Defensive business strategy is a set of management tools used to protect a company from competitive attacks and retain its market share and profitability. It involves measures such as increasing marketing and advertising, emphasizing the benefits of the brand, and enhancing the value of products or services. There are two approaches to defensive strategy: active, direct measures to block competitors, and more passive measures to prevent competition in a relaxed manner. The strategy is crucial for the well-being and survival of a firm, as it helps fend off aggressive attacks and prevent substantial risks to the business. Without a strong defense, even the most powerful companies can lose their market position and profitability. Defensive strategies can include retrenchment, customer complaint management, and creating switching barriers to maintain profitability and keep customers. The objective of a defensive business strategy is to protect the company's market position and ultimate profit streams. It is essential for companies to monitor the industry, anticipate competitive threats, and continue to build strategic control points to ensure their survival and success.
Some examples of companies that have successfully implemented defensive business strategies include:
· Tylenol has implemented successful defensive marketing strategies to protect its brand and market position.
· Starbucks when threatened by the growth of competitors like McDonald's, Starbucks rolled out new products and services to defend its market position.
· Facebook has employed defensive marketing strategies to protect its brand and market position, such as introducing new features to counter competitors.
These companies have effectively used defensive strategies to protect their market share and fend off competitive attacks.
Companies measure the success of their defensive business strategies by monitoring their market position, profitability, and the effectiveness of their strategic control points. The objective of a defensive business strategy is to fend off aggressive attacks and protect the company's market position and ultimate profit streams. Success can be evaluated by assessing factors such as market share retention, customer loyalty, and the ability to anticipate and counter competitive threats. Additionally, companies can measure the success of their defensive strategies by analyzing the impact f their measures, such as increased marketing and advertising, on customer acquisition and retention. Ultimately, the effectiveness of a defensive strategy is determined by the company's ability to withstand competitive attacks and maintain its profitability and market position.
Defensive business strategies are employed to protect a company's market share and profitability. Some types of defensive strategies include:
· Involves reducing expenses, such as through employee layoffs, to increase profitability.
· Selling off assets to achieve certain objectives, such as higher returns or debt reduction.
· Building strong relationships with customers to foster loyalty and prevent them from switching to competitors.
· Establishing effective communication and trust with customers and within the organization.
· Making it difficult for competitors to enter the market through tactics such as exclusive partnerships with suppliers or retailers.
These strategies are aimed at fending off competitive attacks and maintaining a company's position in the market. Defensive strategies are crucial for the well-being and survival of a firm, as they help prevent market share erosion, customer defections, and other negative consequences of aggressive competition.
Founder dependence is a common challenge faced by small businesses in the US. Here are some steps that small businesses can take to overcome founder dependence:
1. Train your employees: One of the first steps to overcoming founder dependence is to train your employees to do everything you do. If you keep everything close to your chest, they will never have the opportunity to take over essential business operations. When you train your employees, you can delegate tasks to them and free up your time to focus on other aspects of the business.
2. Get customer feedback: When you are around, and particularly when you are not, make sure to get customer feedback. If you are not present and your employees are treating customers poorly or wasting time on your dollars, you want to know about it. To take it a step further, you can send in a secret shopper to give you extra feedback on your employees and their level of customer service.
3. Hire quality talent: Hiring talented people is another challenge for small businesses. Small businesses often succeed or fail based on the quality of their team. Naturally, one of the challenges businesses faces is finding the right team members and recruiting the best talent. Without much name recognition or the ability to pay high salaries, small businesses may struggle to attract top talent. However, hiring quality talent is essential to overcoming founder dependence.
4. Build working systems: The next step to overcoming founder dependence is to build working systems that exclude your daily input to execute. As a business owner, you need to learn to exclude yourself from daily business tasks, especially if you have capable hands on your team. You should structure standard working operations that show each employee what to do, when and how to do them. You should also have performance appraisal systems in place to ensure that your employees are meeting your expectations.
5. Document all the operations in your business: Document all the operations in your business, and hand the relevant documents over to every concerned person in your team. Allow them to come back with questions and suggestions. This way, you can ensure that everyone is on the same page and that your business can continue to operate smoothly even if you are not around.
In conclusion, small businesses can overcome founder dependence by training their employees, getting customer feedback, hiring quality talent, building working systems, and documenting all the operations in their business. By taking these steps, small businesses can ensure that they can continue to operate smoothly even if the founder is not around.
May 13, 2024
Photo by Stefan Steinbauer on Unsplash