what, according to posen, are the advantages of a defensive strategy?

Organizations need to prefer competitive strategies for their existence and for maintaining their position in marketplace. When it comes to adopting a competitive strategy, organizations need to consider what factors separate them from their competitors. Enquiry firm Dun & Bradstreet suggests evaluating the competitive advantages in business procedure, expertise, uniqueness or relationships an organization enjoys with its suppliers, customers and marketing channels earlier adopting whatsoever of the strategies.

Competitive strategies can exist divided into offensive and the defensive strategies. Companies pursuing offensive strategies direct target competitors from which they want to capture market share. In dissimilarity, defensive strategies are used to discourage or turn back an offensive strategy on the part of the competitor.

Offensive strategy: An offensive competitive strategy is a type of corporate strategy that consists of actively trying to pursue changes within the industry. Companies that become on the offensive generally invest heavily in research and development (R&D) and technology in an effort to stay ahead of the competition. Offensive strategies straight target competitors from which they desire to capture market share. Some of the offensive strategies are as follows:

Frontal Attack: A frontal assault is attacking a competitor ahead on by producing similar products with similar quality and price; information technology is highly risky unless the aggressor has a clear advantage. The about prominent example is war between Pepsi & Coca Cola. Both are cash rich. Since ages they employ frontal attack strategy confronting each other. Both are market leaders in beverage market. When Pepsi introduced diet Pepsi, Coke introduced diet Coke.

Flank Attack: The Flank attack is the marketing strategy adopted by the challenger firm and is intended to attack the weak points or blind spots of the competitor, particularly when competitor enjoys leadership position in market. LG outflanked the other colored TV producers in India, by launching a rural-specific color Tv "Sampoorna", thereby becoming the get-go 1 to tap the rural areas. LG demonstrated that Rural Customers are not just price conscious, but are actually value witting and are ready to pay reasonable premium if system deliver solution to their long-standing trouble with their Sampoorna CTV.

Encirclement Set on: This form of marketplace challenger strategy is used when the competitor attacks another on the ground of strengths too as weaknesses and does not leave whatever stone unturned to overthrow the competition. The electric current east-commerce scenario is the best example of the encirclement assail where the E-commerce companies are ready to go negative in their margins to beat out a competitor on turnover footing. They want to come up on top and gain maximum customers by hook or cheat.

Bypass Set on: This type of strategy is institute in a business firm which has the brains to innovate. And when it innovates, it bypasses the complete competition and creates a segment of its own. Off course, other competitors soon follow. Only the attack is very useful in the long term to create make reputation and gain customers. Sony Corp. co-founder Masaru Ibuka who liked to listen to music during his frequent business trips was tired of carrying his bulky TC-D5 cassette deck around. He asked his designers to create something smaller. They came back with the headphone-equipped TPS-L2. It looked sleek and hit, which they showed to chairman Akio Morita. "Try this," Ibuka said. "Don't you think a stereo cassette player that yous can heed to while walking around is a good idea?" On July one, 1979, the sleek little device hitting the market, priced at $150. Sony called it the 'Soundabout', and then changed the proper noun to the Walkman. Walkman became such a craze, consumers wound up ownership 400 million of them. Today, with one-half of Smartphone owners using their devices to mind to music, it'south easy to forget how radically the Walkman changed things. Another example of Featherbed assault is I phone and I Pod.

Guerrilla marketing: Making small only useful changes, which repeatedly puts a brand in the forefront, and slowly but surely makes it a huge proper name in the market, is the crux of Guerrilla marketing. A pocket-sized brand, which wants to take on huge competitors, which first becomes famous in a local market, then volition introduce price discounts and merchandise discounts. Guerrilla marketing campaigns are highly targeted in terms of location where they are launched.

Guerilla marketing is born a way of marketing which allows brand differentiation concerning the competition. In fact, right guerrilla marketing actions are usually, activities remembered past the people who have witnessed information technology. Ane of the usual places to create guerrilla marketing actions is the zebra crossings. The lines painted on the ground requite you a lot to play with if you have the necessary inventiveness. For example, McDonald'due south simulates that the lines are French fries coming out of the typical package of the hamburger brand. What is interesting about this action is that, also of being function of a real zebra crossing, which still has the same function, it has achieved that the paradigm is one of the visitor's products. And likewise, with the image type of the M in the sight of all pedestrians.

Defensive strategies: Defensive strategy is defined as a marketing tool that helps companies to retain valuable customers that can exist taken away by competitors. When rivalry exists, each company must protect its brand, growth expectations, and profitability to maintain a competitive advantage and acceptable reputation amongst other brands. To reduce the gamble of financial loss, firms strive to take their competition away from the industry. Following are some regularly used defensive strategies by firms:

Retrenchment: It consists of the reduction of the expenses by employees' layoffs to increment profitability. This forces employees to industry the company'south products with limited resources or with cheaper raw material. For example, HSBC lay off 200 employees in Pune recently. In 2009, Starbucks had airtight down 600 units in the United States and 61 in Commonwealth of australia; they lay off employees in thousands. Another example is Tech Mahindra and IBM in India went on retrenchment drive in past two years.

Divest: When the company sells some of its assets to achieve a certain objective, such as college returns or reduces debts. Unremarkably, companies that implement this strategy want to invest that capital letter to create higher time to come revenue. This strategy has helped some organizations to get more focused on their core business organization and improve their performance in the market. Information technology is common that enterprises sell their poor avails or divisions.

For example, in 2009 Ailing Lehman Brothers Holdings divested its venture-capital letter division as the house sol In December 2009, L&T sold its 17% stake in Bangalore International Airport Ltd  (Bial) to GVK Power and Infrastructure Ltd. (GVKPIL) for ₹ 686 crore; part of the assets were sold to generate plenty cash to pay their debts. L&T wants to sell its property in the Dhamra Port in Odisha to Adani Ports.

Liquidation: Liquidation is the hardest strategy to perform by a company because information technology ways that it went into defalcation. This tin can be caused because the functioning and administration of the house was not appropriate or the managers were not trained enough to control the activities of the firm. In this example, the unique solution is to sell all the company's assets in pocket-sized parts to shareholders, stakeholders or other companies that are economically solvent. Although this is a tough decision, it is amend to terminate the operational anarchy instead of continuing losing more money. The National Company Law Tribunal (NCLT) has ordered liquidation of two Rotomac group companies' Global and Exports companies whose promoter Vikram Kothari is accused of being involved in a cyberbanking fraud. The order was pronounced at the NCLT's Allahabad chapter in 2016. Just, as of October 1^st 2019, there are no buyers for junk priced Rotomac.

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Vidya Hattangadi

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