Holmes Institute HI6006 Competitive Strategy Tutorial Submission

This report analyzes competitive strategies through the examination of several business cases. It begins with a PESTEL analysis of BMW, exploring the political, economic, social, technological, legal, and environmental factors impacting the company. The report then identifies both tangible and ...Read More

Competitive Strategy-
Tutorial Submission

Table of Contents
INTRODUCTION...............................................................................................................3
Tutorial questions – Week 2..............................................................................................3
PESTLE Analysis of BMW.............................................................................................3
Tutorial questions – Week 3..............................................................................................4
Identification of Tangible and Intangible Resources of Zara.........................................4
Tutorial questions – Week 4..............................................................................................5
Implementation of differentiation strategy by Apple.......................................................5
Tutorial questions – Week 5..............................................................................................6
Competitive behaviour responses of Tesco...................................................................6
Tutorial questions – Week 6..............................................................................................8
Reasons of LVMH Diversification..................................................................................8
CONCLUSION...................................................................................................................8
REFERENCES................................................................................................................10

INTRODUCTION
Competitive strategies are strategies which are designed and implemented so
that companies can stand strong in competition. There are several other reasons like
increasing customers and market share through competitive advantage of the company.
In order to analyse competitive strength and strategies this report will discuss some of
the cases which include external analysis of opportunities and threats for BMW.
Tangible and intangible resources of Zara, differentiation strategy which has been used
by Zara, Tesco’s competitive response and reasons for diversification of LVMH will also
be discussed in the report.
Tutorial questions – Week 2
PESTLE Analysis of BMW
Political
Political factors affecting BMW is increasing role of government in regulating
international business. This becomes more difficult in conditions of political unrest in the
countries where BMW functions. This is a threat as political uncertainties might affect
business and its operations and their changing norms and regulations can negatively
affect business of BMW (Gheibi and et.al., 2018). Brexit is an example of political
uncertainties affecting businesses and BMW also gets affected because of that. Trade
disputes within countries and political unrest in two countries also affect BMW
negatively.
Economic
BMW is a luxury brand and this is why economic condition of the world has direct
impact on the functioning of the BMW. Along with this it also gets affected because of
individual economic condition of the countries also affect business of BMW. In relation
with this improving economic condition of developing and emerging economies present
a very good opportunity for BMW because of increasing income per capita.

Social
This environment presents several opportunities for BMW as trend of buying
luxury cars and cars as a sign of financial standard present opportunity for BMW. Along
with this trend of customer-business relationship also present opportunity and BMW can
take advantage of them and increase its business (SHTAL, 2018). New age customers
also look for products which can provide differentiated experience and BMW can give
that experience to its customers.
Technological
Technology playing major role in growth of business and this environment also
presents several opportunities for BMW. By employing latest technology in its vehicles
and in its operations both BMW can take advantage from this environment. Autonomous
driving is one of the latest and trending terms in automobile technology and BMW can
take advantage and increase its customers and expand into new customer segments.
Legal
This environment possesses several threats for BMW as legal environment can
affect business operations significantly. This becomes more difficult when companies
are global as they have to deal with legal conditions of various countries. It is very
important for firms to comply with all regulations to stay away from legal issues. Major
legal issues affecting BMW are safety, pollution and carbon emission regulations etc.
Environmental
Environment has become major concern for the world and in such situation only
those vehicles which are not affecting and damaging the environment are given priority
by the customers (Gheibi and et.al., 2018). This requires that BMW present its vehicles
which are environment friendly and sustainable.

