Competitive Strategies: Characterisation according to Miles and Show (1978)

Competitive Strategies: Characterisation according to Miles and Show (1978)

When developing competitive strategies, it is necessary to maintain a balance between the interests of consumers and the actions of competitors. Explicit consideration of the position and behaviour of competitors and the definition of the attitude towards them is essential in choosing a strategy.

Components of competitive strategies

This classification comprises 4 competitive strategies characterised by an entrepreneurial spirit in the development of the product market.

  • Prospector: The company active in the search for new opportunities, often in this strategy is the origin of the changes to which the rest of the competitors in the market have to respond—more entrepreneurial spirit.
  • Analyser: They maintain and protect their basic businesses without renouncing new products and new markets.
  • Defensive: Characterised by creating a stable and sufficient domain for their long-term survival in the part of the market they have managed to penetrate, their interest in new opportunities is minimal.
  • Reactive: They do not develop any competitive strategy; they only react late to changes. Absence of competitive strategy.

Reactive companies only disappear because they are not developing any strategy.

Prospectors are suitable in an environment of rapid change. They are suitable at the beginning of the product life cycle, and in an unstable industry situation, the analyser is a little more complex as it is intermediate between the prospector and the defender; on the one hand, they strongly defend market share, and on the other hand, they develop markets and new products. Most often, they opt for differentiation.

Defenders are suitable for businesses with a stable market share in one or several large market segments and/or in a relatively mature market.

  • In the differentiated defender, marketing activities are essential for the implementation of this type of strategy.
  • In the cost defender, the need is for cost minimisation and product standardisation.

Prospecting and analysing companies show a market orientation that defensive and reactive companies do not develop. Companies with analysing strategies have obtained the best results; the entrepreneurial spirit is positive up to a certain point, which is when entrepreneurial aggressiveness unbalances costs.

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