When a new competitor enters the market or an existing one launches a disruptive product, clients often turn to consultants to craft a strategic response. Competitive response or market defense cases test your ability to stay structured under pressure, evaluate threats realistically, and propose a course of action that protects (or regains) market position.
In this article, we’ll walk through how to analyze a competitive threat and develop a smart, MECE response strategy.
1. Clarify the Situation and Objective
“Our client is a leading meal delivery platform. A new competitor has entered the market with lower prices and faster delivery times. The client wants to know how to respond to protect market share.”
Be sure to clarify:
- What’s the specific threat (pricing, speed, tech, branding)?
- Is the client losing revenue, customers, or both?
- What’s the client's top priority: defend share, maintain profitability, reposition?
2. Structure Your Response into 4 Buckets
A robust competitive response framework includes:
- Threat Assessment: How serious is the new competition?
- Client Strengths: What can we leverage to respond?
- Strategic Options: What specific moves could we make?
- Risks & Trade-offs: What could go wrong?
3. Assess the Competitive Threat
Dive deep into what the competitor is doing and how sustainable it is:
- Are they undercutting on price? How long can they sustain it?
- Do they have better technology or operations?
- Are they targeting a specific customer segment?
- What’s their funding situation?
“The new player offers 30% lower prices, but they’re heavily subsidizing from VC funding. That may not be sustainable long-term.”
4. Re-express the Client’s Differentiators
Shift focus back to the client—what can we defend or double down on?
- Brand equity or customer loyalty
- Superior product features or geographic coverage
- Operational scale or exclusive partnerships
This is where you define your “unfair advantage.”
5. Propose Strategic Responses
Group your response options into categories like:
- Pricing: Match, undercut, or shift to value-based tiers?
- Product: Add features, redesign UX, improve performance
- Marketing: Targeted campaigns, loyalty programs, repositioning
- Distribution: Partner with new channels or lock exclusives
“I’d recommend launching a loyalty program that rewards repeat orders, which directly targets churn risk from price-based switching.”
6. Weigh Trade-offs and Risks
Responding too aggressively can hurt margins or trigger a price war. Always consider:
- Short vs. long-term impact of the response
- Operational feasibility
- Brand implications of repositioning or discounting
- Internal capacity to execute the response
7. Recommend a Prioritized Response Plan
End with a focused, tiered recommendation that balances bold action with feasibility:
“In the short term, I recommend a targeted price match for high-frequency users, paired with a campaign to highlight our superior restaurant variety and delivery reliability. In parallel, we should pilot a referral program in top cities to boost retention.”
Final Thoughts
Competitive response cases are fast-paced and dynamic. To stand out, show that you can calmly analyze the threat, understand your client’s assets, and prioritize moves that strike a balance between defense and growth.
Don’t just react. Respond strategically—with confidence and clarity.