Strategic Management On BMW

Table of Contents

Executive Summary

INTRODUCTION

AIM & OBJECTIVE

CORPORATE STRATEGY
Market Penetration
Market Development
Product Development
Diversification

CHOICE OF CORPORATE STRATEGY: MARKET PENETRATION

BUSINESS STRATEGY
Michael Porter’s Competitive Strategy

COST LEADERSHIP

DIFFERENTIATION
Focus or niche strategies
Cost-focus strategy
Differentiation-focus strategy

CHOICE OF BUSINESS STRATEGY: COST LEADERSHIP

EVALUATION OF THE STRATEGY AND RECOMMENDATION

SUITABILITY

ACCESSIBILITY

FEASIBILITY

RECOMMENDATIONS CRITERIA

REFERENCES

Executive Summary

This report is based on strategies which are utilized by the organization for creating long-term sustainable growth with competitive advantage. In this report, researcher has given its consideration upon UK automobile sector, especially BMW (British Motor Works) has taken into account. Moreover, it will assist to understand internal & external strategy of BMW through critical analysis based on attractiveness & distinctness in automobile industry to suggest suitable strategy for the organization. For giving a deep understanding of corporate strategy & business strategy of BMW, Ansoff’s corporate strategy & Michael Porter competitive advantage strategy has taken into the account by the researcher as these strategies are most effective strategies in the case of BMW. These strategies will assist to understand the market competencies & to measure the attractiveness of BMW which gives the company distinctive recognition in the automobile industry.

INTRODUCTION

illustration not visible in this excerpt

(Source: Drawback.com, 2011)

Organizations need to revisit their firm portfolio periodically to bring something new in the market to attract the consumers & to create distinctive recognition in the respective industry. According to Cummings & Worley (2014), corporate level strategy gives focus on scope & purpose of the organization & it gives consideration regarding how to increase the value of each unit of an organization whereas business level strategy is concerned about how to compete in a particular segment or market. Business level strategy helps to provide competitive advantage to the organization. Due to high competition in the UK automobile industries, companies need to create various corporate & business strategies for creating long term survival (David & David, 2016).

This study is about suggesting the suitable corporate as well as business strategy for BMW to gain competitive advantage in the same or diversified industry & to understand their effect on the current competitive environment.

This study will help to suggest the strategy which will help BMW to create differentiation in the automobile industry & to attract the consumers which will help to increase the market share for enhancing the profitability of the organization. These strategies help to understand the concept of sustainable growth & competitive advantage & to understand the competencies & distinctive approach to be used by BMW in automobile industry for improving the organization performance.

AIM & OBJECTIVE

This report aims to suggest suitable corporate & business strategy for BMW. At the same time its objective is to evaluate different corporate & business strategies & select appropriate strategies on the basis of strategic models & concepts regarding BMW.

CORPORATE STRATEGY

According to Foxall (2014), the overall scope or direction of a corporation in which its various business operations work together for the purpose of achieving a specific goals is corporate strategy. Berman & Korsten (2002) opined that corporate strategy deals in broader aspect & its formulation is not a generic approach so it cannot be copied or tailored to fit. UK automobile industry is affected by economic, socio-cultural and technological environment. So, for adding value through corporate strategy BMW needs to introduce latest model in the same market with same product with wide choice for the Benefit of the customers. For understanding the concept of corporate strategy of BMW, Igor Ansoff corporate growth strategy matrix has taken into consideration (Gangwal, 2014). Ansoff has given four possible product-market combinations which helps to focus on the present & potential market & products.

illustration not visible in this excerpt

Ansoff Corporate Strategy Matrix

(Source: David, & David, 2016).

Market Penetration

This strategy helps the firm to achieve growth in the existing market segment while using current product. The aim of this strategy is to increase the market share (Foxall, 2014).

Market Development

This corporate strategy assists the firm to grow in the new market segment through targeting its existing products (Grant, 2016).

Product Development

Firms utilize this strategy to develop new products in the existing market segments (Agrawal, 2016).

Diversification

In this strategy, the firm grows in the diversified market segment by developing new products for new markets (Verbeke, 2013).

CHOICE OF CORPORATE STRATEGY: MARKET PENETRATION

Johnson, et.al (2013) sited that entering in a new industry or targeting new product is more risky as compare to dealing in the same industry due to uncertainty. Ghalandari (2012) suggested that market penetration strategy is least risky for BMW as compare to other corporate strategies as it assists to affect the overall direction of the organization to establish the future in the working environment with existing product. It will assist BMW in dealing in the concept of simply maintaining market share by leveraging existing resources & the capabilities.

illustration not visible in this excerpt

BMW, Market Penetration

(Source: Gangwal, 2014)

According to Morrison (1992), through market penetration strategy BMW will be able to focus on the selling of products or services in the existing markets in a manner to gain higher market share to excel in the same industry with same product. By applying this strategy, BMW will be able to persuade the current customers to buy more and also will be able to influence the new customers to start buying its offerings (Porter & Heppelmann, 2014). Moreover, this strategy will assist BMW to convert the customers of their competitors.

[...]