Learning Portfolio Assessment: Option 6. Strategic Positioning - Essay Example

BMW differentiation strategy is an elevated quality and prestige level of their cars even if with similar specifications with competitors and customers pay a higher price for its brand (Strategic Choice, 144). DaimlerChrysler’ Dodge Viper “broke away from the mold of other American sports cars to drive the imagination of car buyers (Highfill et al, 2004)”. Toyota offers the Prius, a hybrid car that addresses environmental as well as rising fuel cost issues. Hybrid strategy is the combination of low cost and differentiation in the strategy clock (Appendix 2).

It is the “optimal balance between price and the added value perceived by the customer (Strategic Choice)”. The successful adoption of the hybrid strategy could be achieved through seeking the firm’s entire value chain (Appendix 3) for opportunities to cut down cost in all aspects of the business (Strategic Choice, 145). It is also important that a firm must focus on one strategy initially and later on adopt the other strategy as it goes along. Otherwise, the danger of combining both could lead the firm to being “stuck in the middle” where it is not successful in any of the three strategies, thus losing its competitive advantage in the process.

Such was the case of the Ford Taurus where it was not “a cost leader and it wasn’t highly differentiated (Product Differentiation, 122)”. Automotive firms who were successful in occupying the hybrid position are Toyota and somehow Mercedes Benz. Toyota started with low cost strategy by streamlining its manufacturing to cut cost and later on differentiated its product like the Lexus which offer quality and competitive pricing. Mercedes, on the other hand is a trusted brand for quality cars.

With the availability of cars in the market which competes for quality but with cheaper cost, the firm started focusing on bringing down the cost without sacrificing quality (Product Differentiation). Analyzing the automotive industry using