flank could be protected by maintaining several ‘loss leader’ (sold at
below cost) products.
3 Pre-emptive defence
This involves striking at potential competitors before they attack you.
The aim is to pre-empt their actions and reduce the potential competitive
threat. This may involve using, or threatening to use, the attacking strat-
egies (e.g. guerrilla attack) shown in Figure 8.8. Large, powerful ‘players’
deter competitors by routinely threatening, but seldom actioning, price
cuts or increased promotional expenditure. They warn others to back-off.
4 Counter defence
When attacked, most organisations will respond with a counter attack.
The counter attack may be immediate or a more considered response
might be made once the situation has settled down. By nature, counter
defences are reactive, and if the position defence is strong enough no
additional counter may be necessary. For example, a strong well-
established brand loyalty may see off a price cutting competitor.
5 Mobile defence
A mobile defence involves a flexible and adaptive response, allowing
the defender to switch into new areas of interest as threats or opportu-
nities materialise. It is achieved by broadening current markets or by
diversifying into unrelated activities. To illustrate, an insurance com-
pany may broaden the range of financial services offered to customers
or diversify into areas such as estate agency and property manage-
ment. The key is to build a strategic presence in a range of lucrative
areas/segments.
6 Contraction defence
It may prove impossible to defend all operational activities. Therefore,
a selective strategic withdrawal could be the best option. By sacrificing
some activities, resources are freed to defend core activities. For example,
consider a computer company. It could withdraw from the high vol-
ume/low margin personal computer market and focus on more prof-
itable areas, such as maintenance and software development.■ Product and market strategies
Product/market strategies are detailed in nature. They address the spe-
cific market impact of a product or product line. This section examines
three concepts useful in formulating such strategies: the product/market
matrix, PIMS analysis and the PLC.Product/market matrix
Ansoff (1975) developed a policy/market matrix (or ‘Ansoff’ matrix)
which provides a useful linkage between products and markets. The
matrix (Figure 8.10) considers four combinations of product and market.
Each combination suggests a growth strategy.166 Strategic Marketing: Planning and Control