2. Going on the Offensive
Commit to building your competitive advantage until it is decisive
Build from your most significant strengths and capabilities
Attack the competitor’s weak points – not their strengths

3. Examples of Offensive Strategies
Match or beat rival’s product quality at a lower price
Leapfrog competitors
be a first adopter of next-generation technologies, or
be first to market with next-generation products
Pursue continuous product innovation when rivals are not innovative
Pursue disruptive product innovation to create new markets
Adopt and improve on good ideas of other firms (rivals or otherwise)
Attack market segments where a key rival makes big profits
Blue Ocean – create new segmment

4. Choosing Which Rivals to Attack
Best Targets for Offensive Attacks
Vulnerable market leaders
Struggling firms on the verge of going under
Small local or regional firms with limited capabilities
Runner-up firms with weaknesses in areas where the challenger is strong

5. Examples of Defensive Strategies
Participate in technologies that are alternatives to those pursued by rivals
Introduce new features, add new models, or broaden the product line to close gaps / niches rivals may pursue
Maintain economy-priced models and options
Lengthen warranties
Offer free support services
Preempt rivals by making early announcements about new products or price changes
Challenge quality or safety of rivals’ products
Offer volume discounts, financing terms, and exclusive agreements with distributors that are better than rivals’

6. What Role Should the Website Play
To only disseminate product information
As secondary or minor distribution channel to sell directly to customers
As one of several distribution channels to access customers
As the primary distribution channel for selling to customers
As the company’s exclusive channel for selling to customers

7. Outsourcing Strategies
Outsourcing strategies involve a decision to farm certain value chain activities out to outside specialists and strategic allies.
When is outsourcing appropriate?
Contract manufacturers
Distributors or retailers
Outsourcing Internally Performed Activities
Vendors with specialized expertise

8. Outsourcing Strategies
Potential advantages
Reduce costs using source that does activity well
Enhance innovation with collaborative expertise
Allows flexibility to shift resources for change
Firm can focus on developing core competencies
Potential risks
Relying on source expertise rather than developing own

9. Vertical Integration Backward integration Forward integration
Pro: Control over more product components
Opportunities for cost reduction and differentiation
Con: Need to invest to develop that expertise
Forward integration
Pro: Control over channel-to-customer processes
Cons:
Increased costs for personnel and facilities
Resulting complex organization structure = less flexibility

10. Strategic Alliances, Partnerships, Mergers, Acquisitions
A strategic alliance (in all forms) is a formal agreement between two or more separate firms in which there is:
Strategically relevant collaboration of some sort
Joint contribution of resources
Shared risk
Shared control
Mutual dependence
Can be via formal contract (alliances, partnerships) or ownership ties (mergers, acquisitions)

11. Strategic Alliances, Partnerships, Mergers, Acquisitions
Provide access to:
Markets, resources, expertise, knowledge, experience
Technical, cultural, political, etc.
Non-ownership alliances typically short-lived
Risks of alliances
High failure rate – differing objectives, clashing cultures

12. Timing of Strategic Initiative
First mover advantages
Leadership image, patents/copyrights, seize customers, build customer switching costs
Late mover advantages
Imitation less costly, avoid first-mover mistakes