A defensive strategy is taken up in the least advantageous situation. The organization operates in an unfavorable environment, and additionally the internal threats are strengthened by internal weaknesses of the company. You need to try to minimize weaknesses and threats. It is very difficult because a company does not have any strong sides or opportunities, which could be used here.
In an optimistic version, the defensive strategy comprises of a business activity enabling a company to survive or combine with other enterprise. And in a pessimistic version, to liquidation of the organization.
Within the defensive strategy, you may consider the following conduct:
- gradual withdrawal – management of the company may take into account gradual withdrawal from the market. It is about taking any possible advantages and profit before liquidation of the company;
- joining another company – the organization may be “absorbed” by (or joined with) another company which coper better. Thanks to such “help” from the outside, the company manages to survive;
- reduction of costs – some effects may be also brought by reduction of costs. The company wins more time and waits for appearance of more advantageous circumstances, a better situation on the market. Thanks to that, the company will survive the worst period, and maybe rebuild itself in the future, which will provide the business with better conditions.
- ceasing on investing – in this strategy the company is too weak to invest in its assets. The company should not get rid of them.