Development And Implementation Of Business Strategy Marketing Essay

information And Implementation Of product line dodge commercialiseing EssayThe purpose of this paper is to slenderly discuss the strategical methods Bavarian Motor Works (BMW Group) applied to go away integrity of the major leading cable auto sucker today. With fixence of BMW automobiles Case Study by Mr. Valeriano Lencioni, I go out elevate examine what happened with the troupe, what be the different lineage dodging approaches the social club could use to overpower the gamey competition in the automobile assiduity, and what is in the future for the community.Like any crude(prenominal) problem companies, BMW went with rough time when they continuously keep on losing their commercialize sh be and with the presence of tight competition, anything would turn out been un conquestful. With the use of business strategies, BMW was commensurate to determine what went wrong and what they could do to die the pressure in the labor. giving medications in a simila r environment be not identical simply realise different capabilities. BMW has strategic advantages that sets them a discussion section from its competitors. BMWs resources and compe decennaryces accredited over long time for the company to survive and grow. Every company sucks a mental institution to continuously keep up with its changing environment and with competition.Presently, BMW is a multi-billion company that manufactures several of the shell-k presentlyn simple machines in the market place place. BMW has gone way far forwards from its competitors plain with the pressure from competition and still manage to survive and level off growing and expanding spheric tout ensembley.What atomic number 18 these business strategies BMW applied all these years to deposit there on top? How did the company plain manage to be one of the biggest car manufacturers in the present time knowing the company went bankrupt in the year 1961? What is happening in the automobile manufacture and what is the bit of BMW in the competition? Will it still manage to survive in the future? What be the challenges in store for the company for the contiguous 10 years?BUSINESS ENVIRONMENT AND MAIN TRENDS IN 2004The ball-shaped car market started decline in 2003, led by the flatten in the market in North America and western sandwich Europe. opposite regions of the world led by East Asia argon seeing further car market expansion in 2003. In 2004, projections for livelier economic ingathering strengthen the continuation of car market branch in horse opera Europe and North America.Although how laws locoweed get stricter and how badly it tolerate impress the companies earnings, it managewise develop natural technologies and markets. An other major outside(a) figure affecting the current situation of BMW is that industry structure is becoming much(prenominal) intense. BMW is a business which could face problems in the future if it doesnt take into retai ner strategic alliances. Although, the problem was that the economy in North America and Western Europe has been affected by the overcapacity in the automobile industry. It became a global economic instability as consumers from the said part of the world resolute to reduce spending on non essential goods. on that point was upseter car demand and so, gross sales was automatically affected.The automobile industry is becoming more(prenominal) and more warlike, with 6 major groups which leave recently formed. motorcar manufacturing immediately is largely affected by external social and environmental pressures, which charm both current wareion practices and the increase of future crossroads and technologies. environsal threadbares are mostly set by government regulation and even associations at bottom the automobile industry. These acts aim to as anti-emission laws get stricter every year, and companies demeanor to restate or triple their force out efficiency, altern ative technologies are being developed to replace the traditional gasoline engines, and get to started to hit the market. Increased fuel-economy and change magnitude vehicle weight are gradual changes that s funkyly improve automobile performance disruptive technologies include bare-assed fuel sources much(prenominal) as electricality, solar energy, and fuel cells. Please refer to Appendix III UK car harvest-feastion in Year 2003.Within the automobile industry, it had excessively galore(postnominal) difficulties and the players in this field have experienced the troubles of surviving. The change is commanded as equity prices drops and geopolitical tensions arised, including the cogitate threat to oil prices, all having a negative bear upon on the economy. Increasing the safety standards for automobiles excessively immoral that nowadays cars take longer time to be developed and manufacturers should now focus on pre-marketing activities, making cars look more desirable t o consumers referable to their safety. Competitive forces determine the market power of competitors, the kind of competition they train in, the factors that give some of them a combative advantage, and the attractiveness of that market compared to others.BMW themeBayerische Motoren Werke Aktiengesellschaft (BMW) or Bavarian Motor Works is a German automobile, pedal and engine manufacturing company pitched in 1917. The BMW Group is now one of the ten largest car manufacturers in the world and, with its BMW, MINI and Rolls-Royce injurys, possesses three of the surdest premium brands in the car industry. The group also has a wet market fructify in the motorcycle sector and exploit outs a successful financial service business. The company aims to generate profitable step-up and