Competitive Strategy Report: BMW, Hilton, Compaq, Nestle Analysis

This report examines the competitive strategies of BMW and Hilton Hotels in the context of global branding, and Compaq and Nestle concerning target markets and modes of entry. The analysis includes how these companies apply strategic theories and offers critical evaluations of their approaches. For BMW, the report highlights its focus on product differentiation, particularly through digitization and design, and its competitive advantages in achieving status and providing post-sales service. Hilton Hotels' strategy centers on service differentiation, digital hospitality, and international expansion, although it faces challenges like debt accumulation. The report also discusses Compaq's focus on the computer hardware market, its target audience, and distribution strategy. Nestle's strategy involves a focus on nutrition and wellness, with a dedicated unit for claim-based businesses. The report provides insights into each company's strengths, weaknesses, and the factors contributing to their success, offering arguments to support the findings.

Running head: COMPETITIVE STRATEGY
Competitive Strategy
Name of the Student
Name of the University
Author Note:

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Executive Summary:
The report gives a brief overview about the competitive strategy of BMW and Hilton Hotels
in global branding. There is discussion on how the two companies successfully apply the
application of the theory. The report also does critical evaluation. There is also a mention for
the reason for the success of the company and along with necessary arguments. The report
also discusses the competitive strategy of Compaq and Nestle in target market and their
modes of entry. Here also the report discus how the two companies successfully applies the
theory long with critical evaluation. The reason for the success of the company with
necessary arguments is also provided in the report.

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Table of Contents
Introduction................................................................................................................................3
1. Global Branding.....................................................................................................................3
BMW......................................................................................................................................3
Hilton Hotels..........................................................................................................................5
2. Target Market and Modes of Entry........................................................................................6
Compaq...................................................................................................................................6
Nestle......................................................................................................................................8
Conclusion................................................................................................................................10
References:...............................................................................................................................10

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Introduction
The report discusses about the competitive strategy of BMW and Hilton Hotels in
global branding. In the report discusses how the two companies successfully apply the
application of the theory. There is also a critical evaluation done which is mentioned in the
report. The report also mentions the reason for the success of the company and necessary
arguments provided. There is a mention of the competitive strategy of Compaq and Nestle in
target market and modes of entry. Here also the report discusses how the two companies
successfully apply the application of the theory. There is also a critical evaluation in the
report. The reason for the success of the company with necessary arguments is also provided
in the report.
1. Global Branding
BMW
Bayerische Motoren Werke (BMW) is a world renowned automobile brand
headquartered in Munich, Germany. The company manufactures automobiles, motorcycles,
aircraft engines and also some premium product that includes BMW mini and Rolls Royce.
The fame of the company lies in providing luxury cars to international clients. The business
strategy of BMW is characterized by differentiation of products with primary focus on
digitization and design (Baines et.al 2012). In this context, this can be said that electro
mobility is the latest technology adopted by the company in differentiation of products. Based
on the technology the company introduced a fully electric and a plug in hybrid model. The
competitive strategy of the company also focuses on individual mobility that is combined
with high end mobility services. The company also believes in aligning its high profit levels
in perspective of short term by increasing the longevity of the company in times of change.

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The four strategic areas that the company believes in includes growth, profitability, access to
technology and customers and shaping the future.
BMW happens to rank among top 5 companies in the German Corporate Index. Even
the company is ahead of its competitors Volkswagen and Daimler in terms of customer
satisfaction and market share (Rao 2017.) The Company believes in following a production
strategy that is local and at the same time is committed towards a long term strategy of
market penetration. BMW also makes use of completely knocked down process (CKD)
where the company imports various parts and components from various international and
local assemblers.
The company also puts forward a slogan which is ‘sheer driving pleasure’ that defines
a great driving experience. Thus, it can be said that BMW has obtained a competitive position
in the market where the company can be ruled by a team who not only raise the price but can
gain a market position which is strong (Nagle, Hogan and Zale 2016). The strengths of the
company lie in its high potential for growth, profitability, customer loyalty professional
management team and excellence in service. The company has maintained high speed growth
through constant innovation technologically and also through constant product mix
optimization.
Thus, the competitive advantage of the company is based on various factors that is
mentioned as follows (Booth 2014):
1. Achievement and Status Representation: BMW is a premium car brand and
therefore possessing BMW model considered not only as a sign of achievement but also a
symbol of social status.

