OFFENSIVE AND DEFENSIVE STRATEGIES

PRESENTED BY:ROHIT GUPTA (13)VRUSHAL JADHAV (15)RAKSHA KHETAN (23)LATIKA AGRAWAL (02)SAQIB AZAM QADRI (42)MUKUL SOHONI (52)

WHAT IS COMPETITIVE ADVANTAGE?

… a basis for the firm’s long term success? … a basis for value creation?

SUSTAINABLE COMPETITIVE ADVANTAGE 

A good strategist seeks not only to “win the hill, but hold on to it.”  Subash Jain

Sustaining competitive advantage requires erecting barriers against the competition

Aakers suggested looking at the following: How you compete Basis of competition Where you compete Whom you are competing against

 

EXAMPLES OF SCA 

For many years, Singapore Airlines were riding on its SCA of having the best in-flight service

As more airlines improved their service and  narrowed the gap, SIA sought other competitive advantages among which are The most modern fleet Outstanding Service on the Ground A super entertainment system in its cabins Comfort in its First Class cabins at an unparallel

level

MARKETING WARFARE STRATEGIES

Offensive Marketing warfare strategies

Defensive Marketing warfare strategies

Guerrilla Marketing warfare strategies

OFFENSIVE STRATEGY

DEFINITION

Offensive marketing warfare strategies are designed to obtain an objective, usually market share, from a target competitor.

Choosing rivals to attack:

OFFENSIVE STRATEGY

According to Sun Tzu “ There are two strategies Overt offensive strategy

to knock out a business rival so as to take-over his company

To knock out a competing product so as to take-over it’s market share.

Covert offensive strategy

keep as low a profile as possible while making offensive moves”

TYPES OF OFFENSIVE STRATEGY

FRONTAL ATTACK FLANKING ATTACK ENCIRCLEMENT BYPASS GUERILLA WARFARE

FRONTAL ATTACK

It occurs when the company takes all their forces and face the opponent directly. e.g. IBM

Types of frontal attack: 1) pure frontal attack 2)limited frontal 3) price based frontal attack 4) research and design attack

FLANKING ATTACK

It occurs when the company focuses its forces on the weaker sides of its competitors. E.g Xerox and Canon.

Types of flanking attack: 1) geographical e.g coca-cola 2) segmented e.g japanese in us

markets

ENCIRCLEMENT

The basic idea of encirclement is to force the competitor to protect their product from all sides. E.g Smirnoff Vodka

Types of encirclement: 1)Product e.g japanese in us market 2) market e.g Seiko

BYPASS STRATEGY

A bypass attack wins the battle through attacking areas not defended. E.g. Colgate-Palmolive

Types of bypass: 1)develop new products 2)diversify into unrelated products e.g

Sony

GUERILLA WARFARE

Involves winning small victories that can over time amount to a large gain in market share.

Example : IBM won law suit against Hitachi

Implemented by company who are smaller market position

CASE STUDY (OFFENSIVE):BMW

COMPANY PROFILE

BMW (Bayerische Motoron worke Aktiengesellschaft) was founded in 1916

The company produces and markets a varied range of higher end sporty cars, motorcycles and passenger cars

Operates in 13 countires

BMW’S PRODUCT OFFENSIVE STRATEGY: In early 2000s, BMW focused on

strengthening its position as market leader in premium segment

Product offensive strategy – new launches every 3 months

Increased R&D expenditure by 53%

• Some of new launches were:1. Mini One2. Mini Cooper3. New BMW 3 series compact4. New BMW 7 series

• By 2002, the company overtook Mercedes and stood 2nd in premium segment in US

Increase in car sales from 671850 units to 805800 units in late 2002

20% increase in sales

PROMOTIONS:

Launched BMWFilms.com, “the hire” (film series)

News of the BMW Films at key Internet entertainment rumor sites and a radio DJ program in 20 key metro markets.

RESULTS:

In 2001, BMW sales increased by 12.5% compared to 2000

During the four month core of the promotion, the films were viewed more than 11 million times

DEFENSIVE STRATEGY

DEFENSIVE STRATEGY

According to Sun Tzu “Do not assume that enemy will not come but be prepared for his coming…

Do not presume he will not attack but instead make your own position unassailable”

DEFINITION

Defensive Marketing Warfare Strategy Are Designed To Protect A Company’s Market Share, Profitability, Product Positioning, Or Mind Share.

TYPES OF DEFESIVE STRATEGY

POSITION FLANK MOBILE COUNTER ATTACK CONTRACTION

POSITION Position defense involves occupying the

most desirable market space in the minds of the consumers, making the brand almost secure.

Example: Pepsi Vs Coca Cola

FLANK

Attack the enemy at its weak points or blind spots i.e. its flanks

Example: Mc Donald Vs Burger King

MOBILE

This involves constantly shifting resources and developing new strategies and tactics. Involves shifting focus from the current product to underlying generic need.

Example:Petroleum companies get involved into oil, coal, nuclear and hydroelectric industries

CONTRACTION

Withdraw from the most vulnerable segments and redirect resources to those that are more defendable

e.g. TATA Group sold its soaps and detergents business units to Unilever in 1993

COUNTER-ATTACK Responding to competitors’ head-on

attack by identifying the attacker’s weakness and then launch a counter attack .

CASE STUDY( DEFENSIVE): PEOPLESOFT

ORACLE’S BACKGROUND Founded in 1977 as Software

Development Labs (SDL). Launched relational database

technology in 1979. In 1983, renamed Oracle. Specialises in ERPs, CRMs, SCMs. Flagship product the Oracle Database Oracle employs 105,000 people

worldwide. Oracle had the third-largest software

revenue, after Microsoft and IBM.

BACKGROUND OF PEOPLESOFT

Founded in 1987 .

Specialises in HRMS and CRM software.

Friendly merger with smaller rival JD Edwards

RATIONALE BEHIND THE TAKEOVER

Eliminate its major competitor. Capitalize on the perceived strong

brand loyalty. Launch a new product called

FUSION that will merge best aspects of the PeopleSoft, JD Edwards and Oracle Applications and merge them into a new product suite.

DEFENSE STRATEGIES EMPLOYED BY PEOPLESOFT

Poison Pill

Customer Assurance Plan (CAP)

On behalf of Sun Tzu we all want to say

“ KONI-CHIVA”