After analyzing the competitive data, it's time to take action.

We can select between defensive and offensive actions,

based on our situation.
In this lecture, we cover both scenarios,
starting with defensive actions.
In defensive actions, we defend ourselves
against competitive threats.
We cover defenses against common competitive attacks here.
Starting at the top, bypass attacks
are those where competitors develop products and services
that bypass or ignore the current thinking of the market.
For example, Nintendo faced Microsoft and Sony
in video game console competition.
Instead of trying to out-graphic the graphics-intensive
competition, Nintendo bypassed the competition
with this focus on the user interface, which we now
know as Wii, as well as the Wii controller.
To defend against a bypass attack,
companies should expand market opportunities into new areas.
In the second type of attack, called encirclement,
companies attack competitors by encircling them
with superior forces and assets.
For example, Bank of America employed encirclement strategy
to attack competitors by emphasizing
its vast number of automated teller machines, or ATMs.
In flank attacks, competitors attack weak areas
of companies in the market.
For example, HP known for its server product line,
could execute a flank attack against networking hardware
company Cisco.
To cover flank attacks, companies
should address their weaknesses knowing that competitors
will exploit them.
In frontal attacks, companies meet competitors head on,
fighting against their primary strength.
And that's exactly what happened when desktop software giant
Microsoft competed against Google by launching its Bing
search engine.
To counter frontal attacks, companies
should consider diversification to avoid risk of exposure
to any one area.
In guerrilla attacks, competitors strike at random.
For example, some smaller companies
attack competitors by posting misleading comments
on the competitors' social media channels.
To defend against guerrilla attacks,
companies must constantly be on their guard,
vigilantly monitoring operations to stop
guerrilla attacks before they get a chance to do great harm.

We can predict what type of attacks

our competitors will make by examining where their core
competencies lie.
The chart in the slide shows some typical examples.
If companies have great expertise
in development, finance, or marketing and sales,
as Nintendo did, they are fairly likely to execute a bypass
attack.
If companies have competencies in finance and operations,
such as those of Bank of America,
we can predict an encirclement attack will occur.
If companies are strong in development and marketing,
they'll likely use them as part of flank attack.
When companies are really strong in finance and sales,
they have the ability to execute a frontal attack.
And when companies have strength in human resources,
whether they have hundreds or thousands of personnel
at their disposal, we can predict a guerrilla attack.

We're not limited to defensive positions only.

We can also take offensive positions.
In general, the most common ways are
to enter a new market segment as automaker Skoda did,
to execute a new go-to-market approach as Lenovo did
with different channels for different segments,
or to create differentiating functionality as hotel operator
Westin did with its Heavenly line of mattresses, pillows,
and bed sheets.
Go-to-market strategies can be a powerful method
of taking offensive action.
We show several examples on this slide.
For example, we can bundle different products and services
together to tailor our offerings to different segments
as automaker General Motors did.
We can offer our products and services
through multiple distribution channels
as Nike does, selling its products virtually everywhere.
We can structure our products and services
to permit interval ownership to reduce overall ownership
costs as flight operator NetJets does with its business jets.
We can also offer leases instead of demanding payment upfront
as Ford does with its leasing plans.
Some cellular service providers offer
prepaid plans, such as Virgin Mobile,
allowing customers lower prices by having customers pay
before the services are used.
Last but not least, we can offer rental of our products
and lieu of outright ownership as apparel renting company Rent
the Runway does with its haute couture line of clothing.

In this module, we identified several sources

of competitive information.
We recommended that marketers test out each source
to find their own set of go-to sources
for competitive intelligence.
We also showed how one can apply that competitive intelligence
toward a competitor by understanding the market better
using PESTLE, Porter, and other analyses.
We closed the module by showing how
to decide on specific defensive or offensive competitive
actions.