Offensive Competitive Strategy
Candlefocus EditorThe premise behind an offensive competitive strategy is to outpace the competition by achieving a higher market share, while seeking to shape the industry in which they work as they do so. In executing an offensive strategy, a company intends to increase their competitive advantage before their rivals have the chance to react to its actions. This strategy is often less risky than defensive strategies as it seeks to get ahead of the competition before they respond.
When successfully implemented, an offensive competitive strategy can lead to swift competitive dominance and significant growth for a company. With its sights set firmly on becoming the leader in the market, a well-developed offensive competitive strategy encompasses a variety of activities from product innovation to strategic alliances. It is important to recognize that an aggressive approach to maintaining competitive advantage will likely result in increased costs associated with R&D, IP protection, and marketing initiatives. However, doing so can help a company quickly establish itself as a leader in the industry.
In contrast, a defensive competitive strategy focuses on blocking its rivals’ progress by differentiating its offering and creating a wide moat which makes it difficult for competitors to penetrate. This involves creating higher quality products, loyal customer base, and excellent customer service. Whereas an offensive competitive strategy is proactive and aggressive in its approach to achieving competitive advantage in the market, a defensive competitive strategy is passive, relying on creating a wide moat to protect the company from competitors.
Ultimately, each of the aforementioned strategies comes with its own set of risks, rewards, and expenses. Companies should be cognisant of the strategies best-suited to their market and their commitment to taking on new risks if they decide to pursue an offensive competitive strategy. With the right measures in place, an offensive competitive strategy can help companies become market leaders and secure high returns.