A term that is used by the military applies in a similar manner in the corporate world. It is called 'strategic withdrawal', a pattern of withdrawing the weaker products in certain locations while maintaining a stronghold in other specific markets. The military does the same in tactical moves when it withdraws forces from a certain area while maintaining a stronghold in other locations.
‘Pulling back' does not mean leaving the territory. When a business finds, its product weaker compared to the competition, it starts withdrawing while at the same time, strengthening other products. The reasons are multiple: a) it can be more focused on the area of stronghold, or b) it can put more effort and energy into another market having higher margins, and c) the competition is too strong to manage with the resources available.
I am describing tactical in the business community as an act or means to achieve a goal. In hotel sales, the phrase we use is 'tactical promotion', which is a short-term plan to achieve results. A quick example is if a hotel is having a lower occupancy at a certain period, then the sales manager issues a ‘tactical offer’ Lets say, a dinner for two people will be provided free of charge if the guest books the room for three days. The point to be noted here is that the booking window is open only for a period of 15 days. This is to gain traction in occupancy. Any customer booking during these open booking window period will get the benefit of this offer.
Now, coming to the point of withdraw, this in a business sense can be understood as when the management withdraws a product, a scheme, a plan, or an option to give strength to another product or plan. The business is strengthening a market or its footprint. However, this process is not done permanently but is decided tactically for a shorter period.
Withdrawal is a strategy, not a weakness.
It happens in business that we do not want to lose our stronghold area. However, immense focus on the expansion into the new market of geographical location, may lead to weakening our control on occupied market. To maintain the stronghold and expand market at the same time, resources are an important factor. This is the time when the tactical withdrawal is used to change the direction towards a more lucrative market and manage resources precisely. A continuous search for more profitable market makes management change strategy and tactical withdrawal one of the best possible solutions.
It is a common practice in hotel revenue management, while focusing on a traditional geographical stronghold, we start looking for new markets. However, if the comprtitors presence becomes stronger then the limitation of resources can weaken its own traditional markets. The first step is to divert resources to a traditional geographical area and start withdrawing from other markets. It can be vice versa as well. It’s all part of the strategy and tactical moves that demonstrates that the withdrawal is not a weakness.
Another popular action by individuals who changes their investment portfolio regularly with the aim to liquidate less productive assets and use the resources towards higher growth-oriented products. It can be short-term or long-term. Basically, we all have our own Tactical moves that is driven by the withdrawal strategy at an individual level, business level and even at the military level.
'Flank defence' is the first step by a management team before going for a tactical withdrawal option. The word flank defence is defined as identifying and strengthening weak points, to avoid competition influence and penetration in market share.
Withdraw strategy is a need with a thoroughly defined goal.
Perfect concept.