Differentiation Strategy of BMW

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Differentiation Strategy of BMW

Introduction

The success of any company regardless of the industry relies on its ability to offer value to the end customers. This value should be recognized by customers, and it should be different from the rest of the competition. The automobile industry consists of numerous brands, which have different strategies to capture the market. Due to the recent global recession phenomenon some brands have strategized to offer low cost vehicles, with exceptional fuel efficiency. This strategy enables these companies to attain monumental sales in the global markets and gives them the ability to capture the growing markets of developing countries. This strategy however is essentially a differentiation strategy, as it does not offer a new or different product. The automobile companies simply enter the fierce market brands competing on the basis of cost leadership. The current lifestyle of the majority of individuals living in the modern society permits them to change their vehicles on a consistent basis. People no longer treat automobiles as a fixed asset, which is a long term investment. Cost however is not the only factor that influences the automobile sales throughout the world. The modern society has grown to become environmentally conscious and high- tech. They demand vehicles which are not only equipped with the latest technological innovations; they also posses environment friendly technology. This trend has led to the majority of the world's car makers to invest in the next generation vehicles, which has led to the innovations such as the electric cars (Motavalli, 2012). Innovation rather than cost strategy is the basis for the long term success of the global automakers, and established brands such as BMW have expanded their global markets through this approach.

Discussion

BMW's Differentiation Strategy

The primary reason for BMW's success in the global market has been its ability to offer innovative automobile vehicles. The company has managed differentiate itself from the rest of the competitors; due to its focus on introducing the latest cutting edge technology to the market, before anyone else. The management at BMW believes that a car must grow and evolve similarly to a human being, and in this process continues advancements in the technological breakthroughs are essential. The company believes that the technological progress is the most viable strategy for sustainable growth. The current financial situation of the market has caused the consumers to become highly price sensitive, which has ...