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Types of Business Strategy
Strategy's original application had to do with military issues— protecting one's homeland from invading armies or, as one of those armies, finding new, more effective ways to conquer territory. In fact, military history has become the basis for many marketing strategies and drives much of the current marketing philosophy.

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Titles like Guerrilla Marketing and Marketing Warfare, rife with military reference and application, bear this out. The applications themselves have become more than mere metaphor or allegory. Many military texts have become handbooks for strategic planning at the corporate level. Today, the words of General George Patton, Napoleon Bonaparte and even Genghis Khan are finding their way into corporate boardrooms. The parallels between the challenges faced by these famous military leaders and many of America's top companies are not coincidental.

We talked about the word strategy earlier as defined from the classic military perspective. From a business standpoint, you may want to consider the following definition:

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Strategy is the coordination of the means to achieve the desired ends as they are defined by corporate policy.

The nature of business strategy is much like that of military strategy in that it pits company against company, marketing team against marketing team, and product against product. Ultimately, however, it's a case of mind against mind. No matter how large an organization is, or how expansive its management or marketing team, it all boils down to that simple concept.

In warfare, it was the invasion strategy defined in Gen. Dwight Eisenhower's mind positioned against the strategic defenses conceived and produced by Gen. Irwin Rommel that led to an ultimately successful Allied landing at Normandy Beach. History is replete with similar examples—and so is business. Eisenhower's plan was the result of almost a year's research and development by the finest minds in the Allied armies, with a strategic launch based on the results of that effort. And that's very much like business.

Understanding the human element of strategic development— that concept of mind (your corporate goals or objectives) versus mind (your competition's objectives)—is central to understanding the concept behind strategic development. You aren't merely trying to get on the good side of consumers in hopes that they will try your product. Often that's the easy part. The hard part is fending off at¬tacks from competitors old and new who are interested in upsetting your strategies and causing you to lose market share and drop out of the competitive race. In fact, the twin cornerstones in any strategic development focus on the following:

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• Any good strategy's foundation is built on the effort to dislocate the market, both physically and psychologically, for its competitors. This may manifest itself in a surprise attack on market segment, creation of a better product distribution strategy or manufacture of a superior style of widget to that of the competition. Handled deftly, such moves can demoralize the competition and cause its efforts to stumble and fall due to mistakes in judgement or loss of the will to compete. All efforts must operate in concert in order to be effective and may, for a time, run counter to what your ultimate strategy will be.

• As a strategy, dislocation will weaken your competition. Once the competitor has reached a point of vulnerability, you must pull all disparate elements together and concentrate your focus on that area of weakness most easily exploited. That may be a market segment not currently being served or a product classification that hasn't been fully exploited. Just like a weakness in a fortification that, once broken through, allows the invading army to infiltrate enemy territory, concentration in a marketing strategy will allow for market entry at the point of least resistance. From there, it's simply a matter of divide and conquer.

Whether your maneuvers are military or marketing, you must first carefully assess the situation before determining your plan of attack. Sometimes you have all the resources you need and complete intelligence about the next set of moves scheduled to be made by your competition. More often than not, however, you're shy on resources, lack the necessary knowledge about your competition and don't have the time and luxury to analyze the situation and make your next move. That last sentence describes the classic battlefield scenario, but no doubt experienced marketers would recognize the same set of drawbacks.

There are standard strategic moves that you may be able to successfully implement, provided you analyze the situation as thoroughly as possible and make your strategic choices based on sound logic and instinct, not just what you think might be cool to do. Let's consider each strategy in turn, both from a positive and negative ' standpoint:

The Full-Frontal Direct Attack
One of the greatest surprises to the British forces at the outset of the Revolutionary War was the colonists' lack of battlefield etiquette. Seriously outmanned and outgunned, the fledgling American army did not march in formation into the withering cross-fire of their enemy, like the Redcoats did. Rather than mount a direct attack— they simply didn't have the manpower to do so—the colonists in¬stead hid behind rocks and trees, firing their muskets into the line of British soldiers, mowing them down like harvested wheat.

The British direct attacks met with nasty consequences, a fate not surprising considering that military experts agree that the en¬trenched army easily has a three-to-one advantage. For those with the resources, a direct assault can be impressive and successful—consider, once again, Normandy Beach—but it is also costly in terms of re¬sources. The same holds true in marketing. Direct assaults on firmly entrenched market positions or products exhaust the budgets, tools and resources that go into a marketing campaign. The result often is an expensive "me too" campaign that doesn't usually work. If your product is as good as the market leader and no better or different, why would I bother to switch? Marketing history, like military history, is filled with examples of full-frontal assaults. General Douglas MacArthur said that a direct assault is the sign of a mediocre commander. The same holds true for marketing.

