Proactive Vs. Reactive Business

Proactive and reactive business is a form of management. These management styles are implemented after the business is up and running and changes need to be made to increase or maintain market share. Both management styles have their pros and cons and use of either is dependent upon the type of business being rendered.

Time Frame

Proactive management is implemented before an issue arises. This involves constant study of the market place to adjust to trends before they occur. Reactive management is implemented when there has been a consistent inquiry by customers or clients for change.

Function

Proactive management is implemented so that the needs of the customers are met without the customer asking. Reactive management is implement to adjust to the changing needs of customers or clients.

Types of Change

Proactive management is implemented by changing protocol, updating marketing materials, updating the storefront or adding services or products prior to the customer asking. Reactive includes all these changes, too; the key difference is that the market must make consistent requests for the changes.

Expense

Proactive management requires an ongoing expense for research in the form of customer surveys, data mining, and general market research as well as any expense associated with implementing the change. Reactive management incurs an expense at the time changes are implemented.

Utilization

A proactive management style is most often utilized with businesses that have a lot of competition and level of market share is volatile. A reactive management style is most often utilized with businesses that have less competition and have a target market that changes slowly.