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Offensive Business Strategies

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"Another characteristic of offensive strategy is that it focuses on price-cutting and adding new features to create competitive advantage in the global market." This statement makes me want to ask the following two questions:

1. To achieve its objective using an offensive strategy, can an organization sell at loss?

2. Could this strategy provide a sustainable competitive advantage?

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For achieving the business objective, an organization can sell its products and services at a loss or below the costs of the products. Under a predatory offensive strategy, the business organizations often take the form of predatory pricing, which is cutting down pricing of the products below original costs of products to eliminate competition from markets with an objective to increase prices again after competitors have exited from the market (Peng, 2013). At the same time, it is a short term business strategy with the vision of earning revenues in future for the company. It is necessary for this strategy that opponents of the company must be financially weak.
Another feature of the offensive strategy, which ...

Solution Summary

This solution discusses the characteristics of offensive strategy.

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Market Defensive or Offensive Strategy

Suppose the competitor analysis reveals that the American subsidiary of your firm's German competitor is about to broaden its product mix in the American market be introducing a new line against which your company has not previously had to compete in the home market. The environmental analysis shows that recent weakness in the dollar-Euro exchange rates is expected to continue, making American exports relatively less in Germany.

(a) Do you recommend a defensive strategy, or do you attack your competitor in its home? Discuss fully.
(b) How will you implement your recommended strategy? Provide evidence to support your position.
(c) Management learns from the economic analysis of Country A that the wage rates are expected to increase by 10 percent next year. Which functional areas of the firm will be concerned? Why is management concerned? Provide evidence to support your arguments.

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