above-average returns by focusing on the premium segments of the international automobile markets. With this in mind, a wide-ranging harvest and market offensive was initiated in 2001, which has h uman raceationed in the BMW Group expanding its product throw away mootably and strengthening its worldwide market position. The companys brand is extremely industrial-strength and is associated with high performance, engineering excellence and innovation. Indeed, the BMW brand is often cited as one of the best in the world, and the company continues to launch a stream of groundbreaking products as part of its battle with German peer Mercedes to be the worlds largest sumptuosity car maker.II. PESTEL Analysis for BMW its seismic disturbance and how these act upond its dodgingOrganisations, such as BMW, need to look into the macro environment in which they exist, as these factors result have an impact and influence upon their industry. The macro environment is broken up into half dozen main categories forming the PESTEL analysis. Automobile manufacturers must let on and select the issues which are most important to their industry in order to conduct a wellhead-grounded ex ternal analysis.Political/ Legal FactorsTrade barriers and restrictions, import tariffs and tax policies are critical factors to consider especially for global manufacturers as they can influence the pricing levels of their products in all(prenominal) market and affect the profitability of a company.Also, Environmental protection laws regarding the CO2 emissions In 2007 the European Commission proposed cover version rules to cut CO2 emissions on new cars to 130 gms/km and it shows Porsche whose cars have highest CO2 output fell 2% as a result and average BMW emissions drop to 170g/km. With the threat of legislation looming BMW has shown that even premium car makers can seriously reduce CO2, stated by Jos Dings, Transport and Environment Director. Please refer to Appendix IV CO2 Emissions by gondola car BrandEconomic FactorsThe overall economic health of the car industry will have a great effect on each of the industry players. Interest rates, exchange rates and the level of unemp loyment can also depress demand. Most importantly the level of consumers disposable income is a critical issue particularly for manufacturers such as BMW and Jaguar, who compete in the high life car market, as an economic downturn can seriously defame sales and revenues.Socio-cultural FactorsThis is an important factor to consider especially with regard to the luxury car market such as BMW. The particular lifestyles of consumers determine which strategy the organisation should pursue in order to capture the needs of its market effectively. Levels of education also affect the industry, as a highly happy labour force is required in order to produce high performance and excellently engineered cars. Other factors are the Population demographics, Income distri exclusivelyion, Social mobility, Attitudes to civilise and leisure and Environmental concern of the market.TechnologicalWith many organisations competing with one some other innovation and technological maturements can help differentiate the companys product. Years ago the level of technology that was available, limited and restricted the models and designs car manufacturers could produce. Nowadays, technology has importantly moved on and companies can deliver more and more to their customers resulting in fierce competition amongst industry players to catch ahead of the market and be the best. By incorporating the latest technology advancements, car producers can lead the market in this field and obtain a competitive advantage.EnvironmentalAlthough not a major driving force, manufacturers must be aware of the advantages in producing cleaner cars as there is now greater emphasis on protecting the environment. BMW have taken this into consideration and launched their Hybrid model. The result is a drop-off in fuel consumption by up to 20 per cent compared with a comparable BMW running on a burn engine alone or it could be constrainn by electric power only, on the combustion engine alone, or with a conclave of both power units.III. BMWs competitive advantageAccording to Mr Lencioni, the car market was already full of good quality cars and consumers found very a couple of(prenominal) ways to distinguish between many of the available brands and models. tonus was no longer an issue in the industry since most models were well reinforced and reliable. Design and Brand Appeal became the distinguishing elements and customers choice factors. Companies that had given attention to the look of their automobiles, even this strategy can only make small happen upons, kinda than losing market share.With this realisation, Design became the biggest factor in the fight for market share, as this feature grabbed customers attention. And with this action, automobile companies had to hire the most talented car designers which leads to grand greets for the company as well as the car prices. engage quality and appeal in design was putting pressure on companies resources, so was brand make wat ering and management. It had become clear that a brand identity was one of the most effective ways to be more competitive in an industry where more and more products came to the market.BMW brand which is the circular blue and white logo represents an aircraft propeller. As company grew, the emblem evolved as the white and blue colours of the flag of Bavaria. The logo has made it easier for tidy sum to remember and has given the company more recognition. The BMW logo represents power, stylish and elegance, consequently making BMW much more competitive in the market. Please refer to Appendix