As I’ve pointed out in my book, Brilliant Manoeuvres: How to Use Military Wisdom to Win Business Battles, “To win in war and business requires seizing and maintaining the initiative; going on the defensive only buys time to withdraw, reorient or reconstitute one’s forces.”
In other words, successful business strategy is fundamentally about finding ways to go and stay on the offensive. The principles of offensive action are as follows: seize and maintain the initiative; manoeuvre for advantage; use the indirect approach; and probe and follow the path of least resistance.
I go into these principles in great detail in Brilliant Manoeuvres, but I’ve found that it is also necessary to understand one’s posture before trying to make any changes. This is why I’m currently developing a tool to assess offensive posture. Email if you would like to receive a copy of this document, which also includes examples of how it can be applied in competitive analyses.
As already mentioned, offensive posture is fundamentally about seizing and maintaining the initiative. This plays out in five different dimensions. When you combine all five, you get a highly revealing picture of your own competitive posture and that of key competitors, and that enables you to generate insights so you can ‘seize and maintain the initiative.’ For each of these dimensions, you can be the leader (or one of the leaders), ahead of the pack, in the middle of the pack, a follower, or far behind (or even dead last). Obviously, the terrain you want to occupy is leadership, or at least ahead of the main pack. Let’s look at these dimensions in greater detail.
Customers. If you’re the leader, you get to pick and choose your customers. This confers great flexibility as you can select product-market segments that are the most profitable, with the greatest growth potential, and also that contribute the most to a strong brand. Conversely, if you’re far behind the pack, you basically have to take what you can get in terms of customers. This usually forces you into a commoditized position, where you absolutely have no choice but to compete with ‘me too’ products at the lowest possible prices.
Price Flexibility. The key word here is ‘flexibility.’ It’s not necessarily that you always command the highest prices for your products and services, but rather that they be appropriate to your product-market mix and branding. If you’re the leader with all the initiative and freedom of action, you get to set your price. This could be the highest price possible, especially if you’re introducing new products and services aimed at early adopters. But it could also be at lower price points once you’ve created or penetrated a new market. Conversely, followers have little choice in setting prices. They basically have to follow what the market determines, and are often selling to the bulk commodity market and late adopters. Followers have no choice but to be imitators and low-cost producers.
Product Leadership. This factor follows naturally from the previous two. If you’re in a leadership position or ahead of the pack, you can be more innovative in creating differentiated products and services. You can also take more calculated and prudent risks. This is because you have more resources, such as capital and time, to experiment with initiatives. This confers greater freedom of action to manoeuvre around competitors but also to stay ahead of the pack. Conversely, followers are forced into commodification of their products and services, and by extension these have to be lower priced. This can be a conscious choice by a company, but it is also riskier because the leaders clearly have the initiative and freedom of action.
Brand Strength. Leaders tend to have strong brands that are recognized and admired. One of the principal benefits of brand strength is customer loyalty, even in the face of difficulties. Look at how customers have forgiven Apple for its mistakes over the years. At the other end of the spectrum, followers are non-entities in customers’ minds. They are generic and are often forced to produce generic products and services under license for stronger brands. This can be a conscious strategy, but once again it has considerably more risks, as the company has little room for error.
Surprise/Speed. This is perhaps one of the most unrecognized benefits of an offensive posture. When you have the initiative, you can pick and choose the time and place to act, how, when, and to whom you offer new products and services. Companies in the lead are often a lot quicker to respond to competitive challenges and changes in customer tastes. This confers surprise and magnifies the positive effects of the four other dimensions. On the other hand, followers are constantly being surprised or overtaken by competitors. A sure sign of a follower position on this dimension is when a company is constantly in crisis mode. Senior management has that ‘deer in the headlights’ look that comes from being surprised and unable to react in a timely and effective manner.
These five dimensions can be adapted to any situation beyond the competitive sphere, for instance in sales and marketing, organizational change initiatives, leadership, etc. A good start is to assess your offensive posture relative to your main competitors. Like I said above, feel free to contact me if you would like a graphical tool for doing so, or just to discuss your needs in this regard.
© Alcera Consulting Inc. 2013. We encourage the sharing of this information and forwarding of this email with attribution. All other rights reserved.
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