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Differentiation strategy by General motor corporation Free essay! Download now

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Differentiation strategy by General motor corporation

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Downloads to date: N/A | Words: 741 | Submitted: 17-Jul-2011
Spelling accuracy: 96.0% | Number of pages: 2 | Filetype: Word .doc

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Differentiation strategy by General motor corporation essay previewDifferentiation strategy by General motor corporation essay preview


differentiation is about uniqueness, establishing differentiation / advantage requires creativity


Differentiation strategies are not about pursuing uniqueness for the sake of
being different. Differentiation is about understanding customers and how
GM 's product can meet their needs. To this extent, the quest for differentiation
advantage takes us to the heart of business strategy. The fundamental issues of
differentiation are also the fundamental issues of business strategy: Who are
GM 's customers? How does GM create value for them? And how does GM do it more
effectively and efficiently than anyone else?
Because differentiation is about uniqueness, establishing differentiation
advantage requires creativity – it cannot be achieved simply through applying
standardized frameworks and techniques. This is not to say that differentiation
advantage is not amenable to systematic analysis. As have observed, there
are two requirements for creating profitable differentiation. On the supply
side, GM must be aware of the resources and capabilities through which
it can create uniqueness (and do it better than competitors). On the demand
side, the key is insight into customers and their needs and preferences. These
two sides form the major components of our analysis of differentiation.

In analyzing differentiation opportunities, GM can distinguish tangible and intangible
dimensions of differentiation. Tangible differentiation is concerned with the observable
characteristics of a product or service that are relevant to customers’ preferences
and choice processes. These include size, shape, color, weight, design, material, and
technology. Tangible differentiation also includes the performance of the product
or service in terms of reliability, consistency, taste, speed, durability, and safety.
Image differentiation are especially important for those products and services whose qualities and
performance are difficult to ascertain at the time of purchase (“experience goods”).
These include cosmetics, medical services, and education.
By offering uniqueness in its offerings, GM may inevitably target certain market niches. By selecting performance, engineering, and style as the basis on which BMW competes in the automobile industry, it inevitably appeals to different market segments than does VW. To the extent that differentiation is imitated by other companies, the result can be the creation of new market
During the 1990s, General Motors’ segmented marketing strategy that targeted each brand on a specific price bracket and particular socioeconomic category ran into increasing problems as US customers showed less and less identification with the segments GM had defined for them.
Demand analysis identifies customers’ demands for differentiation and their willingness
to pay for it, but creating differentiation advantage also depends on a firm’s
ability to offer differentiation. To identify the firm’s potential to supply differentiation,
we need to examine the activities the firm performs and the resources it has
access to.

Pros and cons

A strategy use by GM to seek competitive advantage through uniqueness (develop goods and services that are clearly different from those made available by the competitors)This strategy requires organizational strengths in marketing, research and development, technological leadership and creativity ...

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