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Module 4 Offensive and Defensive Strategies
Module 4 Offensive and Defensive Strategies
Module 4 Offensive and Defensive Strategies
• 1. Frontal attack – This is the direct, head on attack meeting competitors with the
same product line, price, promotion, etc. Because attack is on the enemy’s strengths
rather than weakness it is considered the most risky and least advised strategy.
• 3. Encirclement attack – Multi pronged attack aimed at diluting the defenders ability
to retaliate in strength. The attacker stands ready to block the competitor no matter
which way he turns the product market. Product proliferation supplying different types
of the same product to the market. Market encirclement consists of expanding the
products into all segments and distribution channels.
• 4. Bypass attack – This is the most indirect form of competitive strategy as it avoids
confrontation by moving into new and as yet uncontested fields. Three type of bypass
are possible; develop new products, diversify into unrelated products or diversify into
new geographical markets.
• 5. Guerilla warfare – Less ambitious in scope, this involves making small attacks in
different locations whilst remaining mobile. Such attacks take several forms. The aim
is to destabilize the competitor by small attacks.
Defensive warfare
• 1. Position defence – static defence of a current position, retaining current product
markets by consolidating resources within existing areas. Exclusive reliance on a
position defence effectively means that a business is a sitting target for competition.
• 6. Strategic withdrawal.
Strategic withdrawal
• 6. Strategic withdrawal.
• Withdrawal
• It might be the right decision to cease producing a product and/ or to pull out of a market
completely. This is a hard decision for managers to take if they have invested or if the decision
involves redundancies.
• Exit barriers make this difficult.a. Cost barriers include redundancy costs, the difficulty of selling
assets.
b. Managers might fail to grasp the principles of opportunity costing
c. Political barriers includes government attitudes
d. Marketing considerations may delay withdrawal
e. Psychology – managers hate to admit failure
• Reasons for exita. The company’s business may be buying firms turning them around and selling
them at a profit.
b. Resource limitations mean that less profitable businesses have to be abandoned. A business
might be sold to a competitor or occasionally to management.
c. A company may be forced to close because of insolvency.
d. Change of competitive strategy.
e. Decline in attractiveness of the market.
f. Funds can earn more elsewhere.
Co evolving
• The promise of synergy is the prime rationale for the existence of the multibusiness
corporation. Yet for most corporations, the "1-plus-1-equals-3" arithmetic of cross-
business synergies doesn't add up.
• Coevolving companies reward business units for individual performance, not for
collaboration. So collaboration occurs only when two business-unit managers both
believe that a link makes sense for their respective businesses, not because
collaboration per se is useful. Managers in coevolving companies also need to
recognize the importance of business systems that support the process: frequent
data-focused meetings among business-unit leaders.
Organisational Agility
• The
• Organisational Agility (OA) Assessment questionnaire generates scores for the five following
• organizational dimensions on a scale ranging from industrial era types of organization to
• organic, self-organising forms of organisation:
• Alignment - Organizational commitment to a shared vision, values, and goals
• Adaptability - Employees’ freedom and accountability to take appropriate action
• Collaboration - Ability and willingness to cooperate to achieve win-win outcomes
• Innovation - Ability to generate and sustain a high-level of innovation
• Vitality - Level of energy and commitment that employees bring to their work
• For each dimension, the organization is assessed as being at one of four developmental levels:
• 1. Bureaucratic - hierarchical structure; focus on rules, procedures and financial numbers
• 2. Managerial - focus still on management systems but with a paternalistic culture and HR
• practices
• 3. Agile - efforts made to gain employee commitment to inspiring corporate vision and to tap
• employee creativity
• 4. Dynamic - practically no bureaucracy. Authority derives from know-how. Risk-taking,
• experimentation, and innovation are the norm. Information flows freely and people
• collaborate enthusiastically. Responses to marketplace changes occur almost
• immediately. Employees tend to be excited, energized, and totally committed to creating
• something that they care about.
Amity Business School
Strategy as Simple Rules
Strategic steps Identify market,locate Establish vision ,build resources Jump into confusion,sieze
position,Fortify and ,leverage markets opportunities, finish strong
defend
Strategic questions Where should we be? What should we be ? Hoe should we proceed ?
Sources of advantage Unique, value position Unique,valuable imitible Key processes and unique
,integrate activity system resources simple rules
Works best in Slow chancing markets Moderately changing markets Rapidly changing amigious
Well structured markets
Risk Difficult to alter position Company will be slow to Manager too tentative
reallocate ersources
Performance Goal Profitibility Long term dominance Growth
Strategy as Simple Rules
Simple rules, which grow out of experience,
fall into five broad categories:
• how-to rules,
• boundary conditions,
• priority rules,
• timing rules,
• and exit rules.
Simple rules summarized
Type Purpose Remarks
How to Rule Key features of how the process is •R&D must rotate through customer service
executed • every quesrion must be answered on first call
•Staff nust consist of technical gurus
Boundary rules Focus managers –opportunities Acquire companies over 75% engineers and having 75
which can pursed & those outside employees
rules
Priority rules Help managers to RANK Allot manufacturing capacity based on Products gross
opportunities margin
Timing rules Synchronize managers opportunity Intel,s new product time less than 18 months timed at
with emerging opportunities in the decline point
company
Exit rules Decide when to pull mout of If a key member chooses to walk out
yesterday,s oppoutunity
Broad Do not confuse guiding principles with rules example encourse innovation but not assess a new
venture partner/
Vague All investments must be undervalued???--- a simple screen will help in such a task.
Mindless Rules may destroy rather than create value… reverse engineer them and thow out those not
relevant
Conclusion
Companies with simple-rules strategies must follow
the rules religiously and avoid the temptation to
change them too frequently.
A consistent strategy helps managers sort through
opportunities and gain short-term advantage by
exploiting the attractive ones.
Patching