Posted in Marketing and Strategy Terms, Total Reads: 5516
Definition: Counteroffensive Defense
Counteroffensive defense is a business strategy adopted by a market leader when attacked by another company. This involves that the market leader will attack the attacker in its main territories so that the attacker will have to put back some resources for the attacked territories and will have to divert its attention from launching attack on the market leader. This may involve significantly lowering the prices of the product or aggressive marketing communications or flooding the market with the products.
The main strategies of counteroffensive defense include
i) price cuts
ii) offensive promotion
iii) product improvements
iv) sales territory invasion.
The market leader may choose to wait and see the strategies adopted by the attacker and try to identify the areas of weakness of the challenger. Accordingly the market leader will adopt the strategy to offset the attacker’s challenge.
For example if there are two car manufacturers with one manufacturer targeting the high end segment while the other targeting the commuter segment. Now if the company targeting the commuter segment plans to enter the high end segment then it may create challenge to the other company. This company may launch cars in the commuter segment to counterattack the company. This is an example of a counteroffensive defense. An ideal example of counteroffensive defense is the launch of Lexus by Toyota to challenge Mercedes’ challenge.