The manner in which strategic changes are implemented
When introducing a new product it can be initially introduced to a peripheral market or it can immediately be aggressively sold to the key customers of its rivals. A price change may be made initially on products that represent the heart of a competitor’s product line, or the price changes can be first put into effect in product or market segments where the competitor does not have any great interest. A move can be made at the normal time of the year or it can be made at an unusual time. Of course there can be bluffs.
Divergence from past goals
If a competitor has historically produced products exclusively at the high end of the product spectrum in terms of quality, its introduction of a significantly inferior product is an indication of a potential major realignment of its goals or assumptions.
Divergence from industry norms
A move that diverges from industry norms is usually an aggressive signal.
The cross parry
When one firm initiates a move in one area and a competitor responds in a different area with one that affects the initiating firm, the situation is referred to as a cross parry. It occurs where firms compete in different geographic areas or have multiple product lines that do not completely overlap. It represents a choice for the defending firm not to counter the initial move directly but to counter it indirectly. In responding indirectly, the responding firm may well be trying not to trigger a set of destructive moves and counter moves in the encroached-upon market but to clearly
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signal displeasure and raise the threat of retaliation at a later date. If the cross parry is towards one of the initiator’s important markets it may be interpreted as a strong warning. If it is towards a lesser market then the warning will be less severe.
The cross parry is an effective way to discipline a competitor if there is a great divergence of market shares. If, for example, a price cut is involved then the cost of meeting this price cut will be greatest for the firm with the largest share. If the firm with the largest share in the cross parry market initiated the first move then this may increase the pressure on the firm to back off.
The fighting brand
A form of signal related to the cross parry is the fighting brand. A firm threatened or potentially threatened by another can introduce a brand that has the effect of punishing or threatening to punish the source of the threat. Fighting brands are warnings or deterrents to absorb the brunt of a competitive attack. They are also introduced with little push or support before any serious attack occurs, thereby serving as a warning. Fighting brands can also be used as an offensive weapon as part of a larger campaign.
Recourse to legal action
Large firms sometimes force smaller ones to yield ground by threatening to take legal action for a variety of patent and other infringements—even if no such infringements actually exist. Such firms force the weaker firm to comply because it does not want to bear the extremely high legal costs which it can incur in order to make its case.