Napier University Edinburgh | Strategic Appraisal Assessment | 08002676 |
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20/4/2010
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Strategic Appraisal
BMW Case Study
Introduction
Bayerische Motoren Werke AG now known as BMW was founded in Germany in 1916. The BMW group began as a manufacturer of engines. In the present day now also manufactures automobiles, motorcycles, software and offers financial services. The case study ‘Exploring Corporate Strategy’ prominently deals with the automobile side of The BMW Group. Within this market BMW trade under three different brands BWM, MINI and Rolls Royce. BMW experienced a failure to gain and grow market share in the early twenty first century the group then embraced an imperative strategy of organic
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The organisation claimed that this drop was due to changes in the legislation for tax provision. These changes meant that the organisation had to abide by the new taxation amounts and at this time the taxation rates had increased implicating higher out goings for The BMW Group. This change in legislation has consequently had a huge impact on the organisation causing its profits to decline. As changes like this often happen within legislation BMW have to ensure that they are aware of these so they do not face any further issues.
Political issues also have to be taken into account on a regular basis within The BMW Group due to the company trading globally. Trade barriers and restriction can cause problems for this organisation so thought has to be given to where and how they can trade. BMW then have to consider the tax policies which are in place as it will affect their pricing strategy. If taxes are high then the prices of their automobiles will rise in accordance if they aim to meet the same profit margins.
Porter’s Five Force Model in relation to The BMW Group
Michael Porter established this model as a way of ‘assessing the attractiveness (profit potential) of different industries.’ (Johnson, 2008) Relating this to the BMW Group it will outline issues that will aid in securing competitive advantage and gain an understanding of the
General Motors, the “mother company” has faced many troubles in the past, and surfaced. A research by the National Research Council in the United States has revealed in 1992 that there had many impacts and future impacts in the automotive industry, indeed; it would affect the jobs and the internal economy. However, General Motors understood the threat potential that this and established strategic plans to revert the trend. Furthermore, whether General Motor Company was able to change the trend, and it saw the internal and external factors, prepared a strategic plan, Holden being the first brand in Australia, with at least just the 10 % of the population compared with the USA, the way to get a plan looks easier. In addition, it is easier to see a trend in countries with low population and good policymakers. In 2008 General Motors faced again the limit to bankruptcy. A fierce plan to develop and a new business association with FIAT made that GM avoid the dissolution. Even do all Europe have had a similar crisis( Boudette & Choudhury,
This recession hits home with the automobile industry. During this current recession GM is facing the possibility of bankruptcy, but is hoping to be helped out by the government. History
technology project. The BPTO produced weekly status reports and monthly budget reviews helping the company gauge where it was heading towards. Thus the alignment started advancing (Austin, 2007).
Eagle Motors Ltd is a well-established Swedish Car Manufacturing Company trying to set up their firm in Australia. In order to compete successfully in the car industry in Australia, Eagle Motors Ltd needs to conduct an analysis of the industry context in which they would like to operate. Using the porters five forces model, this provides a detailed analysis of the competitive nature of the Australian car industry and also it suggests an appropriate competitive strategy for Eagle Motors to gain a sustainable competitive advantage. Eagle Motors Ltd is planning to employ a mixture of Swedish and Australian managers and employees to run there operations in Australia. However, the senior management at Eagle Motors does
What are the causes and consequences of BMW’s quality problems with newly launched products? What should be done to improve “launch quality”?
The automotive industry globally involves the processes of manufacturing as well as sales of cars and other automobiles. The business of this industry is also inclusive of retailing activities like services; sale of spare parts, gas-station retails etc. by the year 2015, and the growth rate of the industry is expected to have a rise of 5.5% (Market Line, 2012). Moreover, as per International Organization of Motor Vehicle Manufacturers, this industry is the leading driver in terms of global economic progress and the largest employer. The changing trends and rising demand for technically advanced cars are giving out more opportunities. This essay is going to be a presentation on the analysis of the Volkswagen positioning strategy with respect to the Porters models of competitive strategies. This essay would be vital, as this analysis would help in revealing the company’s competitive and strategic position in the industry.
G. According to US News, the 2016 Toyota Prius was ranked #9 in compact cars, #5 in hybrid and electric cars, #8 in hatchbacks, and #10 in small cars (“2016 Toyota Prius | U.S. News & world report,” n.d.). It retails between $24,200 and $30,000 which is considered a compact car. “The Toyota Motor Corporation is a multinational corporation and now the world 's largest automaker in terms of sales, net worth, revenue, and profit according to Fortune Global 500. Toyota is positioned in the moderately low-price, high volume market” (“Strategic analysis of Toyota motor corporation,” 2003). They did move more into the higher-priced market with the Lexus brand and worked to fill the need for electric vehicles with the Toyota Prius. The company is diversified in various markets within the automobile industry and are able to branch out in several directions.
As a result of the increased demand of cars, the competition among car companies is becoming intense. Although the market of car is the biggest growing market in the world, there are still some companies who make cars failing year after year. However, there are some outstanding car companies such as The BMW Group performing distinctly.
Let us begin this report by examining how closely related Cost/Mile is to the Size of the car being tested. To do this, a multiple regression analysis was run using Cost/Mile as the dependent variable, and the ‘dummy’ variables Family-Sedan and Upscale-Sedan as independent variables.
This case study presents how BMW, a German automobile, motorcycle and engine manufacturing company, is trying
1) The buyer decision process of traditional Porsche customers relies on the motivations that determine these people to select this brand. Their purchasing decision process is based on the exclusivity of the brand that is connected with the car owner. In their opinion, by purchasing a Porsche, traditional customers purchase the exclusivity and luxury associated with the brand. These customers want to purchase a car that reflects their social status and their financial power. In addition to this, they are not interested in the utility of the car, but in the characteristics that differentiate it from utility cars. These traditional buyers are rather interested in their feeling while driving a Porsche in comparison with the size, price, or fuel economy of the car.
The company aims to generate profitable growth and above-average returns by focusing on the premium segments of the international automobile markets. With this in mind, a wide-ranging product and market offensive was initiated in 2001, which has resulted in the BMW Group expanding its product range considerably and strengthening its worldwide market position.
As for South America, Harley-Davidson Inc. HOG +0.31% opened a permanent Latin America headquarters, joining a growing list of U.S. companies looking to tap into the emerging market. (By Melodie Warner in Market Watch) South America has a growing economy and a huge acceptance for an icon in the motorcycle industry like Harley Davidson. In the same way Japan embraced Harley “Their economy is a fast growing luxury market” p.c11.
In order to identify BMW Group’s internal strengths and weakness, here applied strategic capability which combined three keys of resource: tangible resources, intangible resources, and competences. All of these resources enable a company to attain a sustainable competitive advantage (Dess et al, 2010).
Michael Porter provided a framework that models an industry as being influenced by five forces. The strategic business manager seeking to develop an edge over rival firms can use this model to better understand the industry context in which the firm operates.