George Stalk, Jr.

At most companies, strategic choices are limited to three options:

1. Seeking coexistence with competitors. This choice is seldom stable, since competitors refuse to cooperate and stay put.
2. Retreating in the face of competitors. Many companies choose this course; the business press fills its pages with accounts of companies retreating by consolidating plants, focusing their operations, out-sourcing, divesting businesses, pulling out of markets, or moving upscale.
3. Attacking, either directly or indirectly. The direct attack involves the classic confrontation—cut price and add capacity, creating head-on competition. Indirect attack requires surprise. Competitors either do not understand the strategies being used against them or they do understand but cannot respond—sometimes because of the speed of the attack, sometimes because of their inability to mount a response.

Of the three options, only an attack creates the opportunity for real growth. Direct attack demands superior resources; it is always expensive and potentially disastrous. Indirect attack promises the most gain for the least cost.

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