Posted in Marketing and Strategy Terms, Total Reads: 5011
Definition: Reactor Strategy
Based on various parameters such as product innovation, speed of decision making and inclination to take risks, it can be determined if an organization is following an Aggressive Business Strategy or not. There are 4 ranges of this type of business strategy; Prospector, Defender, Analyzer and Reactor.
The reactor strategy is the least aggressive, and organizations typically do not have any forward looking or predictive strategy. They are not pro-active and react to events as and when they occur. Their strategies are enforced when they are required to respond to changes in the market or other environmental factors. Essentially actions are taken in hindsight when the event has already occurred based on the past data available.
For example, if in a company, one of its businesses is not making profits and has a declining sales figure, and it decides to diversify or divest that business, the company is following a reactive strategy.
Example: Nokia entering into the smart phone segment with Windows 8 and Lumia is an example of a reactive strategy adopted due to declining market share in the higher end mobile phone segment.