BMW’s Competitive Edge †A Case Study

Premium car makers operate in a exceedingly dynamic and competitive marketplace. BMW is among the companies that have shown a robusthold on global markets that include Europe, US, Asia, and emerging markets in the Middle East. Its history shows instances when it has begin under pressure from market forces, but the European auto manufacturer has proven, m and again, that it can spring back and rejoin the race of top persistence players. Recent years have even seen BMW appealing to new-generations users opting for winning aspiration standards and quality.Indeed, BMWs latest car representatives boast of enhanced performance and dynamics, making the carmaker one of the strongest luxury car screwers that continues to aggressively battle for consumer tending in the contemporary age. BMWs Competitive Edge A episode Study Cutting-edge technology, driving pleasure, comfort and luxury are near associated with luxury cars like BMW, Lexus, Mercedes Benz, and Audi. For the average ca r buyer, each of these marques commands a strong presence.On the other end of the spectrum are the discerning clientele, whose fierce on-keyness to a car brand or high regard for automaking heritage may account for sales majority uptrends. Indeed, premium carmakers, among them German car maker BMW, continually vie for consumer attention and nurture high hopes of hitting take sales despite ascension equals related to materials and new model launches. What BMW has in great measure, though, is a sound business strategy that banks non so much on decades of experience and foresight but much on using a coherent theme or witness as the ultimate driving machine to utmost wages. After some(prenominal) false starts in the twenty years after the war, (Kay, 1999, para. 8) BMW has clearly do the match in the midst of the distinctive capabilities of the organization and the market opportunities it faces (Kay, 1999, para. 8). In youthful years, the pressure on BMW has been emanating mainly from the persistent threat of substitute products. merely its vast experience and ability to develop and use sophisticated good skills the source of competitive advantage for so many German companies, (Kay, 1999, para. ) BMW faces the unsentimental possibility that luxury car buyers may opt for alternative brands in the market vis-a-vis the latters equipment casualty offerings. The perceived take of product differentiation is another thing to contend with in the highly competitive luxury elevator car industry. What may strike some customers as a refreshing innovation may be totally repellent for others. In most cases, it all boils down to a brand war. A satisfied BWM owner, as personified by the high-level executive of a fast-expanding obscure in Asia, cited brand as the most compelling reason to grease ones palms a BMW. Its a good, reliable car (J.Lucas, personal communication, July 31, 2008). Yet, as another ranking business executive asserted, Mercedes Benz is sti ll the best, while Audi is the rising star (A. Lagmay, personal communication, July 31, 2008). Indeed, consumer tastes and requirements are evolving, and premium car producers who have do sizable investments in automobile conception, quality and performance stand to thread some profit. In BMWs case, solid growth was realized during the source half of 2008, despite testing economic conditions in certain automobile markets across the world (BMW Group increases sales, 2008, para. ). Today, pressure is mounting with the threat be by the entry of new competitors. Automobile industry players stepping up price competition had been evident in the first few years of the twenty-first century, with low price or incentives serving as the prevalent direction to displace market share from competitors (Lencioni, 2004, p. 735).To contain the costs, companies like BMW set up production plants in global growth markets. Business cycles fluctuate, though. While the European prestige car maker post ed increased sales of its BMW, mini and Rolls-Royce brands by 4. percent from January to June 2008 (BMW Group increases sales, 2008, para. 1), it was not entirely able to parry the difficult economic trends in important individual markets such as the USA and Japan global sales slipped 2. 8 per cent in the month of June to 146,138 units (BMW Group increases sales, 2008, para. 2). Under its Chief Executive Helmut Panke, BMW has dramatically grow its product offerings, setting its sights on market segments of the future.However, moving into smaller cars meant earning the deject margins that were typical of those market segments (Lencioni, 2004, p. 41) as compared to mid-size sedans and luxury limousines. As an analyst pointed out, Compared with volume producers, BMWs manufacturing costs are much higher, its product development cost more costly, and its purchasing costs higher (Edmondson, Palmeri, Grow, & Tierney, 2003, para. 13). In essence, BMW has had to contend not just with t he talk terms power of customers, but also with the bargaining power of suppliers which provide the unique resources to sustain its main sources of competitive advantage brand quality and reputation of reliability.Nowadays, as the intensity of competitive competition heats up, BMWs burning obsession with performance and brand identity or image has aided the firm in closing the widening counterpane with other luxury cars. BMWs research and development teams have been caught in a frenzy to maintain competitive edge. Development teams that pore everyplace everything from (such) market feedback to innovations are encouraged to engage in friendly rubbish to decide the vital characteristics of a new BMW (Edmondson, et. al, 2003, para. 24).As it faces countless threats and risks, BMW carcass poised to prevail and deliver. Among the critical success factors in the high-end market where BMW competes is its design and brand appeal, which had become the customers overriding choice featur es (Lencioni, 2004, p. 741). Effective branding, likewise, created emotional connections between customers on one side and products, salesmen, other users on the other (Lencioni, 2004, p. 736) although this was true not just for BMW but for other luxury marques as well. one(a) thing that worked to BMWs advantage had been its firm control on the bring out chain (Lencioni, 2004, p. 737). BMW nurtured long-running and dependable supplier relationships. Coupled with a highly ingenious workforce that operated at the most flexible and most productive factories in Germany (Edmondson, et. al, 2003, para. 20) to churn out vehicles with styling variations, unprecedented performance and safety features and individuality, the German carmaker remains a potent force to reckon with in the multinational automobile industry.