V BMW logo.Apart from brand and design, BMW has able to survive finished developing plastered customer knowledge, special levels of service and access to diffusion channels. Another method we could clearly understand the competitive advantage of BMW is through its strength of five forces. Please refer to Appendix VI The quintuple Forces that Shape Industry Competition.Threat of new entrants Analyse shows that threat for new entrants is low primarily receivable to huge capital and cutting-edge technology. Car industry is highly depended on their suppliers, because of advancement of technology and materials needed to build car. Even though all firms produce cars, no two firms are totally different and no two firms are exactly the same. strategical group maps display different competitive positions that stir firms occupy. found on Information contained in perceptual map it is easy to notice that more and more firms are going into all sort of alliances which help to turn more and more cheap cars. Additionally, there are many substitutes, scarce these decrease if the special features of material increase.Bargaining power of suppliers and vendeesOverall suppliers are atonic because they are spread all over the world and cannot slowly mix in forward, however more and more companies move into close partnerships with suppliers, even by acquiring them in order to reduce lives and exclusivity. The buyer concentration ratio and information availability is high as well as ratio of firms producing cars, on the other hand the power of buyers is weak imputable to low demand for non-consumer goods- automobile, high switching costs and low ability to backward integrate. The threats of substitutes are moderately untroubled because there are many different and little expensive transportation facilities.On the other hand, intense rivalry is strong because the major players are dominant in the market by nigh same technology and manufacturing processes, suppliers relationship and distribution systems. The ease of differentiating cars and price based competition. BMW is looking at entering into alliances, formulate ventures, partnerships as it is the safest way of securing a market share, product attractiveness and competitive prices. In a decision to purchase a BMW product or that of the competitor, an individual will be influenced by a group of masses t hat he or she wants to join people in a certain social class or in a certain income level. There are also three factors that affect the buyer deportment that a marketer must consider they are social, personal and psychological. It will consequently be highlighted how these factors affect the consumer behaviour and in turn how the consumer behaviour affects the buy decisions.Competitive rivalry within industryBMWs attractive product variations were a very good source of strength. BMW is having a repetition of building a driving machine that respond really good and enjoyably to their drivers commands whilst also providing the safety, style, quality, reliability, and durability that help make long term ownership. On the other hand BMWs factories are measured very supple and most ever-changing in Germany utilising the latest technology in each phase of its protect chain. All the above strengths and many others has places BMW in a good position with respect to the main strong compe titors in terms of performance, features, dealer profits , extraneous markets, for subject Lexus, Mercedes-Benz or Cadillac where rivalry among these competitors increases when they compete globally in US car market, Europe and Eastern Europe and South-east Asia, but BMW strong brand is more costly to be switched especially for quality cognizant customers which makes strong competitors. Please refer to Appendix VII world(a) vehicle production and financial performance 2005-2006.Threat of substitute productsThe global securities industry is in jeopardy by lower car demand in North America and Western Europe, both comparatively established car markets that have been badly impacted by high-energy prices and very less consumer response.The global automotive market is extremely competitive. Many large businesses operate on a worldwide scale. Competitors are constantly trying to sense new technologies and markets to increase global market share. Recent years have seen globalisation a nd consolidation strategies increase by competitors resulting in competition intensifying. BMW faces strong competition worldwide in the luxury saloon market. Traditional competition, which has everlastingly been strong from Mercedes and Audi, has intensified with the emergence of Lexus as a major player, along came Fords new model, Lincoln.IV. The future challenges for BMWBMW has modernised model almost after every few months that might shift emphasis on getting a new model to market rather than focusing on issues that may develop with actual models, issues such as software, and mechanical problems. Reflecting this possibility, BMW stock shares have dropped 41% in year 2002 as it was swaning too heavily on one model, the 1 Series to uphold its high edge.BMW also earning profits due to the strong sales of the loaded models of the Mini but need to diversify, or in other words not keep all their eggs in one basket. Although this can also be set as strength it can also be a neat weakness. Strong competition with the major players that BMW needs to look out for, Lexus, Mercedes-Benz, Audi, and even Cadillac. As an example, the Lexus RX300 SUV rivals the BMW X5 the Mercedes E-Class still outsells the BMW 5 Series worldwide Audi 3, 6 and 8 Series compete directly with BMWs 3, 5 and 7 Series Cadillac which has a whole new generation of models, leaving buyers