Offensive Competitive Strategy Definition
An offensive competitive strategy is a form of corporate strategy that involves active and consistent efforts to make and implement changes within the sector. Firms who follow this strategy are the ones who make huge investments in the Research and Development (R&D) and technology-oriented areas for getting a competitive edge over others in the industry. These firms can directly challenge its rivals either by eliminating new or ineffective markets, or by competing with them neck-to-neck. On the other hand, defensive competitive strategies work with a view to offset offensive competitive strategies.
A Little More on What is an Offensive Competitive Strategy
An offensive competitive strategy is a result of either one or a blend of several techniques and strategies. Firms can also consider using totally unique strategies in different market locations. For instance, a soft drink firm will react differently to a competing firm in its mature domestic market and to a budding competitor in an entirely new market. This difference in reaction not only results in framing many complicated offensive strategies, but also defensive strategies formed as a result of offensive attempts.
One of the most extreme offensive competitive strategies takes place when firms are ready to acquire other companies for killing competition or enhancing its growth. Firms opting for offensive strategies bear more risk as compared to defensive strategies because there are more chances that they will either be completely invested or leveraged. And this can be a matter of worry during market slowdowns. A very common feature that offensive competitive strategies has is they are too pricey.
Types of Offensive Competitive Strategy
There are many types of offensive competitive strategies, and each of them has its own benefits and drawbacks.
- End run strategy: Instead of giving weightage to the direct competition, an end run strategy focuses on exploiting unexplored markets, niches, demographic communities, or locations.
- Preemptive strategy: Preemptive strategy is used when a firm benefits itself by being the first for exploiting a specific market. This strategy, also referred to as first-mover strategy, tends to give the firm a solid hold over the market.
- Direct attack strategy: Direct attack strategy, being more aggressive than preemptive and end run strategies, compares competitors’ products and services, sets competitive prices, and can directly challenge competitors for introducing new attributes in a given product or service. This strategy can also use previous strategies in marketing campaigns with a view to spread the word among its customers.
- Acquisition strategy: Acquisition strategy tends to eliminate competition by buying or acquiring the firm. The most affluent or effectively-capitalized rivals can take benefit from this strategy. By removing competition, it gives the opportunity to the acquiring firm to tap new market, customer base, and corporate intelligence. The use of this strategy involves a lot of money, and that’s why it needs to be smartly used, keeping in mind the antitrust rules at corporate level or the domestic competition laws.
A few examples of defensive strategies are:
- A pricing competition where a firm emphasizes either on a price-match or ruling out a competitor based on price.
- Including more product features for staying one step ahead of rivals.
- Providing better services or longer warranty periods.
- Using more promotional and marketing tools to make people aware of a specific product or service.
- Imposing restriction on competitor’s access by collaborating with retailers or suppliers.
- Hitting back smartly at a competitor’s activity
References for “Offensive Competitive Strategy”
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