Tutorial questions – Week 3
Identification of Tangible and Intangible Resources of Zara
Resources are important and foundation for functioning of the business and
these consist of both tangible and intangible resources. Tangible resources are those
which can be seen and are in physical form. Intangible resources are those which lack
physical substance and cannot be seen. Zara has both type of resources and Tangible
Resources of Zara are;
Inventory- This is tangible resource of Zara and Zara maintain and manage this ensure
vary carefully as to attract customers and ensuring their frequent visit and also frequent
buying (Jawed and Siddiqui, 2019). This means that Zara keep its inventory low and this
is the reason that customers when visit stores of Zara they buy the product and item at
the very time as they may not find it tomorrow.
Technology and Machinery- This is another important resource of Zara as technology
and machinery employed by the company plays important role in its production
capabilities. Effectiveness of this resource is visible when company can deliver the
products at fast speed it is also important that it is able to produce at the fast speed as
well.
Intangible resources of Zara are;
Intellectual capabilities- Zara’s designers have great intellectual capabilities that they
are able to create three items of clothing a day. Zara also gain competitive advantage
from fast fashion and giving its customers items before its competitors. They are able to
do so because of capabilities and ability of the designers which are its main and
significant asset.
Effective managed supply chain- This is another intangible resource for Zara as its
supply chain is very effective and contribute and add value to its business strategy
which involves fast fashion to provide frequently (Khan, Yang and Waheed, 2019). Zara
ensures to deliver customized orders to its stores within 24 hours in Europe, Middle
East and US and 48 hours for shipment in Asia and Latin America.

Unique online strategy- Online strategy is very important for success in present
business environment and Zara has also adopted the online strategy. Online strategy of
Zara is unique because it spend less on advertisement and focus on cheap fashionable
approach. Other than this Zara also follow strategy in which rarity for individual piece is
presented to customers and this also gives feeling of individuality. This unique online
strategy of Zara is an important intangible resource capable to sustain for long term in
market.
Tutorial questions – Week 4
Implementation of differentiation strategy by Apple
Differentiation strategy is that in which products and services of the firm have
clearly distinct characteristics from its competitors. Apple is one of those firms which
have managed to apply this strategy very effectively and its products are distinct from
other products in its industry.
In differentiation strategy Apple create new markets and then dominates these markets
are first mover in the market. Apple keep its prices at premium and this effectively
represent its differentiation from other products of the industry (Vermeulen and et.al.,
2020). Premium quality and different from others in its features Apple attracts its
customers by presenting its products in unique way. By its differentiation strategy Apple
has managed to create hype before launch of its products and this also attracts and
retains loyal customers. Differentiation strategy of Apple involves;
Product Design- Design of the product is most outer part of the products which is
visible on the first glance and Apple has started its differentiation from the design of its
products design. Product of Apple displays a different visual style and stand out from
the products which are offered by the competitors. Design of Apple is hallmark of its
strategy and includes so many features and functions in one package.
Pricing strategy- Pricing strategy of Apple is also a major part of its differentiation
strategy. High price of the products reflect and communicate high quality of the product
and this is the reason that price of Apple products has been kept high. Lowest price of

the Apple products fall in mid range but customers of the Apple are willing to pay high
price for a better user experience. High price of the products give a sense of higher
value of the product.
While implementing its differentiation strategy Apple do not focus on new product
innovation but major focus of the company remains on few highly differentiated products
which result marketing wonders and also enable Apple to control the resources, cost
and maintain stability (Semuel, Siagian and Octavia, 2017). This way Apple has
differentiated its products from its competitors and provides value to the customers and
has become sign of high quality and better customer satisfaction.
Tutorial questions – Week 5
Competitive behaviour responses of Tesco
Present business environment does not simply allow firms to gain competitive
advantage with differentiated characteristics but it also requires that firm is able to
defend its competitive advantage in the market. Tesco is one of the biggest
multinational retail firms and this why has successfully managed to respond to
competitors. Tesco is world’s third largest retailer and this fact alone is enough to
communicate about competitive strength and capability of the Tesco (Hughes‐Morgan
and Ferrier, 2017). Tesco has managed to compete strongly in both markets home
country and in international market. But as the fact that success of a firm at a point of
time does not guarantee its future success and this also happened with Tesco and
Tesco has too face competitive struggles. Tesco faced several struggles in which profit
started falling and along with that revenue of the Tesco also started falling. Revenues
started declining in home market of Tesco. The problem behind this was customer
service that perception of customers about Tesco’s quality, price, promotions and
overall value for money had deteriorated. Later on this basis of the Tesco took actions
which included employing better and trained staff in customer service in its stores,
refurbishing the stores and also included revamping its product lines and changed the
prices which were being charged from the customers.