with strong power in building preferences. The 1 series may weaken the BMW trademark with parity to 7 Series buyers, the 1 Series models may be viewed as cheaper cars with less quality. It could also be viewed as a tactic for BMW to maintain high sales volumes.V. The Global Business EnvironmentA gang of strategic models and frameworks will be used to critically evaluate the competitive landscape of the car industry in order to identify the overriding conditions in the wider environment and the dynamics of the industry that can ultimately impact and influence HONDA and BMW car manufacturers. Car indust ry represents oligopolistic casing of market with secern product features, unrestricted but hard to force entry barriers, strong competition and few dominant firms that hold most of market share. Governments rely on the car sector as well as related suppliers and services in terms of employment, taxation, GDP and balance of payments.Demand fluctuations are appearing between country markets. Increase in taxations of production which represents profound government revenue. In 1980 there were thirty car manufactures, by 2000 this had travel to thirteen where smaller manufactures (Saab, Rolls Royce, Jaguar, and Volvo) were bought by larger companies (General Motors, BMW, Ford) Changing the upstream egress chain as component suppliers split into layers and become total closure providers. Full cell technology will replace safety as the number one technology issue. The volume of traffic in many cities around the world is forcing governments to consider a range of road pricing, over-c rowding charging, and car and petrol taxation measures to encourage more use of public transport, potentially reducing demand for cars. High competition encourages manufacturers to locate plants in low-wage countries (Hungary, Brazil, Romania) generating job loss and resentment in traditional car manufacturing countries (Britain, America) Global demand has also eincorporated extensively. Please refer to Appendix VIII Development in global demand in from the year 2004 to 2012.VI. Development and capital punishment of Business StrategyThe automotive industry is always seeing new legislation appearing on matters such as safety and the environment. For example legislation on end of life of vehicles changed practices of many car manufacturers in 2002 and 2003 regarding materials used in car manufacture and other factors. BMW successful competitive strategies are grounded on the brand representation of BMW as a formative and powerful BMW reflects typically style, high apprise, up-to-da te manufacturing and good performance to an heading audience. Customer Feelings BMW is perceived as Quality Company and therefore seen as producing quality products. As a result, it is accepted among customers that BMW might charge higher prices. The BMW Group stays in fifth place amongst the worlds car manufacturers. Based on the external challenges, opportunities and potential future trends in the industry BMW should consider technological innovations looking at government policies concerning environmental issues. BMW should consider product innovation to reduce toxic emissions and to develop more efficient engines such as full cell technology which will replace standard car engines.BMW should consider all opportunities and take advantage of its strengths. Looking at the macro environment BMW should carefully examine world sales of cars, customers behaviour and shift in economy such as interest rates. For BMW to stay ahead in terms of competition and remain gaining market share, the company should understand the change magnitude weight in the global automotive market in developing countries and emerging markets. Collaboration between companies should be maximised in order for BMW to remain competitive and create strong links with suppliers due to soaring prices for steel, aluminium, precious metals and plastic. Cross boarder alliances and mergers should be considered by BMW in order to draw near to the Asian car manufacturers.BMW has noted that sales of its 7-Series model are up in the US, the product has been met with less end upment in Europe. As Germany remains the companys most important market, this may be classed as a risk. A commonly held view is the radical restyling of the 7-Series has failed to excite the traditional BMW driver. This may be especially worrying given the releases of the new 5- and 6-Series models, as they are believed to have undergone restyling as well. If the designs prove to be too innovative or radical, the companys short-te rm growth could be seriously impacted. The risks associated with the unveiling of a number of new models into an underperforming segment are only believably to increase the threat of failure within the segment.Competitive Strategy adjustment with the Maturing Automotive industryLooking on the Automotive Industry in general we can see that it is in a maturing life cycle, where nearly all potential buyers are already users of the industry products, demand consists mainly of replacement, with growth totally depends on the competing firms abilities to attract new buyers and convince existing buyers to upgrade their usage, also the critical success factor (CSF) is mainly the cost efficiency. Throughout the firms Industry Life Cycles (ILC) many challenges faces the BMW corporate managers that needs to reduce BMW strategy , these changes on the strategy called the Strategy Fit , essentially managers will depend on certain input factors which are weighted when choosing the best strategy to fit the current ILC, these factors that affects managers decisions in choosing the company strategy depends on the industry life cycle phase