Many industries are directed by recognized leading companies with the most significant market shares. Such companies usually set standards for competitors, changing pricing policies, introducing new products, expanding distribution channels, and increasing the intensity of promotional activities. The market leader should not be just an observer, as other companies are continually trying to challenge his position or capitalize on his weaknesses. The dominant position obliges the company to take active steps on three fronts at once – expanding the overall demand for manufactured products, trying to increase its market share, and, of course, protecting the existing market share with the help of well-planned defensive and offensive responses.
If Meraas attempts to challenge Emaar’s position as the leader in the real estate business in UAE, it will be beneficial for the latter company to apply flanking defense, preemptive defense, and counter-offensive defense strategies. As the industry leader, Emaar has the most resources and means for promoting and distributing new offerings to customers. If Meraas presents a new property, Emaaris able to suppress its competitor’s activity by increasing expenditure on marketing, thus luring the attention away from Meraas’ new estate. As part of the flank defense strategy, Emaar can also develop a new trademark that becomes a direct competitor to Meraas’ latest product.
The preemptive defense strategy is useful when competitors have not yet started their attacks. For instance, Meraas might be preparing to present its new innovative real estate project to potential buyers and investors. Anticipating this action, Emaar can make an announcement of a similar project before Meraas does, thus informing the Meraas management that the competition is going to be tough in this new market niche. Many other companies successfully use preemptive defense to force competitors to seek different market segments. For instance, grocery chain stores respond to locale-specific demands more promptly, thus winning the competition from local providers.
The counter-offensive defense strategy is also at Emaar’s disposal because the company has a sufficient amount of resources to lower prices, invest in advertisement and promotional programs, and announce new property in areas primarily occupied by Meraas. Such a movement will allow the company to distract the opponent and make them concentrate on defending their positions rather than attacking. For instance, Emaar can announce a new property in La Mer in Dubai. Currently, the company does not have any projects in the region, and the area has many estates built and sold by Meraas.