Kellogg on Marketing, 3rd Edition

CHAPTER 7Defensive Market Strategy

Tim Calkins

Google, FedEx, Apple, Lipitor, Patagonia. These are all tremendous businesses. They are leaders in their category, wildly profitable, and respected the world over. They are also late entrants. Apple wasn't the first company to make computers, and Lipitor wasn't the first statin. FedEx wasn't the first company shipping packages, and Google wasn't the first search engine. Despite showing up late, however, they managed to become successful firms. They found a way into the category.

For every successful late‐entrant firm, however, there is another firm with another ending: the company that had all the market share and couldn't hang on to it. As the new competitor appeared, the established player lost customers and revenues. The market slipped away.

When we consider defensive strategy, the question is simple: How can you prevent this from happening to you? There are few things that are certain in this world, but here is one: If you have a profitable, successful business, you can be quite certain that competitors would like to get a piece of it. The better your business, the more profitable your firm, the more competitors will attack.

Defensive strategy is a critical but rarely discussed part of marketing. In this chapter, we will define defensive strategy and then walk through the process of developing a defense plan.

Defining Defensive Strategy

Defensive strategy is taking action to blunt the impact of a competitor's move. Offensive ...