A market leader has the largest market share (40%) and usually leads in price changes, new-product introductions, distribution coverage and promotional intensity. The aim of defensive strategies is to reduce the possibility of attack, divert attacks to less threatened areas and lessen their intensity.
Position defence: Occupying the top of mind recall for consumers, making the brand almost invincible.
Flank defence: Market leader not only stays in position defencebut also puts up an outpost to defend the weak front or to act as a counter invasion base.
Pre-emptive defence: An aggressive manoeuvre would be using guerrilla action across the market, hitting one competitor here, another there and keeping everyone on their feet. Another would be to achieve broad market envelopment that signals competitors not to attack.
Counteroffensive defence: Meeting the attacker frontally and hitting his flank or launch a pincer movement so it will have to pull back to defend itself. The leader may even lobby legislators to take political action to inhibit the competition.
Mobile defence: Leader stretches his domain over new territories through market broadening, which shifts the focus of the company from the current product to the underlying generic need, or market diversification, which shifts the company’s focus into unrelated industries.
Contraction defence: When a large company can no longer defend all their territories, they resort to giving up weaker markets reassign resources to stronger ones.
Overall we find that a company needs to continuously innovate, lest it become irrelevant in the grand scheme of the dynamic business world.
Source: Marketing Management: A South Asian Perspective, Kotler Keller Koshi & Jha.