Defensive strategies to build market power

Abstract

Offensive plans focus more on growth than defensive ones. Offensive plans are more common in attractive markets, while defensive strategic plans are designed to protect positions and contribute to generating cash flow and profits in the short term.
Defensive strategic plans focus on protecting or reducing positions in served markets. They usually do not generate significant increases in sales volume, except in cases of defensive strategies to maintain market share in expanding markets. However, they are essential to achieve short-term cash flow and profits and often define the current level of market share, sales, and profits.
In general, companies with significant market shares in growing or mature markets use defensive strategic market plans to maintain cash flow values that support achieving short-term profits and shareholder value. Without a proper implementation of these strategies, companies will likely face difficult situations of declining short-term profits and lack the resources needed to invest in growth market opportunities.