Ondanks alle tijd die besteed wordt aan strategische planning, blijken de strategiën van grote bedrijven verdacht veel op elkaar te lijken. Als alle strategiën hetzelfde klinken, zijn ze ook daadwerkelijk hetzelfde? We leggen BMW en Daimler langs de meetlat.
Lees meer details hieronder (in het Engels).
Last time, we looked at how large companies’ strategy statements all sound the same. Let’s see if companies’ actual strategies are as similar. For this we will use two tests: where do companies spend their resources and do they choose a different set of activities from their competitors. The two tests come from Clayton Christensen and Michael Porter.
Clayton Christensen, quoting Andy Grove, wrote, “To understand a company’s strategy, look at what they actually do rather than what they say they will do. Real strategy—in companies and in our lives—is created through hundreds of everyday decisions about where we spend our resources.”
Michael Porter wrote, “Competitive strategy is about being different. It means deliberately choosing a different set of activities to deliver a unique mix of value.”
The proof of the pudding…
I’m going to compare two premium car manufacturers: Daimler and BMW. Where do they spend their resources, and do they choose a different set of activities from each other? What differentiates Daimler’s strategy from BMW’s?
The source information for the comparison is in their 2016 annual reports, Daimler’s corporate presentation, and BMW’s investor presentation. I have no connection to either company, nor have I ever worked with them. This view is entirely outside-in.
Daimler says they are “The No. 1 premium car manufacturer” and want to remain No. 1.
BMW says “We are Number ONE.”
So who’s number one in premium cars?
Daimler reports 2016 unit sales for the Mercedes-Benz car division of 2,197,956 vehicles. BMW report 2016 unit sales for the automotive segment of 2,367,603 vehicles. So if we take No.1 to mean “sold the most cars” then BMW can claim the No.1 position.
On the other hand, 2016 revenues for BMW’s automotive segment were €86.4M with 8.9% EBIT margin. 2016 revenues for Daimler’s Merces-Benz Cars division were €89.2M with 9.1% EBIT margin. So financially, Daimler came out ahead selling cars.
BMW says “We inspire people on the move: We shape tomorrow’s individual premium mobility.”
Daimler says “We aim to inspire our customers, to be the leaders in the area of technology and innovation, and to continue our proﬁtable growth. We intend to shape the safe and sustainable individual mobility of the future with outstanding products and services and with pioneering innovations.”
That sounds so similar that they might have shared a copywriter. Did they?
Daimler cites profound changes in the automotive industry leading towards CASE: connected, autonomous, shared & services, electric. They are developing products and services for all CASE dimensions.
BMW refers to ACES as a core element of their Strategy Number One > Next: Autonomous, Connected, Electrified, Shared/Services. They add to these the element of Customer Focus.
Clearly, both companies are pursuing the same strategic themes, under a different acronym. Given that this is an industry trend, that would be understandable, but the similarity is strong, and it continuous throughout their presentations.
Here are the snapshots from both presentations describing autonomous driving. It’s gone beyond similar, now it’s identical.
By now you are wondering if there are any differences? A few points were unique to each company.
Daimler mentioned changing their corporate culture, their drive to reduce CO2 emissions, and their development of modular drive train components to give them flexibility.
BMW mentioned customer focus and their brand framework. Both companies have separate brands for the electric range – BMW i and Mercedes EQ.
…is in the eating
So far we have looked at whether they have chosen different activities in their strategies and the answer is a resouding No. These companies do not pass Porter’s test of strategy. How do they do on Christensen’s?
In 2016, Daimler invested 5% of sales (€5.9M) in PP&Eand 6% of sales (€7.6M) in R&D. BMW invested 4% of sales (€3.7M) in PP&Eand 5.5% of sales (€5.2M) in R&D in 2016. So Daimler is investing significantly more than BMW. In their presentation, Daimler speaks of building battery plants and building their presence in China. BMW speaks of expanding in China, but does not detail their other investments. Perhaps BMW are partnering to build batteries rather than investing themselves.
They say the devil is in the details, but at this level of detail we can only conclude that Daimler and BMW have the same strategy. The difference between them will have to be found elsewhere, in their product designs, technologies, branding, dealer network, execution power and company culture.
© 2017 Veridia Consulting