In this revamp of the products line and changing the prices which were being
charged from the customers were part of tactical actions and strategies. Entering the
US market with fresh and easy concept was on contrary part of its strategic planning.
For success in global market entering US market was a reasonable action and decision
of the Tesco. But this strategic decision was not successful and did not appealed to
American consumers.
Later to stand strong in competition Tesco adopted and employed some strategies
which are;
Competition on Price
This strategy worked in favour of Tesco and it started to compete on the basis of
lower price with its competitors to gain market share and increase its customer. This
also required Tesco to rebrand its own-label offerings.
Maintaining Quality
Quality is significant and this is why Tesco compete with discounters on the basis
of price but this cannot be only basis for competition (Pula, 2018). Quality is also
important for competition and this also plays important role in displaying positive image
of the Tesco.
Customer Service
This is also important and in relation with Tesco customer service played key
role. This is because giving improved customer experience in-stores so that they spend
more time at store.
Tutorial questions – Week 6
Reasons of LVMH Diversification
Diversification refers to diversification with new products and diversification in
new market. This all is because presently products of the company do not perform as
expected and along with that company can also gain customers from a diversified

market. There are some of the reasons because of which LVMH diversified its products.
Some of the reasons for diversification are;
The first reason for doing so was that recurring profit of LVMH in fashion and leather
goods started to decline (Daud, 2017). Along with decline in fashion and leather goods
jewellery and watches sales started to increase. In context of jewellery and watches
sale LVMH has limited presence. Later the company separated the jewellery group and
watches group.
Reason for diversification for LVMH was also because LVMH could not expand too fast
as this might tarnish the image and brand of LVMH as being too accessible and this is
not good as luxury brand should not be too accessible in order to maintain their brand.
This is why to increase customers diversification was a suitable strategy for LVMH.
Diversification also allows LVMH to take advantage from common strategies and
diversified customer segments which were not catered by LVMH earlier (Mackey,
Barney and Dotson, 2017). This also contributes in sustainability and long term success
of the firm.
CONCLUSION
On the basis of above it can be concluded that competitive strategies consist of
various factors which are external factors and identification of opportunities and threats.
This are important and become basis for competitive strategies. Another important
played in competitive strategies is role of resources both tangible and intangible
resources. Intangible resources contribute in developing and designing what to do and
tangible resources contribute in making them possible. Later differentiation strategy was
discussed and it is a competitive strategy. Tesco’s competitive behaviour to defend its
competitive advantage was also discussed and lastly diversification of LVMH discussed
in the report.

REFERENCES
Books and Journals
Daud, W.M.N.W., 2017. CORPORATE DIVERSIFICATION AND PERFORMANCE: A
REVIEW OF LITERATURE. Editors. p.20.
Gheibi, M and et.al., 2018. Controlling air pollution in a city: A perspective from SOAR ‐
PESTLE analysis. Integrated environmental assessment and
management. 14(4). pp.480-488.
Hughes‐Morgan, M. and Ferrier, W.J., 2017. ‘Short Interest Pressure’and Competitive
Behaviour. British journal of management. 28(1). pp.120-134.
Jawed, I. and Siddiqui, D.A., 2019. What Matters for Firms’ Performance: Capabilities,
Tangible or Intangible Resources? Evidence From Corporate Sectors on
Pakistan. Evidence From Corporate Sectors on Pakistan (December 28, 2019).
Khan, S.Z., Yang, Q. and Waheed, A., 2019. Investment in intangible resources and
capabilities spurs sustainable competitive advantage and firm
performance. Corporate Social Responsibility and Environmental
Management. 26(2). pp.285-295.
Mackey, T.B., Barney, J.B. and Dotson, J.P., 2017. Corporate diversification and the
value of individual firms: A Bayesian approach. Strategic Management
Journal. 38(2). pp.322-341.
Pula, B., 2018. What Makes Firms Competitive? States, Markets, and Organisational
Embeddedness in Competitive Firm Restructuring in Postsocialist
Economies. New Political Economy. 23(4). pp.458-474.
Semuel, H., Siagian, H. and Octavia, S., 2017. The effect of leadership and innovation
on differentiation strategy and company performance. Procedia-Social and
Behavioral Sciences. 237. pp.1152-1159.
SHTAL, T.V., 2018. Methods of analysis of the external environment of business
activities. Revista ESPACIOS. 39(12).
Vermeulen, A and et.al., 2020. Business Strategy Game: Implementing and Executing
Broad Differentiation.