Posted in Marketing and Strategy Terms, Total Reads: 1828
Definition: Status Quo Strategy
Status quo strategy is an approach under which a business keeps things as they are by not trying to capture more market share and thus avoiding confrontation with its competitors which is both risky and costly.
When a company feels it has captured enough market share and focus on sustaining it rather than trying to increase it be taking their competitors head on, they maintain a status quo by not trying to expand in other areas. This strategy is generally a temporary adaptation to conditions and not a long-term stance.
If a company has a consistently profitable product in its product portfolio, it may decide to concentrate on holding it until something changes. The goal is to defend the company's existing market share, and avoiding any expensive confrontation with competitors. This strategy is also called as active waiting, since the owners keep a low profile while waiting for an opportunity.
• Saves cost of batting with competitor
• Saves time
• Gives time to focus on other products in the product portfolio
• Company might become lazy and miss on opportunities
• Reluctance to hold people accountable
• Lacks clear direction
In order to break out of status quo, companies search for doing something unique which their competitors cannot copy. This could either be a new product development, extensive distribution channel, etc.
For example: Suppose two pizza companies A& B holding 30% and 40% market share respectively. Company A can either chose to hold on to its markets share or try to increase it by introducing newer varieties and option to customize. However this is an expensive measure and it doesn’t guarantee success since company B could also adopt similar measure. Thus in this scenario its best for company A to wait for an opportunity and come up with a unique value proposition for customers which company B cannot copy.