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The Five Strategic Attack Vectors is a strategic framework I developed that provides a systematic approach to identifying and exploiting inherent weaknesses in incumbent business models, creating opportunities for innovative challengers to enter and transform established markets successfully.
In competitive markets, established incumbents often appear unassailable. They command a significant market share, possess extensive resources, and benefit from established customer relationships.
Yet history is filled with examples of dominant players disrupted by nimble challengers who identified fundamental vulnerabilities in incumbent business models.
This article examines a robust strategic framework for identifying and exploiting "attack vectors" -specific weaknesses that incumbents cannot easily defend against due to constraints inherent in their core business model.
These vulnerabilities stem from the very strengths and structural characteristics that made incumbents successful in the first place.
The most profound competitive advantage for startups is often hidden in plain sight: incumbents' strengths create their vulnerabilities. The same business model choices that enable an incumbent's success simultaneously create constraints that limit their ability to respond to certain types of competitive threats.
These constraints are not due to poor management or lack of awareness. Instead, they represent fundamental tradeoffs that cannot be easily resolved without threatening the incumbent's core business. This creates strategic openings for challengers who can identify and exploit these structural weaknesses.
Five Strategic Attack Vectors
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We have identified five primary attack vectors that startups can use to challenge established incumbents successfully.
Each targets a different type of inherent constraint that limits incumbents' ability to respond effectively.
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1. Low-End Disruption: "Too Small to Care"
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Core Constraint: Incumbents' cost structures require high margins to sustain their business model.
Attack Strategy: Target segments that are unprofitable or too small for incumbents to prioritize.
How It Works: Begin with simpler, more affordable offerings that target underserved segments or non-consumers. Initially, these markets appear unattractive to incumbents due to lower margins or small market size. Over time, improve offerings and gradually move upmarket, eventually threatening the incumbent's core business.
Examples:
Personal computers vs. minicomputers
Discount retailers vs. department stores
Steel minimills vs. integrated mills
Online brokers vs. full-service brokers
Southwest Airlines vs. traditional carriers
Key Success Factors:
Begin with a business model that can profitably serve low-margin segments
Focus on simplicity and affordability over full feature sets
Continuously improve while maintaining cost advantage
Expand upmarket only when firmly established in initial segments
2. Business Model Innovation: "Margin Conflict"
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Core Constraint: Incumbents are locked into existing margin structures and distribution methods.
Attack Strategy: Introduce fundamentally different economic models that create margin conflicts for established players.
How It Works: Develop alternative ways to monetize products or services that would cannibalize the incumbent's high-margin business if they were to adopt them. This creates a strategic dilemma where incumbents must either sacrifice existing revenues or cede market share.
Examples:
Netflix subscription vs. Blockbuster rental fees
Spotify streaming vs. CD sales
AWS pay-as-you-go vs. on-premise licensing
Airbnb asset-light vs. hotel property ownership
Warby Parker direct-to-consumer vs. Luxottica's channel markups