Limitations and Strength of Bmw Using Porter Generic Strategy

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Submitted by to the category Business and Industry on 03/05/2009 05:01 PM

This essay describes the limitations and strengths of BMW using Porter’s generic strategy concept (Porter, 1985), the strategy clock (Johnson et al, 2005) and the strategy cube (Jenkins, 2005). This essay further explains the extent to which the resource configuration and culture of BMW supports the market strategy of the industry and the competitive advantage of the industry.

The Bayerische Motoren Werke (BMW) is one of the pioneers of automobile industries. With the three brands, BMW, MINI and Rolls-Royce Motor Cars, the BMW Group has its sights set firmly on the premium sector of the international automobile market. BMW motors successfully operate in more than 150 countries around the world. There are 70,000 employees in BMW Group production across the world use modern technology and thousands of parts to produce BMW vehicles. BMW Group manufactures models at 23 production and assembly plants and has 39 sales subsidiaries in 13 countries on four continents. Countries where BMW Group has plants include the UK, USA, Germany, China, Brazil and South Africa. (www.bmwgroup.com/) Thus, these are the important factors that make BMW Group is most significant in automobile industry.

Generic Competitive Strategy

Porter says “the fundamental basis of above average performance in the long run is sustainable competitive advantage” (porter 1985). BMW Group identified growth and what they represent and by following a clear strategy of brand identification helped BMW Group to sustain in the market for a long run. BMW Group was keen on both internal and external market strategy.BMW Groups breathtaking design is an important external strategy for growth and its success (www.fastcompany.com).

BMW Group belongs to the differentiation in the generic strategy. As porter quotes “ In a differentiation strategy , a firm seeks to be unique in its industry along some dimensions that are widely valued by buyers, it selects one or more attributes that many buyers in an industry...

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