- Internal Code :
- Subject Code : Hl6006
- University : Holmes Institute
- Subject Name : Competitive Strategy
Week 2 – Germany Luxury Cars
PESTLE Analysis of BMW
BMW is the world's best and well-known luxury vehicle brands. The parent company of BMW, which is also known as the BMW AC, is based in Germany, Munich. This company also owns two other premium brands, which include Rolls-Royce and Mini. There is no doubt that 2018 was a very tough year for all the auto brands around the globe, but despite all the challenges, BMW performed exceptionally. To sustain its growth consistently, the company has been focusing on technological innovation as well. The performance of BMW in 2019 was better than the previous year, and they have survived a crucial phase. For a better understanding of the company, PESTLE analysis is depicted below(Pratap, 2019):
Political Factors
The growing role of regulatory agencies and government in the era of international business has made it essential to focus on the political factors which help in understanding the context of the company. It has been assessed that BMW was affected by two of the political factors in the year of 2018 and 2019. These two political factors include Trade wars and Brexit. The company has revised all the business strategies to consider when it comes to the downward pressure, which was created by these factors as trade conflicts made it so challenging in 2018 for the whole industry. Somehow, BMW still maintained itself and proved to be versatile in every field of life, which has increased pressure effectively(Pratap, 2019).
Economic Factors
The global economic environment has been impacting the business of automobile industry. The major performance of local economies and the general economic environment has been tremendously affecting the business performance of
BMW as a whole. It was evaluated in 2018 that the motorcycle sales and automobile sales of this company reached the heights of records, and the business performance got effected by these economic factors(Pratap, 2019).
Sociocultural Factors
Culture and society play the role of central when it comes to international business. It's very imperative for these companies to perform well in the internal environment by watching these cultural and social trends and changes. Digital technology has been modifying the society and lifestyle of people. BMW has been utilizing digital technology which is helping them in providing their consumers a superior experience which is changing the desires and needs of customers as they have also adopted one of the business strategies which will suit the expectations and needs of their employees as well which would help in maintaining the environment of the company as well(Frue, 2019).
Technological Factors
Technology has been playing a prestigious role in driving growth for companies like BMW. There are some of the technological factors which are being the core of consumer experience. BMW has been investing in digital technology, which is making the BMW cars a better and safer experience for its customer tap and base into new consumer segments as well. BMW has been using a global website with some regional websites as well, which is helping to access its consumers, which is shaping the growth of the automobile industry as well(Frue, 2019).
Environmental Factors
Sustainability and environment have become the major factors that are affecting the popularity of the vehicle industry. Companies have been concentrating on managing carbon footprint and environmental impact. BMW has been investing in managing the footprints as well by the contribution of sustainability strategy, and the company has been getting an advantage by the side of government for reducing the carbon footprints as well(Rodrigo, 2012).
Legal Factors
BMW has some particular compliance committees which are taking care of compliance and legal issues, which are ensuring no legal annoyances. BMW has been getting consistent success due to the attributed responsible behavior regarding the lawful conduct of its business in the global market.
Week 3 – Zara Case
Tangible and Intangible Resources Zara is a well-known and international product within the retail industry of fashion, which is headquartered in La Coruna, Spain. After assessing the mini case study of Zara, it has been identified that this company has develop a very responsible and exclusive supply chain which is helping them in enabling the delivery of new fashions with the emerging trends as well. They have been delivering new products two time in a well around its 1,763 stores around the globe which is nothing but an amazing success for the company. The major idea of the company was built by the contribution of Amancio Ortega, who is the third richest man around the globe.
Zara has so many tangible and intangible resources and capabilities that are valuable, rare, and are not easily manageable and imitable. The tangible resources of the company include the dyeing operations and own factories as well. For instance, this factor is not so usual and common resource within this industry for this matter. The intangible resources include a creative and quick design team, effectively managed supply chain, unity of operations, and unique online strategy. All the features which have been identified in this matter are very challenging to substitute, especially when it comes to unison as this company has been doing exceptionally. In the end, it can be said that the core competency of this company is highly sustainable(Worstall, 2015).
Week 4 – Apple vs. Samsung mini-case
Differentiation Strategy for Implementation of Apple
Apple has been attempting to increase its marketing demand by the contribution of its products through the differentiation strategy, which helps in entailing its products attractive and unique for its consumers. By concentrating on consumers' willingness to maintain a premium price and paying more at the cost of unit volume. Apple has also been setting some artificial entry barriers to particular competitors(Hanks, 2018). There are so many companies around the globe who have been using product differentiation strategies and marketing strategies, which helps in distinguishing their products from the side of their competitors. Apple has been employing a differentiation strategy, which is helping them to target their sections of consumers in the market and deliver a powerful message which helps in making their product stands out in the market. Apple has been implementing this strategy by entailing its making of products through some very unique and attractive ways. They sell their products directly to consumers through online stores. They have been employing a verity of third-party cellular network carriers and indirect distribution channels as well(Nielson, 2014).
