Offensive & Defensive Strategies for Competitive Advantage

1. Offensive & Defensive Strategies for Competitive Advantage By Group – 5 Mahesh Menon 23 Anindita Mukherjee 26 Ashwin Patel 33 Ajay Nikam 30 Deval Trivedi 53 Jofy James 36

2. Competitive Scope & Competitive Advantage COMPETITIVE ADVANTAGE High COMPETITIVE SCOPE Low Low High

3. Offensive Strategies CONFIGURATION OF THE VALUE CHAIN Same Chain as Leader New activities New Chain Same as Leader COMPETITIVE SCOPE Different from Leader

4. Offensive Strategies : Reconfiguration

5. Offensive Strategies:

6. When/where to attack?

7. Barriers to Leader’s Retaliation • Mixed Motives • Higher Leader response cost • Different Financial Priorities • Portfolio constraints • Regulatory pressure • Blind Spots • Incorrect Pricing

8. Conditions for Defense or Divest?? When to Defend : • No concerns for short-term profitability • Increasing growth rate • No Complacency When to Divest?? • High competition • Reducing profitability

9. Defensive Strategies

10. Raising Structural barrier • Fill Product or Positioning gaps • Block Channel access • Raise Buyer’s Switching cost • Raise the cost of gaining trial • Defensively increase Economies of scale • Defensively increase Capital requirements • Foreclose alternative technologies

11. Raising Structural barrier Lowering the Inducement for attack • Reducing profit targets • Managing competitors assumptions Invest in protecting proprietary know-how Tie-up with suppliers Raise Competitors inputs cost Defensively pursue inter-relationships Encourage gov. policies that raise barriers Form Coalitions

12. Increase Expected Retaliation • Signal Commitment to Defend • Signal Incipient Barriers • Match Guarantees • Raise the penalty of Exit or lost share • Accumulate retaliatory resources • Encourage good competitors • Establish defensive coalitions • Disruption of test markets • Leapfrogging • Litigation

13. Evaluating defensive tactics • Value to buyer • Cost asymmetry • Sustainability of effect • Clarity of the message • Credibility • Impact on competitors goal • Other structural effects • Matching by other incumbents

14. Xerox - copiers Defender Japanese co. identified sizable segment unattended by XEROX In small sized copiers for small sized companies Attacker Indirect Strategy Expanded product line – mid size and large copiers TABLETOP COPIER USING PLAIN PAPER Low price to penetrate market and increase Market share Relevant media- Announcing new product and affordable Office supply dealers Expansion Redifinition & Reconfiguration

15. Defensive Strategy The fight to regain lost market share is costlier than retaining market share it possesses Reducing Profits Reducing Profits Fill Product gaps Fill Product gaps Coalitions

16.  Cummins Engines CUMMINS ENGINES CO. leaders in manufacturing of heavy diesel engine Offensive strategies adopted by Komatsu (Japanese competitors ) Products priced 40% lower Poorly severed and emerging market segment in medium size engines Develop quality product to expand product lines Reconfiguration – Product Changes

17. Cummins Defense

18. HLL Vs Nirma

19. Thank You