Lanchester Strategy

AAA

DEFINITION of 'Lanchester Strategy'

A war strategy that has been successfully applied in the business context to entering new markets. The strategy is named after British engineer Frederick W. Lanchester, who published the laws governing the war strategy in a landmark publication titled "Aviation in Warfare: The Dawn of the Fourth Arm" in 1916. In business, the strategy is typically used to choose market types for new and existing businesses, in an attempt to find the easiest markets to penetrate.

INVESTOPEDIA EXPLAINS 'Lanchester Strategy'

Lanchester's laws were implemented in successful war strategies by the Allies in World War II. After World War II, renowned quality expert Edward Deming applied the laws into operations research. The Lanchester Strategy was introduced in Japan in the 1950s and popularized by Japanese consultant Nobuo Taoka in the 1960s. The Lanchester Strategy was increasingly used to capture market share, with Canon being one of the first companies to utilize the strategy globally during its fierce battle with Xerox in the photocopier market in the 1970s and 1980s.

RELATED TERMS
  1. Market Penetration

    A measure of the amount of sales or adoption of a product or ...
  2. Market Share

    The percentage of an industry or market's total sales that is ...
  3. Marketing

    The activities of a company associated with buying and selling ...
  4. Viral Marketing

    Internet advertising or marketing that spreads exponentially ...
  5. Market Saturation

    When the amount of product provided in a market has been maximized ...
  6. Credibility Theory

    Tools, policies, and procedures used by actuaries when examining ...
Related Articles
  1. Fundamental Analysis

    Great Expectations: Forecasting Sales Growth

    Predicting sales growth can be something of a black art, unless you ask the right questions.
  2. Active Trading

    Economic Moats: A Successful Company's Best Defense

    Find out why some companies thrive while others flounder.
  3. Investing

    What is an economic moat?

    The term economic moat, coined and popularized by Warren Buffett, refers to a business' ability to maintain competitive advantages over its competitors in order to protect its long-term profits ...
  4. Entrepreneurship

    The Impact Of Recession On Businesses

    Find out how this economic cycle affects both small and big business.
  5. Trading Strategies

    How can retirees protect their wealth in a bear market?

    Look at some helpful hints about how to protect your retirement nest egg when the stock market is underperforming or the economy is in recession.
  6. Fundamental Analysis

    What is the affect of the invisible hand on consumers?

    Discover how consumers help initiate and benefit from the invisible hand of the market, which naturally coordinates trade in an exchange economy.
  7. Economics

    How does the invisible hand phenomenon affect investment markets?

    Read about how the invisible hand of the market coordinates investment markets and provides social benefit and why its effects are distorted along the way.
  8. Entrepreneurship

    How Steve Jobs Changed The World

    As an innovator and visionary, Steve Jobs’s accomplishments can be held on a pedestal with the likes of Microsoft’s Bill Gates, Google’s Larry Page and Sergey Brin and Facebook’s Mark Zuckerberg.
  9. Fundamental Analysis

    What are some examples of economies of scale?

    Take a look at different examples of economies of scale, including how marginal costs can be reduced through external and internal factors.
  10. Fundamental Analysis

    How can quantitative easing be effective in the economy?

    Take a deeper look at the impacts of the Federal Reserve's large scale asset purchase plan, better known as quantitative easing, or QE.

You May Also Like

Hot Definitions
  1. Treasury Bond - T-Bond

    A marketable, fixed-interest U.S. government debt security with a maturity of more than 10 years. Treasury bonds make interest ...
  2. Weight Of Ice, Snow Or Sleet Insurance

    Financial protection against damage caused to property by winter weather specifically, damage caused if a roof caves in because ...
  3. Weather Insurance

    A type of protection against a financial loss that may be incurred because of rain, snow, storms, wind, fog, undesirable ...
  4. Portfolio Turnover

    A measure of how frequently assets within a fund are bought and sold by the managers. Portfolio turnover is calculated by ...
  5. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories ...
  6. Federal Funds Rate

    The interest rate at which a depository institution lends funds maintained at the Federal Reserve to another depository institution ...
Trading Center