Govt .R . C.

College of Commerce and Management

Presentation On

Defensive Strategies
Submitted to Prof . Waseeha Firdose

Team Members
Ramesh.C Kiran Kumar Chethan M.V Chethan C M Kumarswamy Dhanaraj M

Contents
Meaning on Strategy

Brief Introduction on Strategy

Meaning on Defensive Strategy Fundamental Principles Defensive Strategic Market Plans Types Defense Strategy

Timing is everything.But, really, When???

Meaning of Strategy
A strategy is a plan of action designed to achieve a vision. Strategy is about gaining a position of advantage. It derives from the Greek "" (strategia), "office of general, command, generalship

Brief Introduction on Strategy

Strategies in game theory may be random (mixed) or deterministic (pure). That is, in some games, players choose mixed strategies. Pure strategies can be thought of as a special case of mixed strategies, in which only probabilities 0 or 1 are assigned to actions

Meaning on Defensive Strategy

Defensive marketing warfare strategies are a type of marketing warfare strategy designed to protect a company's market share, profitability, product positioning, or mind share.

Fundamental Principles
There are five fundamental principles involved:
Always counter an attack with equal or greater force. Defend every important market. Be forever vigilant in scanning for potential attackers. Assess the strength of the competitor. Consider the amount of support that the attacker might muster from allies.

 The best defence is to attack yourself. Attack your weak spots and rebuild yourself a new. Defensive strategies should be the exclusive domain of the market leader.

Defensive Strategic Market Plans

Defensive Strategic Market Plans

Protect Market Position

Exit Market Position

- Protect Market Share - Harvest Price Strategy - Build Customer Retention - Harvest Resource Strategy - Reduced Focus - Divest Market Position

Types Defense Strategy

A market leader should generally adopt a defense strategy Six commonly used defense strategies Position Defense Mobile Defense Flanking Defense Contraction Defense Pre-emptive Defense Counter-Offensive Defense

Defense Strategy (contd)

Position defense :
Least successful of the defense strategies a company attempting a fortress defense will find itself retreating from line after line of fortification into shrinking product markets. Saunders (1987) E.G. Mercedes was using a position defense strategy until toyota launched a frontal attack with its lexus.

Defense Strategy (contd)

Mobile Defense :
By market broadening and diversification For marketing broadening, there is a need to Redefine the business (principle of objective), and Focus efforts on the competition (the principle of mass) e.g. Legend Holdings, the top China PC maker Legend has announced a joint venture with AOL to broaden its business to provide Internet services in the mainland

Defense Strategy (contd)

Flanking defense : Secondary markets (flanks) are the weaker areas and prone to being attacked Pay attention to the flanks E.G. San miguel introduced a flanking brand in the philippines, gold eagle, as a defense against apbs beerhausen

Defense Strategy (contd)

Contraction Defense :
Withdraw from the most vulnerable segments and redirect resources to those that are more defendable By planned contraction or strategic withdrawal e.g. Indias TATA Group sold its soaps and detergents business units to Unilever in 1993

Defense Strategy (contd)

Pre-emptive Defense :
Detect potential attacks and attack the enemies first Let it be known how it will retaliate Product or brand proliferation is a form of pre-emptive defense e.g. Seiko has over 2,000 models

Defense Strategy (contd)

Counter-Offensive Defense :
Responding to competitors head-on attack by identifying the attackers weakness and then launch a counter attack e.g. Toyota launched the Lexus to respond to Mercedes attack

Defensive Strategies

Retrenchment

Defensive Strategies

Divestiture Liquidation

Ch5-18

Defensive Strategies
Retrenchment
Regrouping through cost and asset reduction to reverse declining sales and profit

Ch5-19

Defensive Strategies
Guidelines for Retrenchment

Firm has failed to meet its objectives and goals consistently over time but has distinctive competencies Firm is one of the weaker competitors Inefficiency, low profitability, poor employee morale, and pressure from stockholders to improve performance. When an organizations strategic managers have failed

Very quick growth to large organization where a major Ch5-20 internal reorganization is needed

Defensive Strategies
Divestiture
Selling a division or part of an organization

Ch5-21

Defensive Strategies
Guidelines for Divestiture

When firm has pursued retrenchment but failed to attain needed improvements When a division needs more resources than the firm can provide When a division is responsible for the firms overall poor performance When a division is a misfit with the organization When a large amount of cash is needed and cannot be obtained from other sources. Ch5-22

Defensive Strategies
Liquidation
Selling all of a companys assets, in parts, for their tangible worth

Defensive Strategies
Guidelines for Liquidation

When both retrenchment and divestiture have been pursued unsuccessfully If the only alternative is bankruptcy, liquidation is an orderly alternative When stockholders can minimize their losses by selling the firms assets

Thank You