Flank defense is a defensive strategy used by established companies to counterattack competitor or new company moves that aim at targeting their weaknesses or strengths. For the established firm, a flank defense strategy is imperative to ensure the new company does not succeed in exposing its weakness.
For example, Nokia’s budget-oriented “Asha” mobile phones have always been a major hit with Indian consumers. When some new Indian and Chinese brands entered the budget phone market with feature phones priced lower than Nokia’s budget offerings, it was viewed as a direct attack at Nokia’s inexpensive feature phone portfolio. Nokia took cognizance of this matter and retaliated by selling its budget phones for an even cheaper price to make sure the newer companies do not gain significant ground within India’s feature phone segment, thereby sustaining its market share and reputation.