Business Strategy
The bedrock of a business strategy lies in improving its competitive position or the product and services of the business unit within a particular industry.
A business strategy can either be competitive or cooperative. The competitive strategy involves battling against all competitors for an advantage. While cooperative strategy involves working with one or more competitors to gain an advantage against other competitors.
There are some tactics for companies to implement a competitive strategy. These can be done either offensively or defensively. An offensive tactic usually takes place in the established competitors’ market location. On the other hand, defensive market tactics take place in the firm’s own current market position.
What is Guerrilla Warfare?
Guerilla Warfare is an offensive tactic. It is a tactic to wear down the enemy through subtle attacks. Instead of extensive resources or expensive attacks on competitors, Guerilla is characterized by small and intermittent assaults.
Movie Case Study
Similar to the scene that is displayed, those slaves that are running can be killed in one go, but the enemy wants them to run. Guerilla warfare is a hit-and-run tactic.
Many business units choose to undertake this strategy. This would be seen as an intermittent assault on different market segments held by the competitor. A new entrant or a small firm can make some profits without seriously threatening a large established competitor. The established competitor does not retaliate in this case.
Example
This was seen in the Indian bottled water market where regional players like Ganga, and Pure had used this tactic against national players like Bisleri, Parle, and Aquafina.
Other offensive tactics include:
Frontal Assault
This is going head-to-head with its competitor. This is an expensive tactic. An example is Pepsi and Coca-Cola. This assault tries to match the competitor in every category from, price, and promotion to the distribution channel.
Flanking Maneuver
This offensive tactic targets the area of the competitor that is weak. An example is Red-bull which targeted Coca-Cola. Red Bull was strong in the energy drink segment and Coca-Cola wasn’t.
Bypass Attack
Rather than attacking directly, the company may choose to change the rules of the game, This tactic attempts to cut the market out from under the established defender by offering a new product that makes the competitor’s product unnecessary. An example of this is the mobile industry where competitors generally use this tactic. Apple and Samsung are two competitors that have been involved in bypass attacks.
Encirclement
The encircler has greater product variety in terms of both products and markets. Simply put, attacking the target company from all sides, hence the name encirclement.
An example could be seen in the e-commerce industry. Meesho attacking big players in the e-commerce category or Blinkit attacking Zepto in the fast delivery segment.
