracts customers substantially.

A successful offensive strategy yields a competitive advantage over a relatively long period of time.

According to Thompson and Strickland, three distinct periods are involved: (i) build-up period; (ii) benefit period; and (iii) erosion period.

If the company has in its possession all the resources for immediate deployment for the implementation of offensive moves, the buildup period can be short.

However, the buildup period may be longer if necessary resources are not readily available, customer acceptance of the new product would take some time or technology development is likely to require a longer time.

The benefit period is the time-span during which the company enjoys the benefits of competitive advantage. Depending on how much time it takes the competitors to wage counter-offensive moves, the benefit period may be short or long. The erosion period starts when the competitors undertake counter­offensive moves. The earlier and stronger the counter-attack, the early is the beginning of the erosion of competitive advantage:

Companies use offensive strategies to create competitive advantage. They adopt such strategies to achieve a cost advantage or differentiation advantage or resource advantage.

Offensive strategy can be undertaken by dramatically price-cut or an imaginative and unbelievably attractive advertising campaign or a smash-hit new product.

Preconditions for Successful Offensive Strategy

I n order to be successful with offensive strategies a company must ensure that it has been able to;

  1. Win customer acceptance of its product with a reasonably short period of time (if it is not a highly innovative or first-time-in-the-world product).
  2. Accumulate requisite resources arid capabilities for deployment;
  3. Discourage the competitors through offensive actions to launch counter-offensives;
  4. Come up with follow-on offensive and defensive moves one after another to protect its malposition.

A company should take note that the ‘benefit period’ of competitive advantage may not last long.

At a certain point in time, the competitors would spot the strategic moves and begin counter­response.

For example, if the offensive strategy leads to a differentiation advantage, competitors may imitate the differentiation attribute quickly.

Resourceful competitors are likely to launch counterattack through undertaking initiatives do overcome inch market disadvantages. As a result, the company’s competitive advantage will start eroding.

Offensive strategies are successfully launched if they are tied to the company’s core competencies or resource strengths and competitive capabilities.

Good candidates for strategic offensive attacks are market leaders having some ‘market weaknesses’ such as outdated technology, unhappy customers, inferior product line, runner-up firms having some specific competitive disadvantages, and small local companies.

The market challengers with offensive moves may come from new entrants in the industry as well as from resourceful established companies that intend to improve their market position.

More "Mergers & Acquisitions: Meaning, Process, Example, Advantages, Disadvantages" Posts /
Related Posts ⁄