Management strategies are, typically, offensively oriented. Businesses are usually eager to take on their competitors and to gain larger markets. There are, however, some merits to defensive strategies. These are not suited to all businesses; anyone considering using a defensive strategy should, have a basic understanding of their purpose and potential.
The purpose of a defensive strategy is to protect a preexisting competitive advantage. The goal of a firm using defensive strategies is to maintain a current position and to fend off threats from other businesses. The purpose of a defensive strategy is not to create a new competitive advantage or to develop the business further. The purpose of a defensive strategy is not to make progress put to simply maintain the status quo.
There are two approaches to defensive strategies. The first approach is to actively block competitors who attempt an attack on the firm's market share. For example, if a firm faces a new entrant to the market, it could take them on directly by cutting prices in order to drive them out. The second approach is to simply make it known that any attack on the business will be met with a strong counterattack, for instance by making announcements about product developments.
The major benefit of a defensive strategy is that it is considerably less risky than an offensive strategy and requires fewer resources. A defensive strategy can help a firm to dominate its existing market and to maintain its current success.
The single largest drawback of a defensive strategy is that it does not allow for development. A company that uses only defensive strategies may be able to hang on to its current position and present competitive advantage, but it is unable to grow beyond that stage.