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Strategy Moves categorized and examples by Fernando Tuan


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Strategy Moves categorized and examples by Fernando Tuan

  1. 1. STRATEGY MOVES • Simulated from historic military tactics • Strategic moves for managers, marketers and entrepreneurs, covering all 14 known attacking and defending strategies
  2. 2. 14 tactics 1. Guerrilla attack 2. Isolation attack 3. Flanking attack 4. Frontal attack 5. Undifferentiated circle 6. Differentiated circle 7. Signaling defense 8. Creating barriers to entry (fixed and mobile) 9. Global service 10.Pre-emptive strike 11.Counter-attack 12.Blocking entry 13.Holding the ground 14.Withdrawing
  3. 3. Tactic# 1: Guerrilla attack Definition: Guerrilla attacks are used against market leaders by challengers who are small and have limited resources. Guerrilla strategy is less ambitious in scope than other offensive marketing strategies and it often aims at harassing, demoralizing, and weakening an opponent through random attacks intended to keep it off-balance and continuously guessing about where the next attack will take place . When to use: Start to penetrate to the new market that dominant by one giant Example: Kinh Do against guerilla
  4. 4. Tactic#2: Isolation attack (By-pass) Definition: By diversifying into unrelated products or markets neglected by the leader When to use: Select a market segment whose margin per unit of sales is lower than that of the market leader. Why? Because if the industry leader decides to block our entry by launching a new model to compete head-on with us, it will be cannibalizing its own sales in its higher margin segments. (And even more so if it decides to lower prices in those segments to fight us in the bypass segment.) Example: Pepsi use a bypass attack strategy against Coke in China by locating its bottling plants in the interior provinces
  5. 5. Tactic#3: Flanking attack Definition: A flanking attack is an offensive marketing strategy used to exploit an opponent’s weaknesses. Flanked one has to fight on two strains at once, placing its disadvantage. When to use: Only when one controls a given segment, in terms of market share, should one move into a new one. Example: In the 1990s, Yaohan attacked Mitsukoshi and Seibu’s flanks by opening numerous stores in overseas markets San Miguel introduce a flanking brand in Philippines, Gold Eagle, as defense against APB’s Beerhausen
  6. 6. Tactic#4: Frontal Attack Definition: Offensive tactics. Target the competitor’s mainframe business When to use: When run out of tactical options. Seldom use unless the challenger has sufficient fire- power and staying power and the challenger has clear distinctive advantage Example Unsuccessful example: RCA, GE, Xerox, and Univac tried to frontally attack IBM in the past in its mainframe business and they failed because they lacked any competitive advantages or clear superiority over IBM. Successful one: Japanese and Korean firms launched frontal attacks in various ASPAC countries through quality, price and low cost
  7. 7. Tactic#5: Undifferentiated circle • Definition: • When to use and example • You enter a new industry and/or geographical area through more than one segment. • Those segments are similar to those that the leaders are in. • Among the different segments one tries to obtain synergy. • The first rule is to ensure you have synergy. Resource sharing must occur among segments for example in the sales force, transport, warehousing, the plant machinery, staff know-how, suppliers, quality control department, etc. It could be images as Nestle managed with its focus on food, both for adults (ice cream, chocolate) and babies (milk, food, and cereals). • Or it can be the distribution channels, which are common across skis, ski wear, tennis rackets, and casual sportive clothing for Head Ski Corporation.
  8. 8. Tactic#6: Global service Definition: Global service is a defense strategy, not an attack. This is because we enter new segments in order to protect our position in the old ones. When to use: When a company decide to enlarge its portfolio Example: 1995, Hertz acquire its supplier in GPS and changef name to NeveLost
  9. 9. Tactic#7: Signaling Definition: The main objective of signaling is to warn the enemy not to enter our market and thus to obtain the best of all victories: one without a fight When to use: Example: First, make sure that your commitment is known. Texas Instruments used a press conference; an interview in the press or on primetime television would also work. Or you can make a statement in the annual report, a speech at an industry conference, and so on. Basically, the idea is to publicize determination.
  10. 10. Tactic#8: Mobile barriers Definition: They are a new generation of products launched periodically, in the hope that their innovative qualities will discourage potential entrants who are not sure to be able to keep up the pace. They offer the defender a flexible response to attack and hence a way of taking the initiative. Mobile defense is sometimes known as active defense, as opposed to passive defense (fixed barriers). When to use: Example: McDonald frequently introduces new products to spice up its business. These range from sandwiches to desserts, drinks, and sauces. Casio emphasizes product replacement, which is designed to shorten and accelerate product life cycles, in order to protect its position as a leading manufacturer of pocket calculators.
  11. 11. Tactic#9: Fixed barriers to entry Definition: Fixed barriers are stable obstacles fortifications that the defender builds that the aggressive entrant has to overcome if it is to join the market. These barriers can be built in any business administration area: marketing, finance, accounting, manufacturing… When to use: Example:
  12. 12. Tactic#10: Counter-attack Definition: Responding to competitor’s frontal attack by identifying the attacker’s weakness and then launch a counter attack When to use: Example: Toyota launched the Lexus to respond to Mercedes attack
  13. 13. Tactic#11: Pre-emptive strike Definition: There are two distinctive characteristics of pre-emptive strikes. First, there is entry into new markets, which differentiates it from defenses where no movement is involved. Second, the movement occurs before the competitor move so it is distinct from blocking or counter-attacks. When to use: Example: Mercedes position by introducing E-Series until Toyota launched a frontal attack with its Lexus
  14. 14. Tactic#12: Blocking entry Definition: Blocking entry of new market player. When to use: when a competitor enters into a given segment, where we are not present, we decide to respond by entering that segment too, in order to protect ourselves. Example: Kinh Do
  15. 15. Tactic#13: Holding the ground Definition: Holding the ground represents engagement in our present segments When to use: Stay put our present segments, a competitor enters them, and we fight it put out. Example: Kinh Do
  16. 16. Tactic#14: Withdrawing Definition: This is the last defensive tactic. It is a defense with negative movement. It increases market distance from a competitor, but is not the same as giving up. It is sacrifice rather than surrender. When to use: Withdrawing to attack strongly in a different direction Example: KDC withdraw its share in Nutifood and Tribeco India’s TATA Group sold its soap and detergents business units to Unilever in 1993