Creating and sustaining competitive advantage

Volkswagen uses Differentiation in order to be the market leader. The company's products are unique- most of the technologies are invented and used only by VW. Non-price attributes are used for which customers are willing to pay premium. The products and cervices are not cheap and are known to be used by people who want good and reliable product they can successfully use for their job or personal life. If you have work to do, go and buy Volkswagen. Now.

When it comes to product life cycle, Volkswagen is the best. The company releases new models every 4-5 years. They don't change the model brand but they introduce innovations in technology and design. The strategy is good because people change their cars in almost the same period, which means that the company provides them the new model to buy when they decide to change. At the same time it is a good financial strategy, as it is unacceptable to sell a new car and already used cheaper car with big price difference.  On the other hand introducing improvements works for differentiation, too, as that shows that the company cares about their customers and works hard to be the most innovative company.