What Is an Offensive Competitive Strategy?
An offensive competitive strategy is a type of corporate strategy that consists of actively trying to pursue changes within the industry. Companies that go on the offensive generally make acquisitions and invest heavily in research and development (R&D) and technology in an effort to stay ahead of the competition. They will also challenge competitors by cutting off new or under-served markets, or by going head-to-head with them.
Defensive competitive strategies, by contrast, are meant to counteract offensive competitive strategies.
Key Takeaways
- Offensive competitive strategies seek to shape an industry through first-mover and other aggressive moves.
- This can be an expensive strategy as it may include mergers & acquisitions, R&D investment, and intellectual property protection.
- Offensive strategies may be contrasted with defensive ones, which instead focus on establishing a wide moat through building brand loyalty, offering high quality goods, and customer service.
Understanding Offensive Competitive Strategies
Various techniques and strategies may be employed either alone or as part of a concerted effort to create an offensive competitive strategy. Companies may even employ entirely different strategies in different locales or marketplaces. For example, consider how a global soft drink company may react to a competitor in its mature home market compared to how it would react to a startup competitor in an emerging market. Such variability can lead to some complex offensive strategies, and even the incorporation of some defensive strategies as part of an offensive effort.
The most extreme offensive competitive strategy is when companies actively look to acquire other firms to fuel growth or limit competition. These firms are often regarded as higher risk than those that are defensive because they are more likely to be fully invested or leveraged, which could prove problematic in the event of a market slowdown or dislocation. A characteristic of all offensive strategies is that they tend to be expensive.
Offensive Competitive Strategy Types
There are several types of offensive competitive strategies, each with its own advantages and disadvantages.
- An "end run strategy" eschews direct competition and instead seeks to exploit untouched markets or neglected segments, demographic groups or areas.
- A "pre-emptive strategy" is simply the natural advantage a company has when it is the first to serve a particular marketplace or demographic. It can be exceptionally hard to unseat. Also known as "first-mover" advantage.
- A "direct attack strategy" is more aggressive than the end run or preemptive offensive competitive strategies. Such a strategy may entail comparisons to competing products or companies that are unflattering, a price war, or even a competition as to who can introduce new product features at a faster pace. The direct attack may also borrow tactics of the previously listed strategies, all with the goal of taking charge of the public conversation through marketing campaigns.
- An "acquisition strategy" seeks to remove a competitor by buying it. As such, it is a strategy employed by the wealthiest or best-capitalized competitor. Such a strategy offers the advantage of instantly incorporating new markets, customer bases, or corporate intelligence. Since it is such an expensive strategy, it must be used judiciously, and with the possibility of corporate antitrust rules or local competition laws in mind.
Defensive Strategies
Some examples of defensive strategies include:
- A pricing war, in which a company commits to matching or beating a competitor on price.
- Adding more features to keep ahead of a competitor.
- Offering better service or warranties that speak to having better products.
- Advertising and marketing more to raise awareness of improved products or service.
- Partnering with suppliers or retailers to exclude or limit access to competitors.
- Countering a move by a competitor, such as when one moves into a company's home market by entering their own home market.
- Defensive strategies against a hostile takeover, of which there are several.
FAQs
An offensive competitive strategy is a type of corporate strategy that consists of actively trying to pursue changes within the industry. Companies that go on the offensive generally make acquisitions and invest heavily in research and development (R&D) and technology in an effort to stay ahead of the competition.
What is an example of an offensive strategy in business? ›
The offensive and defensive strategies are implemented when the company wants to overcome competition. Examples that involve offensive are product innovation, price wars, mergers and acquisitions, market expansion, and aggressive marketing techniques.
What is offensive competitive situations? ›
Offensive competitive strategies are designed to attack competitors' weaknesses and gain market share. This can be achieved through a variety of tactics, including lowering prices, improving product quality, increasing marketing efforts, and acquiring competitors.
What are offensive brand strategies? ›
Examples of brand offense strategies:
- Introducing new and improved product lines.
- Launching creative and attention-grabbing marketing campaigns.
- Expanding into international markets to reach new customers.
- Leveraging emerging technologies to enhance the customer experience.
It takes successful offensive strategies to build competitive advantage, widen an existing advantage, or narrow the advantage held by a strong competitor. The best offensives use a firm's resource strengths and most potent competitive assets to attack rivals in areas where they are competitively weak.
What should a company's strategic offensive be based on? ›
the company's strengths as well as its rival's strengths and weaknesses.
What are the two offensive strategies used in Ultimate? ›
Ultimate Frisbee Offensive Strategies
- Vertical Stack. ...
- Motion in the Vertical Stack. ...
- Horizontal Stack. ...
- You can adjust the depth of the stack to modify the space that your offense wants to prioritize. ...
- Other Offensive Formations in Ultimate Frisbee. ...
- Side Stack. ...
- Split Stack. ...
- German.
Offensive actions in sports are those that are intended to score points or gain an advantage over the opposing team. In the context of the given options, kicking a soccer ball into the goal is an example of an offensive action because it is an attempt to score a goal and gain an advantage over the opposing team.
Which of the following is not an offensive competitive strategy? ›
The correct answer is "Offering differentiation" is NOT an offensive competitive strategy.
What is offensive and defensive competitive strategy? ›
How to Think About "Offense" vs. "Defense" in Your Product Strategy. We're borrowing the terms “offense” and “defense” from sports here: Offensive strategy is about scoring points for your team, while defensive strategy is focused on how to prevent the other team from scoring.
The key principles of an offensive strategy are: To build share out of the leader's defects, not the challenger's merits. To identify the weakness in the leader's strength. To launch the attack at the point of weakness in the strength.
What is the objective for an offensive strategy? ›
Overall, the main purpose of offensive strategy is to gain initiative, exploit vulnerabilities, and achieve specific objectives in various domains .
What is an example of offensive diversification? ›
From an offensive viewpoint, the goal is to broaden your company's reach with new products or markets, as a way to increase profits. For example, a business that sells laptops may decide to start selling desktop computers, opening up a new revenue stream that could bring more money into the company.
What is a blue ocean type of offensive strategy? ›
It is about creating and capturing uncontested market space, thereby making the competition irrelevant. It is based on the view that market boundaries and industry structure are not a given and can be reconstructed by the actions and beliefs of industry players.
What is offensive data strategy? ›
An offensive data strategy is like having a super-smart sidekick who helps you make data-driven decisions, giving you a competitive edge in the market. Offensive data strategy focuses on using data as a strategic asset to gain a competitive advantage, improve decision-making, and identify growth opportunities.
Which one of the following is an example of an offensive strategy blocking the avenues open to challengers? ›
Expert-Verified Answer. Pursuing continuous product innovation to draw sales and market share away from less innovative rivals is an example of an offensive strategy.
What is strategic offensive? ›
A strategic offensive is the aggressive expression of war planning and the use of strategic forces as a whole, combining all resources available for achieving defined and definitive goals that would fundamentally alter the balance of power between belligerents.
What is offensive vs defensive in business? ›
A defensive strategy focuses on control, while an offensive strategy focuses on flexibility. A defensive strategy has a single source of truth (SSOT), while an offensive strategy has multiple versions of truth (MVOT). As you can see, these strategies are complete opposites.
