Strategic Analysis and Choice - Essay Example

In 1994, BMW acquired Mini. (Seidel, 2004) It was in 1998 when BMW decided to acquire Rolls-Royce Motor for £340 million. Volkswagen outbid the said amount at the price of £430 million. However, since BMW was a supplier of engines and other components to Rolls-Royce, BMW was given the right to carry the name of Rolls-Royce name and logo. (Think Quest, 2006) As a sign of BMW competency and success as a luxury car manufacturer, BMW’s most recent financial report revealed that the company has reached a total gross profit of €5,422 million as of 2005.

(BMW Group, 2005) Established back in 1989, Lexus was launched by Toyota Motor Corporation with the purpose of creating a world-class luxury car brand. (Edmunds.com, 2007) Since then, the company has been known for its innovative engineering and meticulous quality. For many years, the company is very much focused in developing new models and other related technological innovations. Despite the fact the Lexus has only been in the global automobile industry less than 20 years, Lexus has been considered as one of the big winners of the European car market back in 2006.

(Edmondson, 2007) The company was able to increase its sales by up to 72% in 2006 with 36,662 car units within 15 European Union countries. (Edmondson, 2006) Back in 2005, Lexus together with Toyota was able to sell a total of 964,208 units as compared to BMW’s 632,396 sold units throughout Europe. (Edmondson, 2006) To give us a better insight regarding the main purpose of Michael Porter’s competitive advantage model, the researcher will discuss about the arguments of different authors concerning the accuracy and the main use of this model.

For the purpose of this study, the researcher will determine each of the company’s strength aside from using Porter’s model as part of analyzing its corresponding competitive advantages.