Attack! Here comes offensive business strategy

Like in military warfare, business also has offensive strategy that seeks to attack competitors to undermine and get better of them. These strategies take the fight straight into the marketplace where the purpose is to inflict severe damage to the competitors.

Offensive business strategies arise in two ways: one is from internal competence and the other is from external strength. Let me first talk about internal competence where firm has two sets of competence spectrum: one is resource availability and the other is cost advantage:

Resource availability is key point giving a firm massive competitive advantage. Resources include availability of materials for processing; assured supply channels, trained staff and focused management. If a firm has superior resource availability it can easily outsmart competitors and weaken them even before they get up to compete.

Cost advantage is where internal competence is used to obtain reduction in ex-factory cost. When in the production process, the staff and the systems ensure that final ex-factory cost is much less than that of competitors. This cost reduction can come out of direct cost or indirect cost or both.

Let me explain bit of external strength of a business. This can arise from price leadership and market dominance.

Price leadership comes about when the firm decides the price and all other competitors follow suit. Here, the prevailing sales price is same for every player but the firm with lesser ex-factory cost gets the plum and its competitors get only the icing. Incidentally a firm that is able to identify & satisfy buyer want & demand is in better position to obtain price leadership.

Market dominance is basically a dependent variable. This is because all the three aspects, that is, resources availability cost advantage and price leadership combined together facilitate a firm getting its market dominance. Consequently firm’s internal competence & external strength are optimized to such an extent that it fawns specific product department, say for example luxury items. Another result is firm is in now a dominant market player who can acquire one or more competitors via mergers & acquisition. 

  

Cheers!

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail:   cosmicgems@gmail.com

Blog:   Business Strategist