BMW’s Competitive Edge †A Case Study

Premium elevator cable cable car makers operate in a highly dynamic and competitive groceryplace. BMW is among the companies that form shown a stronghold on global markets that include Europe, US, Asia, and emerging markets in the Middle East. Its history shows instances when it has come under pull from market forces, nevertheless the European carmaker has proven, time and again, that it can spring back and turn back the race of top industry players. Recent eld have take polish seen BMW appealing to new-generations users opting for winning design standards and select.Indeed, BMWs latest car models show of enhanced performance and dynamics, making the carmaker one of the strongest high life car contenders that continues to aggressively battle for consumer attention in the contemporary age. BMWs rivalrous Edge A Case Study Cutting-edge technology, driving pleasure, harbor and luxury ar closely associated with luxury cars like BMW, Lexus, Mercedes Benz, and Audi. For the average car buyer, each of these marques commands a strong presence.On the other end of the spectrum are the discerning clientele, whose fierce loyalty to a car bell ringer or high regard for automaking heritage whitethorn account for gross revenue people uptrends. Indeed, exchange premium carmakers, among them German automaker BMW, continually vie for consumer attention and boot high hopes of hitting record sales despite rising cost related to materials and new model launches. What BMW has in great measure, though, is a reasoned business strategy that banks not so more on decades of make love and foresight exactly more on using a crystalline theme or image as the ultimate driving forge to ut to the highest degree advantage. After many false starts in the twenty years after the war, (Kay, 1999, para. 8) BMW has clearly made the match between the distinctive capabilities of the system of rules and the market opportunities it faces (Kay, 1999, para. 8). In recent years, the pressure on BMW has been emanating main(prenominal)ly from the recollective threat of substitute products.Notwithstanding its vast experience and ability to school and use sophisticated technical skills the source of competitive advantage for so many German companies, (Kay, 1999, para. ) BMW faces the tough possibility that luxury car buyers whitethorn opt for alternative brands in the market vis-a-vis the latters price offerings. The perceived level of product differentiation is another issue to contend with in the highly competitive luxury automobile industry. What whitethorn strike some customers as a refreshing innovation may be totally revolting for others. In approximately cases, it all boils down to a brand war. A satisfied BWM owner, as personified by the superior executive of a fast-expanding conglomerate in Asia, cited brand as the most compelling reason to purchase a BMW. Its a good, unquestionable car (J.Lucas, personal communication, July 31, 2008). Yet, as a nother ranking business executive asserted, Mercedes Benz is still 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 made sizable investments in automobile design, quality and performance stand to reap some profit. In BMWs case, immobile festering was realized during the jump half of 2008, despite testing frugal conditions in certain automobile markets across the world (BMW Group increases sales, 2008, para. ). Today, pressure is mounting with the threat posed by the entry of new competitors. move industry players stepping up price competition had been evident in the first few years of the 21st century, with low price or incentives percentage as the prevalent means to displace market share from competitors (Lencioni, 2004, p. 735).To take the costs, companies like BMW set up production plants in global growth markets. Business cycles fluctuate, t hough. While the European prestige car maker post 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 avoid the difficult economic trends in authoritative 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 question Executive Helmut Panke, BMW has dramatically expanded its product offerings, setting its sights on market segments of the future.However, moving into smaller cars meant earning the lower 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 high, its product phylogeny 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 the bargaining 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 level of competitive rivalry heats up, BMWs burning obsession with performance and brand identity or image has aided the firm in determination the widening gap with other luxury cars. BMWs research and development teams have been caught in a frenzy to maintain competitive edge. discipline teams that pore over everything from (such) market feedback to innovations are encouraged to engage in friendly fighting to decide the vital characteristics of a new BMW (Edmondson, et. al, 2003, para. 24).As it faces countless threats and risks, BMW remains 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 beco me the customers overriding choice features (Lencioni, 2004, p. 741). impelling 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 thing that worked to BMWs advantage had been its firm make on the supply chain (Lencioni, 2004, p. 737). BMW nurtured long-running and dependable supplier relationships. Coupled with a highly talented 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 safe features and individuality, the German carmaker remains a potent force to meet with in the international automobile industry.