The Indirect Assault
The direct assault tends to play into the defending army's (or company's) hands, putting the offense at a distinct disadvantage. The in¬direct assault, on the other hand, exploits a weakness of the opposition, identifying and penetrating a weakly defended point of entry in the marketplace, only to grow and expand from within. This indirect assault often operates as a diversionary tactic, masking a direct assault that comes after the point of entry has been exploited.

Volkswagen did not enter the U.S. market going head-to-head with big, boxy Chryslers, Packards and Hudsons. Instead, the Ger¬man automobile identified an undeveloped niche for small, economical, well-made cars and slipped quietly in while the major automotive producers were trumpeting newer, larger models in the expanding post-war environment. Once the beachhead had been established and the car became a cultural presence in the U.S., prices increased befitting not the product's size, so much as its engineering superiority.

The Envelopment Strategy
Similar in design to the Indirect Attack, the envelopment strategy identifies weakly defended points of entry in order to gain a foothold. Once established, the attacker spreads out in all directions, finding other points of entry or market niches on which to capitalize, then introducing itself to those niches and eventually enveloping the target. Mass marketers of consumer goods often find such a strategy successful introducing first one product, then another, until the marketplace is littered with the company name and its related brands.

Boston Beer Company, producers of the Samuel Adams Beer brands, did that among its customers. The company first introduced it flagship brand, the lager, as an entry into the high-quality craft brewing market that was emerging in the 1980s and established a foothold among drinkers who favored a well-made, full-flavored beer. Once the brand had established a market presence, Boston Beer Company began introducing a wide variety of ales, porters and stouts and, while it didn't leave the craft beer audience, it did envelop a wider segment of that audience until it had a contender in every category. The fact that the market itself was growing significantly helped increase public preference for and sales of that brand.

Military examples of the envelopment strategy are too numerous to mention. The most obvious one would have to do with the ways the defenders of the Alamo succumbed to General Santa Ana's troops, which significantly outnumbered the Texan defenders. The Mexican soldiers eventually found weaknesses in the defenses and flooded in. And the rest, quite literally, is history. That may not be the best example, but it certainly is the most obvious one.

The Bypass Strategy
Probably the most difficult and failure-prone of all plans, the bypass strategy enables attackers to bypass its chief competitors and diversify into unrelated products or markets. From a military perspective, this may work as a temporary flanking strategy, but in marketing it runs the risk of diluting the core business and central operating strategy, extending resources into areas where the company had no business being.

Pepsico diluted its core competency—the production and distribution of soft drinks—to move into the fast food market, purchasing brands such as Taco Bell and KFC. The move was well out¬side the influence sphere of its chief competitor, Coca-Cola. The Atlanta-based soft drink producer retrenched and stuck to its primary purpose—producing Coke. Coca-Cola was and still re¬mains the leader of the two brands in markets worldwide.

One company that was able to diversify successfully was Virgin, the massive British-based music retailer that acquired and has made a rousing success out of Virgin Atlantic Airlines. According to entrepreneur/owner Richard Branson, if you" can succeed with one company, you can succeed with them all. Branson's belief is that if you break the right rules of business, you're bound to gain ground. Go figure.

The Guerrilla Attack
In an age of smaller, entrepreneurially driven companies, the guerrilla attack has become one of the most frequently used marketing strategies. Most of us first heard about the concept of small, strate¬gic strikes when a group of American and English commandos trouped through the Malaysian jungles to blow up the prisoner-built bridge over the river Kwai. From a marketing perspective, it's been a popular strategy ever since.

Most often guerrilla marketing is conducted by a small company against a larger, market-dominating firm. It's characterized by periodic, strategically driven strikes, each of which has its own single objective. Taken together, guerrilla warfare can hamstring a major operation, such as it did to American forces in Vietnam, or it can result in market or military success. Castro's Cuba is one such exam¬ple. Rarely does one expect big wins from a guerrilla assault, unless it's combined with another strategy. But continued attacks well-conceived can demoralize the opposition, slow progress and sometimes draw the larger opponent to a standstill.

And sometimes, whether in military action or marketing maneuvers, that's the best we can hope for.

Source :
Michael Muckian, Prentice Hall's One-Day MBA in Marketing: A Complete Education for the Busy Professional , Prentice Hall.

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