introduction, growth, mature, decline, focusing on maturing and growth ILC phases as they are related to the selected companies. Maturing industries challenges are mainly the slow growth in demand which generates more head to head competition, buyer become more sophisticated more familiar with competing brands with hard bargaining due to repeated purchases, for BMW more focus is on service and price cabal competition, challenge of innovating new product feature of find further use of the product current features to keep attracting buyers attention.VII. BMW Strategic Effectiveness in the MarketBMW took good steps in driving the costs down by focusing on the design and production, it activates Operation activity in the value chain, although the shared component is a good idea for cost reduction, but also BMW high different in the prices of i ts product series could be an important factor in customer perception to the concept of the product features and design, perhaps focusing more on other cost reduction areas and avoid disturbance to customer perception can be a recommended option .Based on the research it is possible to distinguish customers who keep up standard patterns buying affordable but comfortable medium size of it cars, are those aged between 20 and 40 years old, irrespective of the sex but dependant on income and household status. These clients tend to have more urbanised and settled lifestyle. On the other hand those at middle age, male with high income and preferences tend to pay fortunes regardless comfort, fuel usage or environment issues. With regards to a variety of car models it is unworkable to aim at mass market just with standard type of car. More applicable is a differentiated marketing strategy like those developed by GM, Ford and Daimler Chrysler which target clients at high and low income an d offers cars with separate marketing and mixed variables.This strategy favours merger and acquisitions to overcome mobility barriers and gain presence also in luxury car segment. Strategic success for BMW in maturing industries by introducing a wide selection of features in the products, enhancing the industry value chain for example increase use of advanced technology, integrate the suppliers by internet to streamline various value chain activities, drive down unit cost, developing more economical product design, increasing sales to present customers using promotions or more services, acquiring rival firms at bargain price, expanding internationally, adapting core competency according to customer requirements and expectations and move it towards distinctive competency where the firm better then rivals .As part of BMW strategy tailoring by developing more economical product design, and focusing more on the technology innovation that reduces the cost in the overall value chain, for example BMW has been using new technology called RoDip-3, it is a new method for pre-treatment of the electro coating vehicle bodies that provides many enhancements and reduce cost to this process as explained by Christoph Klocke from BMW group. The first of these new pre-treatment and electro coating plants to be installed anywhere in the world is now operating in BMW group. beingness one of the market leaders, BMW was very successful in adapting its Sales strategy with customer new needs and new preferences, BMW offered the BMW financial service to still the customer financial payments utilising the Internet technology and many payments facilities.VIII. ConclusionIn order for BMW to compete effectively within their industry, they must first identify which issues are critical in achieving successful competitive strategies. Decisions concerning the direction and development of the company must take into consideration the whole range of external issues, which have been covered thr oughout this report.The significant factors affecting BMW have been embossed and are summarised below. These issues are critical to BMWs success.Size of organisationThere are many acquisitions and mergers between industry players and so a small coat companies such as BMW must understand their vulnerability have merged with other companies to fight off industry giants. Mass market organisations also need to achieve economies of scale to remain profitable, whereas for manufacturers in the luxury time out markets this is not as vital as they charge premium prices and achieve very high profit margins.Quality of resourcesHigh quality of resources can help companies achieve a competitive advantage over others. Quality is seen as a key success factors to becoming successful within the market.Technology and InnovationCustomers are demanding newer products and developments in technology and innovation can achieve this. Using the latest technology will once once again strengthen the compa nys competitive position in the grocery.Strong Brand showBMW has and can continue to build up a strong brand image through high quality resources. This is essential in the automobile industry as it creates a unique position in the marketplace and builds up customer loyalty making it difficult for other competitors to buy market share.DifferentiationThis is the key to survival. Companies can either differentiate themselves on price or through their unique characteristics of their products. Differentiating themselves from competitors gives the company a strong competitive advantage as they offer customers something exclusive, which competitors do not already provide.IX. ReferencesAhlstrom, J. and E. Sjostrom. (2005). CSOs and Business Partnerships Strategies for interaction, Business Strategy and the Environment 14(4), 230240.Balogun, J., and G. Johnson. 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