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2. Integration of effective features and design into each car model. The effective
features and design includes sophisticated style, attractive aesthetics, rounded radiator grille
and Hofmeister kink where the counter curve in the window outlines the base of rear roof
pillar.
3. Maintains Competitive Post Sales Service: The Company received an acclaim for
out of the box after sales customer service.
However, research and development also plays a vital role in the sustenance of the
competitive advantage of the company. Therefore, in 2015, the investments in research and
development were raised by EUR 136 million. Nevertheless, it has to be noted that the
competitive advantage of BMW might face challenges for sustenance in long run because
competitive advantage sustainability is dependent on the ability of the company for
introduction of innovative products, capabilities and features on a regular basis.
Hilton Hotels
The Hilton Hotels believes in service differentiation to gain competitive advantage.
Therefore the company tries to differentiate its service based on quality, maintenance of
highest standards and also integrate with information technology (IT) in various aspects of
service provision(Alon, Ni and Wang 2012). The company also believes in gaining
competitive advantage by paying attention to their clients and thereby adopting the right way
of treating them consistently.
The Hotels also believes in following digital hospitality that is considered as one of
the main reasons for them to gain competitive advantage (Luck and Lancaster 2013). The
digitization efforts of the company is applied to mobile services, booking channels, data
driven and loyalty personalization, privacy and guest experience. In addition to this the
effective integration of the digitalization points leads to creation of additional synergetic

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business impact. The Hilton hotels also have high performance benefits that combine access,
power of scale, innovation and reputation.
The competitive strategy of the company also lies in the fact that the company
believes in extensive expansion internationally. This strategy has enabled Hilton Hotels to
add more than 100,000 rooms in its portfolio itself in the year 2015 including 14500 rooms to
be converted from independent hotels and competitor brand.
However, the competitive strategy of expanding internationally and service
differentiation has resulted in a debt accumulation of USD10.5 billion that included USD726
million non recourse debts by the end of the year 2015. Thus, in order to sustain its business
strategy it is required by the company to make financial investments from time to time in
spite of the volatility of the revenues that is caused by the cyclical and seasonal nature of the
business(Xiao, Neil and Mattila, 2012). However, the company might find it quite
challenging to sustain its competitive advantage in short term and long term perspectives
since competitors can follow the same and eat on its market share. Corruption is another
factor that tries to hamper business environment by increasing its cost. The corruption factor
also threatens the consumers since the higher cost gets converted to higher price.
For better sustainability of the competitive advantage the company must allow its
customers to put across queries and orders online (Verhoef and Lemon, 2013). The company
should also diversify portfolio in order to avoid any risk that associates with higher real estate
cost. These portfolios include risk free financial assets such as treasury bills. Thus, the
company should use opportunities in wisely so that they do not become future threats for the
company.

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2. Target Market and Modes of Entry
Compaq
Compaq has been one of the leaders in computer hardware industry during 1980s. The
name remained synonymous with producing high quality and cutting edge products
(Brondoni 2014). The premium pricing of the company’s product allowed most of its
competitors to outspend on research and development so that the target market benefits from
its products. The target industry of Compaq is the computer hardware market.
However, with the advancement of technology and marketplace, the company found it
increasingly difficult to quote a premium price for its offered products. Moreover, the
increasing computer literacy also made people aware that it was unnecessary to pay such high
prices for the products offered in an era of hardware and software advances. Moreover,
economic crisis also posed as a hindrance as most clients were looking out for ways to get
products that were high end at pocket friendly prices (Rao 2017). The organizational culture
of the company also posed as a hindrance due to lack of communication between various
departments.
Nevertheless Compaq is a research and development driven company that has not
only left behind its rivals but is also responsible for making state of the art computers for its
customers (Constantinides, 2014). The company is considered a high quality producer of
portable computers and desktops. However, for Compaq products, demand still remains
greater than the supply of products
The offerings of Compaq are based on psychographic factors and geographic factors.
The company mainly targets people who are mainly tech savvy like the executives and
professionals. The company also makes the channel of customer engagement strong so that it
can remain ahead of other companies (Chernev, 2015). The company also tries to create a

