When a company's owners feel that they have captured a strong market share they can realistically hold on to, they may attempt to maintain the status quo instead of expanding into other areas. This strategy is usually a temporary adaptation to circumstances rather than a long-term stance.

Holding the Line

The status quo approach is one of several adaptive strategies in business. Adaptive strategies are responses to circumstances that may be localized or temporary and are therefore subject to change if the situation changes. If a company has a good, consistently profitable product in a competitive business but no obvious way to claim a larger market share, the owners may decide to concentrate on holding the line until something changes. They will defend the company's existing market share, but won't try to introduce new products or locations. This strategy is also referred to as active waiting, because the owners try to maintain the status quo while waiting for an opportunity.

Advantages to the Status Quo

The advantage of the status quo strategy is that it avoids a potentially damaging battle with a strong competitor. For example, if a pizza shop has 25 percent of the business in its delivery area and its top competitor has 35 percent, the owner could decide to try to claim a larger market share by offering specialty crusts or two-for-one coupon deals. However, these measures would be expensive, and the competing pizza shop could take the same measures, so the company could lose money with no guarantee of gaining market share. In this situation, the owner might decide that the status quo of 25 percent is good enough for the time being.

Disadvantages to the Status Quo

The status quo strategy can become a disadvantage if it is not combined with the principle of actively watching and waiting for a new opportunity. For instance, it might become possible to buy out a smaller competitor in the area if it runs into trouble, thus suddenly claiming a much larger market share. If a competitor is actively waiting and observing the situation while you have become complacent, your competitor will be the first to spot and seize the opportunity.

Breaking Out of the Status Quo

To break out of a status quo situation, find something you can do differently that your competitors cannot. This could be an exclusive new distribution deal, a product improvement they can't match, a market segment they can't access or a customer service feature they can't duplicate. Some companies use a status quo strategy while actively developing plans for a new product line or expansion into a new area that will allow them to emerge with a larger market share as soon as they are ready to implement the changes.