DQ1_WK7 Essay Example | Topics and Well Written Essays - 750 words

DQ1_WK7 - Essay Example The product selected for analysis is BMW cars. BMW is company dedicated to the manufacturer and distribution of luxury automobiles across the world. The German based corporation has its corporate headquarters in Munich, Germany. Their vehicles are recognized for their quality, great aesthetic look, performance, and luxurious interiors, and reliability. BMW owners are very loyal to their vehicles and the company. For them owning a BMW automobile is an unmatchable experience. The cars produced by BMW go for a hefty price. The cheaper models retail for around $35,000, while the more upscale models cost more than $150,000. The overall quality of the vehicles and support the company gets from its enthusiastic customer base allows for high retention in value of used BMW vehicles. The strategy that is most aligned with the product produced by BMW is a focus differentiation strategy. The reason BMW should follow a focus differentiation strategy instead of regular differentiation strategy is that the company concentrates on narrow segment of the market. In essence BMW cars are niche marketplace in the auto industry. A niche marketplace is focused, targetable portion of the market that addresses a need for a product or service that is not being address by other mainstream providers (Ward, 2008). Due to the fact that companies who adapt a focus strategy product their products on a smaller scale their bargaining power with supplier is lower that other firms within the industry. For example a automobile producer such as Honda which produces millions of units yearly of many different models can achieve greater economies of scale than what BMW can realize. Despite this constraint the fact that BMW effectively utilizes a differentiation focus strategy allows the firm to pass higher costs on to customers since close substitute products do not exist (Quickmba, 2008). BMW due to the uniqueness of their vehicles has been able to build up