Google and Ford Companies
Google and Ford Companies have both designed a driverless car. The article describes the current change in strategy that these two companies must adopt in order to reach its target market. Many car making companies will scramble for producing driverless automobiles in the coming year, that is 2017. For these two companies to remain relevant in the industry they need to develop a strategy that will give them an upper hand to this modern form of car production. It is necessary for these two companies to develop management strategic concepts that will be applicable in this kind of a current change in strategy. For example, Ford has teamed up with Amazon for the sake of connecting its cars to sensor-laden smart homes. Other companies like Toyota have also adopted Ford’s way of car technology. Toyota is a competitor of Apple’s Car Play and Google’s Android Auto. Toyota is a competitor to these two companies’ new car technology. As a result, these two companies need to develop strategic management concepts that will give them a competitor advantage compared to the other companies. The driverless car makers might lose their profits to the software and the owners of the data.
Google Company should adapt differentiation strategy. Differentiation strategy is a strategy that aims to convince customers to pay a premium price for their products or services by providing desirable and unique features different from their competitors. This kind of a strategy promises the customers that the product’s charge is a little bit higher but the customer will have an advantage of receiving a special and unique product or service. A differentiation strategy makes sure that it is competing on the basis of uniqueness rather than the use of a cheaper price. Google Company needs to research and start producing driverless cars that will be unique compared to the other cars that other companies are producing(Gheorghe, Katina, and Masera144).
In this scenario, many young city dwellers are changing their priorities of owning costly cars not being utilized effectively. Google Company should focus on search customers behavior changes and thus come up with inventions that will cater for such young city dwellers. Car technology competition is intense and thus Google should make use of differentiation strategy. For instance, Coleman Company is involved in production of camping equipment like sleeping bags, lanterns and stoves. The company’s equipment is known for their durability and reliability. Cheaper equipment has a higher likelihood of having problems rather than equipment of a slightly higher price with uniqueness (Hannagan 76). The same scenario applies to car lovers who would not mind paying a slightly higher price for a driverless car that will be more durable and reliable. Google should focus on providing unique quality driverless cars rather than cheap driverless cars of which is a strategy or a trend that will be followed by many companies. In the example of Coleman’s stove, the patented stove was initially developed during the World War 2. Seven decades later the stove is still in use and it has become a must have stove for campers (Hannagan 76).
Google Company also needs to communicate the value of their driverless cars’ features to their potential customers. The use of advertisements and marketing is important in this type of strategy. Google will have to build this brand in particular. Brand building efforts will have to be put in place so that the strategy can have an impact on the competitive industry (Hannagan 76).
For instance, Google Company can adapt the type of differentiation strategy that Express Oil Change. This company offers customer convenience that makes sure customers are served faster than their competitors. The company also employs full time workers who are better trained and have more experience compared to part-time employers. This as a result helps in the provision of quality work and also the company is able to earn trust from its customers. The company also uses incentives on their payroll system that communicates to their customers the number of cars serviced each day. Google Company should use such incentives which can inform the ability and the features that their driverless cars can provide. This strategy will give Google the advantage of creating an ability to gainpremium prices from their customers. Google Company will be able to enjoy huge strong profit margins that their competitors will not be able to attain (Magin58).
From the scenario Google Company will start receiving stiff competition from other automobile companies. The case study has summarized the competition that Google Company will be receiving when the driverless cars’ sector picks. Product differentiation strategy is better strategic management concepts that will see the company gain a competitive advantage over the other driverless cars’ producers. The driverless car sector is a technological advancement being aimed by many car industries. I highly recommend that Google Company adapt price differentiation strategy in this industry because the industry will be receiving a large number of competitors from other car manufacturing companies like Ford and Toyota.
Gheorghe, A. V., P. F. Katina, and M. Masera. Infranomics: Sustainability, engineering design and governance. N.p., 2014. Web.
Hannagan, Tim. Mastering Strategic Management.Houndmills: Palgrave, 2002. Print.
Magin, V. Competition in marketing: Two essays on the impact of information on managerial decisions and on spatial product differentiation. Wiesbaden: DeutscherUniversit̃ts-Verlag, 2006. Print.