Defensive strategy framework in global markets

Abstract

Purpose The purpose of this study is to develop a conceptual framework for defensive strategy by integrating market entry modes and the typology of firms suggested by Day and Nedungandi, and to attempt to propose how local incumbent firms utilize their mental models in order to react against market entry of new competition in global markets. Design/methodology/approach The theoretical perspective adopted in the study is how mental models used by incumbent firms influence their reaction to market entry of new competition in developing defensive strategies to defend their markets. Findings Mental models of incumbent firms, categorized as self‐centered, competitor‐centered, customer‐oriented, and market‐driven firms, impact their reaction and the development of defensive marketing strategies against market entrants using a variety of market entry modes in global markets. Originality/value The paper presents an extensive review of the defensive marketing and mental models literature and shows how the way in which incumbent firms react to market entry of new competition contributes to understanding of incumbent reaction to market entry of new competition in global markets. Research directions for future research and managerial implications are also provided.

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