DIFFERENTIATION STRATEGY OF BMW

Any company’s success regardless of the industry depends on the capability to offer value to the end users. The value offered should differentiate the company from the other competitors. The automobile industry has undergone serious of transformation. It consists of many different brands with various strategies to capture the market. Following recent global recession, many companies have had a change of strategy. They have competed in offering low cost vehicles with excellent fuel capacity. The lower price strategy has helped many companies increase sales in the world market. The realized sales offer businesses the ability to understand and take over the growing markets globally. Therefore, many companies compete on the basis of price.
The BMW group is one of the most successful companies globally. The organization manufactures automobiles under its three brands, BMW, Rolls Royce and MINI. BMW is a world class automobile due to its luxurious features. It has a wide global selling network spanning in more than 140 countries. Its growth on a global scale is impressive. In the first quarter of 2011, the brand realized a global sale of 382, 758 units. The number marked an increase from the previous year. Following the global financial crisis, which affected many automobile industries, BMW was a well-established brand. The sales units confirmed company’s position as the world’s largest car manufacturer. Maintaining the leadership position calls for various strategies in the company.
Innovation
The success of BMW group lies in its modern technology. The effective strategy is that BMW continues its cycle of innovations through developing new automobiles. While other automobile companies compete on a cost basis leadership, BMW understands that the cost is not the only factor influencing sales. People are demanding vehicles equipped with modern technology innovations. Vehicles possessing environmentally friendly engines are the management’s quest. BMW is one of the automobiles having achieved the success in innovation. The improvement of cars’ driving dynamics is remarkable. The company’s plan is to improve efficiency of combustion engines and develop low emission technology vehicles. The majority of the global car makers have invested in the next generation vehicles. The investment has led to latest innovations of vehicles like the electric cars. The approach of innovation rather than decreased cost is the secret behind BMW’s long-term success.
Social Sustainability and Ecological Strategy
Another way BMW Group uses to maintain their position in the market is its social sustainability and ecological strategy. The strategy is realized throughout its value chain. Focus has been put on ensuring clear commitment to conservation of resources and having a comprehensive product responsibility. Promoting a high racing profile, effective recognition branding and promoting flawless engine performance has been another strategy adopted by BMW. The sustainability is evident in BMW’s culture. BMW’s corporate culture has been one of the major success factors. Milberg and Panke are the management people behind the success, who helped turn the BMW around.
Brand Identity
Differentiation of the products has been the main focus in the premium segment. The strategy helps maintaining company’s identity as the prestige brand and also its momentum through customer engagement and communication. BMW achieves the goal through market research investment. The company understands customer behaviours and preferences. Therefore, BMW plans to develop new model type of vehicles and improve its products and services. Moreover, consumer education on the benefits of sustainable vehicles needs to include some imperative factors. The factors include cost savings, safety, and efficiency in fuel consumption. The integration of education helps to improve the value of brand equity of BMW.
Competitive Advantage
BMW has followed several strategies to ensure it remains to be the world’s choice of luxury vehicles. The company has accomplished many plans such as focusing on change of its strategy within the corporate culture. BMW has developed and built its strategy model through engaging in partnerships and collaborations with other automobile companies. Interacting closely with the consumers has helped to build its brand identity. Therefore, it is apparent that BMW’s differentiation strategy has been effective in sustaining the company’s competitive advantage. The strategies have positioned BMW as the global market leader. BMW’s future is bright, though challenges will be present for the organization to remain competitive, maintain its brandy equity as well as accomplish its objectives.

About the Author
Nancy Bauman is a financial analyst and accounting expert. She is also an expert on business ethics and is constantly participating in university conferences as a member of the Educated Youth Movement. She regularly contributes articles related to business and loans at advanced-writer.com

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