In the marketplace, different firms take different strategy stances. This is but natural. As long as their situational designs and consequently their specific requirements of strategy differ from each other, they will evidently follow different strategy stances. One firm may find it appropriate to have a direct confrontation with the market leader; another may find it appropriate to keep aloof for some time from the heat of competition; the third may find it relevant to chalk out a strategy of sheer survival. It is essential to understand that there is no universally valid strategy stance. It is so because the various firms do not share the same situational design. Companies draw relevant elements and forge unique strategies to suit their unique situational design and relative position in the industry. Broadly, these strategy stances can be classified under three heads- offensive/ confrontation strategy, defensive strategy and niche strategy. Offensive strategy, also known as confrontation strategy, is as the name indicates a strategy of aggression/confrontation. A firm that is not presently the leader, but aspires to leadership position in the industry, usually employs an offensive strategy. The crux is that the firm adopting an offensive strategy automatically assumes the position of the challenger; the leader, mostly, is its target of attack. A defensive strategy is usually employed by the leader who has the compulsion to defend his position against the confrontation of powerful existing competitors or strong new entrants trying to dislodge the leader from his topmost position. The leaders concern is, how best can I defend my position? The leader cannot assume that its position in the industry is safe and its job easy. It has to maintain constant vigilance and defend its position against the attack of the challengers, because in any industry challengers keep appearing. A firm practicing the niche strategy neither confronts others nor defends itself. It cultivates a small market segment for itself with unique products/services supported by a unique marketing mix. These segments will be too small to attract big competitors. Normally, smaller firms with distinctive capabilities adopt a niche strategy. |