Week 5 – TESCO PLC
Competitive Behavior Response to Build Its Competitive Advantage
Woolworth and Coles are the well-known competitors of Tesco. Competitive responses and actions Tesco has written down particular value of various global operations by utilizing US$3.3 billion in the year of 2013. The competitive behavior responses of this company to defend its competitive advantage and improve its marketing position has been helping them to gain a competitive advantage in the market. The success of this organization can easily be measured by the productivity level. There are so many organizations that have been putting their fullest to achieve a competitive advantage in the market. Tesco has been getting a competitive advantage by competitive behavior response by depicting very low prices by providing excellent services, which is rationalizing higher prices as well(Sewell, 2013).
The company has been getting a competitive advantage through the contribution of three strategies, which include focus, cost leadership, and differentiation, which are helping them in improving their position in the market effectively. They have also been responding to build its competitive advantage by the contribution of their slogan, which states "Every Little Helps," which contributes to branding their products with bold and striking logo. This company is known as one of the very few supermarkets that have been containing diversification around the stores as a whole. They have been offering household appliances, car insurance, and kitchenware, which is making them think to expand their business and opening some new and separate stores, which would help in attracting more consumers as compared to other competitors of the company(Naveen, 2020).
Week 6 – LVHM
Reasons behind the Diversification of LVHM
LVHM was so concentrated on finding its corporate strategy, and they found it as diversification into an exceptional variety of particular luxury products. They planned to group their brands among six diverse units of business. They were focused on getting a competitive advantage, and this is one of the reasons behind the diversification process. Their spirits/wine unit possessed a great and number on cognac/ champagne, and most imperatively, this diversification of business units was consistently showing the sign of a growing market. There are some other reasons as well, which are justifying the facts behind the diversification of LVHM. They didn't want to get caught in the crossfire, and this is one of the reasons they have been producing some of its products and services in China even though the company was based in Paris(Sun, 2019).
High end-luxury was another recession-proof, which states that the diversification process of this company has done so much exceptional in the market, which has contributed to maintaining the revenue of this company and their relative brand as well. There were some of the bears who have been saying that aftershocks the trade war can easily throttle customer spending in Chine, United States, and other markets as well. They always wanted a well-diversified portfolio which can help them in maintaining their position in the market as well, Dividends and Buybacks was also one of the most imperative reasons which made LVHM make six diverse business sections and units for their company, and this wasn't a bad idea as the only thing which this process has depicted is advantage and benefit(Sun, 2019).
References for Competitive Strategy
Frue, K., 2019. PESTLE Analysis of BMW: Shaping the automotive industry. [Online] Available at: https://pestleanalysis.com/pestle-analysis-of-bmw/
Hanks, G., 2018. Apple Differentiation Strategy. [Online] Available at: https://bizfluent.com/way-5815745-apple-differentiation-strategy
Naveen, K., 2020. Tesco. [Online] Available at: https://www.scribd.com/document/234218992/Tesco
Nielson, S., 2014. Apple’s Premium Pricing Strategy, Product Differentiation. [Online] Available at: https://marketrealist.com/2014/02/apples-premium-pricing-strategy-product-differentiation/
Pratap, A., 2019. BMW PESTEL ANALYSIS. [Online] Available at: https://notesmatic.com/2019/09/bmw-pestel-analysis/
Rodrigo, 2012. Strategic Analysis (PESTEL, Porter and SWOT) of BMW. [Online] Available at: https://writepass.com/journal/2012/11/strategic-analysis-pestel-porter-and-swot-of-bmw/
Sewell, T., 2013. Tesco - Competitor Advantage. [Online] Available at: https://prezi.com/2jzbq2165bly/tesco-competitor-advantage/
Sun, L., 2019. 4 Reasons LVMH Is a Great Defensive Stock for a Trade War. [Online] Available at: https://www.fool.com/investing/2019/05/16/reasons-lvmh-great-defensive-stock-for-trade-war.aspx
Worstall, T., 2015. Inditex's Zara And The Power Of Comparative Advantage. [Online] Available at: https://www.forbes.com/sites/timworstall/2015/06/07/inditexs-zara-and-the-power-of-comparative-advantage/#5798eee47e27
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