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strong customer connection and after sales service that differentiates the company from its
competitors. The position of the company is based on price and positioning strategies of the
user.
The company operates and undertake sale of its products in more than 170 countries
thereby creating a global presence. The company not only provides worldwide services
related to information technology and devices for computation with a support of a huge work
force. Moreover, the company also provides a diverse portfolio for both the retail and
enterprise customers that consist of not only computers but also printers. However, the
software development, network, data analytics and information technology related
infrastructure that company does for the enterprises also helps it to generate an enviable
revenue compared to its competitors.
The company follows the Boston Consulting Group (BCG) matrix and operates in two
business verticals one that is for customers and second that is for commercial purpose. The
product categories of the company under these verticals include printing products and
personal computing imaging technologies and enterprise solution. The personal computing
receives a commendable score in the BCG matrix whereas the products for printing and
imaging as well as the solutions for enterprises remain a question in the BCG matrix.
The distribution strategy of the Compaq is based on business modalities to have an
effective global presence in increasing number of countries. The company also believes in
brand equity but the after becoming one of the sub brands of Hewlett and Packard (HP) it has
somewhat lost its individual identity of one of the largest manufacturers of personal
computers. Therefore, the products of the company is under HP and therefore lost its essence

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Nestle
Nestle is synonymous with not only providing food and nutrition but also ensuring
health and wellness. The company recently created Nestle Nutrition for strengthening its
focus on the business of core nutrition provided by its products (Sethi, 2012). The company
also believes in becoming one of the leaders in the market which they also treat as one of the
primary elements of the corporate strategy. Nestle operates in a market where the primary
motivation for the customers depends on the claims made on the nutritional aspect of a
product.
Thus, the newly created Nestle Nutrition has been empowered with acting as an
autonomous global unit that undertakes profit loss and operational responsibilities of claim
based business like Health care Nutrition, Infant Nutrition and Performance Nutrition. The
unit is also responsible for delivering high end business performance through science based
and trusted services and products to its clients.
On the other hand, The Corporate Wellness Unit is designed for integrating nutritional
value that is added in their beverage and food business (Babatunde and Adebisi, 2012). This
needs driving the nutrition, wellness and health across all their food and beverage businesses
of the company. Therefore, the unit helps in horizontal coordination, address current
customer problems and also anticipate future trends of consumers.
Nestle is a global organization therefore their competitive focus remains in adopting
an international strategy. The competitive strategies of the company are associated with
foreign direct investment in other food and dairy business. The company also targets in
balancing sales that has low risk in countries with low growth and high risk in markets that
have potential high growth (Finster and Hernke 2014). The company also seeks to find out

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ways for profit in the high risk countries but does not take chances that involve risk factors
just for the sake of growth. The process of hedging adopted by Nestle not only keeps its
growth steady but also makes share holders happy.
However, while operating in developed market the company ensures growth and gain
in economies of scale by the use of foreign direct investment in bigger companies. Thus, in
the developing countries the company also strives to get a market share through manipulation
of either processing technology for local conditions or ingredients.
Nestle also follows another strategy that has proved to be quite successful. This
involves getting into a striking strategy partnership with one of the bigger and renowned
corporate giants. Thus, the company entered in an alliance with Coca Cola in the year 1990
for capturing market for its ready to drink coffee and tea (Payaud 2014). This will not only
help Nestle to benefit from Coca Cola’s bottling system but also gain expertise in preparing
beverages. The company however considers the Americana and European food markets as
competitive and flat therefore the company is in search for better and newer markets that will
ensure better growth.
Nestle also have a comfortable debt equity ratio and stronger cash flow that allows it
to undertake take over. The company therefore, acquired Indonesia’s largest noodle producer
known as Indofood. The company did so with the focus of expanding the sales in market of
Indonesia and will also ensure measures for exporting Indonesian food products.
The company also applies a wide range of strategies for Asia that includes production
of different products in a particular country in order to ensure sufficient supply of the
products manufactured.

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Conclusion
The report ends by discussing the competitive strategy of Nestle in target market and
modes of entry. Similar discussion is done for Compaq along with a critical evaluation,
reason for the success and necessary arguments. Further, there is also discussion on the
competitive strategy of BMW and Hilton Hotels in global branding. Here also there is critical
evaluation done along with reasons for the success mentioned and necessary arguments.