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Defensive Strategy

Defensive strategy is a marketing tool used by companies to retain customers and protect market share from competitors. The objectives are to protect the brand, strengthen current market positions, and lessen the risk of attacks. There are several defensive strategy options, including raising barriers to entry to discourage new competitors, lowering prices to decrease incentives for attacks, and retaliating against aggressive moves by rivals. Preemptive strategy aims to gain sustainable advantages by significantly improving solutions before competitors can act. It is one of the most powerful but also difficult strategies due to the challenge of predicting competitors' actions.

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Lyra Moreno
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204 views2 pages

Defensive Strategy

Defensive strategy is a marketing tool used by companies to retain customers and protect market share from competitors. The objectives are to protect the brand, strengthen current market positions, and lessen the risk of attacks. There are several defensive strategy options, including raising barriers to entry to discourage new competitors, lowering prices to decrease incentives for attacks, and retaliating against aggressive moves by rivals. Preemptive strategy aims to gain sustainable advantages by significantly improving solutions before competitors can act. It is one of the most powerful but also difficult strategies due to the challenge of predicting competitors' actions.

Uploaded by

Lyra Moreno
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Defensive Strategy - is a marketing tool that helps companies to retain

valuable customers that can be  taken away by competitors.

In other words, it is a battleground where you fight and protect your market
share and by keeping your customers happy and stabilizing your market.

Objectives of Defensive Strategy - to protect its brand, and strengthen the


firm’s  present positions and lessens the risk of being attack and help sustain
any competitive  advantage.

Defensive Strategy Options:

A. Raise Structural Barriers- Firms may raise barriers to entry, making it more 
difficult for rivals to enter the market and increase competition. Aimed at 
defending an existing market by discouraging new entrants.

Example:
Coca-cola offers unprofitable non-carbonated beverages to block competitors
entry point in non- carbonated products

B. Lower the Inducement for Attack- Defender’s willingness to accept lower 


profits to decrease interest in it’s markets.

Example:
Southwest Airlines can deliberately keep prices low and continuously invest in
cost-reducing measures. With prices kept low, there is little profit incentive for
a new entrant.

C. Increased Expected Retaliation- defenders may retaliate against


aggressive  moves made by rivals in a number of ways.

Example:
When clorox company challenged P&G in the detergent market with clorox
super detergent, P&G retaliated by test marketing its liquid bleach of the time,
lemon fresh comet, in an attempt to scare clorox into retreating from detergent
market.

PREEMTIVE STRATEGY- are intended to gain sustainable advantages by 


significant improving the solution, system and structures.

Preemptive strategy is acting against a competitor before the competitor


makes its move.

This is one of the most powerful strategy as to gain competitive advantage


over the competitor.

But this is also one of the most difficult strategy as competitors steps are
difficult to guess.
A. Acquire firm which has exclusive control of a valuable technology
B. Secure exclusive/dominant access to best distributors
C. Tip up best or most source of essential raw materials
D. Secure best geographic locations
E. Obtain business of prestigious customers
F. Expand capacity ahead of demand in hopes of discouraging rivals
G. Build an image buyer’s minds that is unique or hard to copy

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