Proactive and reactive strategies are two strategies that are extensively used by various organizations. Both these strategies are necessary for the success of a business in the long run. Proactive strategies are essentially those strategies that are used by companies to anticipate the future requirements or potential challenges and threats of a company, and to take steps to cater to these needs and threats before they are actually experienced. On the other hand, reactive strategies are those that companies use as a reaction to an unforeseen event after it has taken place. Companies develop these strategies to respond to an internal or external situation that has already taken place, or is taking place at that time. To identify the precise combination of proactive and reactive strategies that should be used by companies, internal reviews and precise estimation of trends is required, and also the particular actions that should be taken under each kind of strategy.
Proactive and reactive strategies will be further discussed in this article, and the differences between the two will be explained.
Definitions and explanations
A proactive approach to developing strategies concentrates on planning for the future. The basis of these strategies is an anticipation of threats, challenges and opportunities in the business environment. In addition, these strategies help in identifying and avoiding possible hazards before they are actually experienced. Therefore, proactive strategies help in forecasting the future and thus, attaining improved results. Furthermore, these strategies frequently view the organization in a more analytical manner, taking into account various factors like market condition, customer complaints, accidents, unnecessary costs, high labor turnovers and claims.
It is frequently observed that businesses concentrating on proactive approach are more effectively able to carry out problem solving and deal with challenges. Those organizations that adopt a proactive approach are focused towards the target. In such organizations, objectives are assigned and progress is reviewed from time to time. These organizations evaluate markets, products and behavior of competitors and concentrate on innovation. They concentrate on customer satisfaction and regularly take feedback from customers.
When proactive strategies are used, the resources the company spends on ‘crisis management’ decreases, which allows the company to concentrate more on its mission. A competitive edge is also offered by the proactive approach as the company is positioned as a leader in fulfilling customer requirements. However, when there is too much focus on proactive strategies, and when the expected trends are not predicted correctly or when the anticipated events do not take place, the company resources spent on such planning will be wasted. This is where reactive strategies come into play, as explained subsequently.
A reactive strategy is one in which problems are handled after they have taken place. When an organization adopts a reactive approach, it does not plan for the long term. Sometimes, unanticipated problems are experienced by organizations, which may be internal or external to the organization. In such situations, companies need to react rapidly to minimize the losses and damages. This is when reactive strategies are used by organizations.
A reactive organization does not formulate plans for the future. However, when it faces an emergency situation, it develops plans to manage it. In a reactive organization, autocratic approach is adopted by the top management. Such organizations do not analyze competition in the market, and the products of the competitor. Rather, the focus is on following the instinctive feeling when dealing with issues instead of carrying out a comprehensive analysis of the situation.
Reactive strategies decrease the unnecessary efforts and resources spent on planning activities. However, when a reactive approach is adopted, the organization exhibits a slow response and often misses out on new and emerging opportunities in the market. When the industry is competitive, this may decrease the company’s share in the market, while also negatively affecting the growth of the company.
Difference between proactive strategies and reactive strategies
The major difference between proactive strategies and reactive strategies is given below:
Proactive strategies are those strategies that are used by companies to anticipate challenges, threats and opportunities in the market, while reactive strategies are those that are used by companies to deal with an unforeseen situation after it has taken place.
The purpose of proactive strategy is to respond to anticipated challenges, while reactive strategy helps in handling unanticipated events.
Proactive strategies are applicable to the threats, opportunities and challenges that a company expects will take place in the future. On the other hand, reactive strategies are applicable for issues that occur in the present.
4. Crisis management
Proactive strategies decrease the efforts a company makes for ‘crisis management’, while reactive organizations only react after a crisis has occurred.
Proactive strategies vs reactive strategies – tabular comparison
A tabular comparison of proactive strategies and reactive strategies is given below:
|Strategies used to anticipate future events in the market||Strategies used to deal with events after they have occurred|
|Respond to anticipated challenges||Dealing with unanticipated events|
|Used on threats, opportunities and challenges that are expected to take place in the future||Applicable on events that take place in the present|
|Decrease crisis management efforts||React after crisis has taken place|
Conclusion – proactive strategies vs reactive strategies
Proactive strategy differs from reactive strategy mainly in that proactive strategy is used for the future, whereas reactive strategy is used for events that take place in the present. Companies that have adopted a proactive approach anticipate an issue and seek ways to find solutions. However, the opposite happens in a reactive strategy. Companies face the problem at that very instant. Companies that stress on proactive strategy are usually able to deal with challenges more effectively. Such strategies allow companies to formulate their own decisions instead of reacting out of necessity under circumstances that are probably not in their control.
Nonetheless, at times, companies come across issues, particularly in the external environment, that they are unable to avoid. In such situations, rapid response is required, and proactive planning is not helpful. Hence, reactive strategies are required alongside the proactive strategies so as to mitigate issues and remain successful.