Contraction defense

One of the defense strategies some times adopted by the market leader in the wake of intense competition. Market leader sometimes recognizes that it can no longer defend all of its territory. The best course of action that is available to a market leader is planned contraction (also sometimes called strategic withdrawal). Planned contraction means giving up weaker territories and reassigning resources to stronger territories. It is a move to consolidate competitive strength in the market and concentrate mass at pivotal positions.