Development And Implementation Of Business Strategy Marketing Essay

Development And Implementation Of phone line Strategy Marketing EssayThe purpose of this paper is to critically discuss the strategical orders Bavarian Motor deeds (BMW Group) applied to become bingle of the major leading automobile defect today. With reference of BMW automobiles Case Study by Mr. Valeriano Lencioni, I result further examine what happened with the company, what argon the different business schema approaches the company could use to overpower the gamey competition in the automobile industry, and what is in the prox for the company.Like any some other business companies, BMW went through rough time when they continuously keep on losing their mart sh argon and with the presence of bastardly competition, everything would direct been un favored. With the use of business strategies, BMW was able to determine what went wrong and what they could do to survive the pressure in the industry.Organisations in a similar milieu ar not identical unless(prenominal) ha ve different capabilities. BMW has strategic advantages that sets them a business office from its competitors. BMWs re characters and competences developed over years for the company to survive and grow. Every company necessarily a foundation to continuously keep up with its changing purlieu and with competition.Presently, BMW is a multi-billion company that formulates several of the best-known railroad cars in the foodstuff. BMW has gone way cold ahead from its competitors even with the pressure from competition and still manage to survive and even growing and expanding planetaryly.What are these business strategies BMW applied all these years to purport there on top? How did the company even manage to be one of the biggest car manufacturers in the present time knowing the company went shatter in the year 1961? What is happening in the automobile industry and what is the position of BMW in the competition? Will it still manage to survive in the future? What are the challen ges in store for the company for the next 10 years?BUSINESS ENVIRONMENT AND MAIN TRENDS IN 2004The global car securities industry started decline in 2003, led by the drop in the market in North the States and Western Europe. Other regions of the world led by eastward Asia are instructing further car market expansion in 2003. In 2004, projections for livelier economical appendage strengthen the continuation of car market crop in Western Europe and North America.Although how laws hatful get stricter and how badly it flowerpot impinge on the companies earnings, it also develop vernal technologies and markets. Another major out-of-door compute affecting the current situation of BMW is that industry structure is becoming more(prenominal) than intense. BMW is a business which could face problems in the future if it doesnt give in into devotion strategic alliances. Although, the problem was that the economy in North America and Western Europe has been affected by the overc apacity in the automobile industry. It became a global economic instability as consumers from the said part of the world decided to reduce spending on non essential honorables. There was lower car adopt and so, sales was automatically affected.The automobile industry is becoming more and more competitive, with 6 major groups which have recently formed. Car manufacturing presently is largely affected by external social and environmental pressures, which influence both current proceedsion practices and the development of future products and technologies. Environmental standards are mostly set by political relation regulation and even associations within the automobile industry. These acts aim to as anti-emission laws get stricter every year, and companies look to double or triple their fuel efficiency, alternative technologies are being developed to replace the traditional gasoline engines, and have started to hit the market. incrementd fuel-economy and decreasing vehicle weight are gradual changes that slowly ameliorate automobile performance disruptive technologies include new fuel sources much(prenominal) as electricity, solar energy, and fuel cells. Please refer to supplement III UK car issue in Year 2003.Within the automobile industry, it had too more difficulties and the players in this field have experienced the troubles of surviving. The change is needed as uprightness scathes drops and geopolitical tensions arised, including the related menace to oil prices, all having a negative impact on the economy. Increasing the guard duty standards for automobiles also mean that nowadays cars take broader time to be developed and manufacturers should now focus on pre-marketing activities, making cars look more desirable to consumers due to their safety. Competitive forces determine the market power of competitors, the kind of competition they engage in, the factors that give some of them a competitive advantage, and the invokeive force of that ma rket compared to others.BMW GROUPBayerische Motoren Werke Aktiengesellschaft (BMW) or Bavarian Motor Works is a German automobile, motorcycle and engine manufacturing company founded 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 brands, possesses trine of the crockedest premium brands in the car industry. The group also has a solid market position in the motorcycle sphere of influence and operates a achievementful monetary services business. The company aims to generate emolumentable 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 visualiseably and strengthening its worldwide market position. The companys brand is extremely starchy and is associated with heights performance, engineering e xcellence and transition. Indeed, the BMW brand is often cited as one of the best in the world, and the company continues to launch a stream of modernistic products as part of its battle with German peer Mercedes to be the worlds largest luxury car maker.II. PESTEL Analysis for BMW its impact and how these influenced its systemOrganisations, such as BMW, need to look into the macro environment in which they exist, as these factors will have an impact and influence upon their industry. The macro environment is broken up into six main categories forming the PESTEL analysis. Automobile manufacturers must(prenominal) pick up and select the issues which are most spell outant to their industry in order to conduct a valid external analysis.Political/ Legal FactorsTrade barriers and restrictions, import tariffs and tax policies are critical factors to consider specially for global manufacturers as they can influence the pricing levels of their products in for each one market and aff ect the positiveness of a company.Also, Environmental protection laws regarding the CO2 emissions In 2007 the European Commission proposed binding 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 Car check off frugal FactorsThe overall economic health of the car industry will have a great effect on each of the industry players. Interest rates, deepen rates and the level of unemployment 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 luxury car market, as an economic downturn can seriously damage sales and revenues.Socio-cultur al 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 call for of its market effectively. Levels of education also affect the industry, as a highly skilled labour force is required in order to produce high performance and excellently engineered cars. Other factors are the Population demographics, Income distribution, Social mobility, Attitudes to work and leisure and Environmental concern of the market.TechnologicalWith many organisations competing with one another innovation and technological developments can help differentiate the companys product. Years ago the level of applied science that was available, limited and restricted the models and designs car manufacturers could produce. Nowadays, engineering has significantly moved on and companies can deliver more and more to their customers resulting in fie rce competition amongst industry players to stay ahead of the market and be the best. By incorporating the latest technology cash advances, car producers can lead the market in this field and carry out 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 conside dimensionn and launched their crossbred model. The result is a reduction in fuel consumption by up to 20 per cent compared with a comparable BMW running on a combustion engine alone or it could be driven by electric power only, on the combustion engine alone, or with a junto of both power units.III. BMWs competitive advantageAccording to Mr Lencioni, the car market was already full of sober quality cars and consumers found very few slipway to distinguish between many of the available brands and models. Quality was no longer an issue in the i ndustry since most models were considerably built 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 gains, rather 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 massive costs for the company as well as the car prices.Pursuing quality and appeal in design was putting pressure on companies resources, so was brand building and management. It had become faint 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 heap to remember and has given the company more recognition. The BMW logo represents power, stylish and elegance, thus 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 through developing strong customer knowledge, special levels of service and access to distribution 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 Five Forces that Shape Industry Competition. curse of new entrantsAnalyse shows that threat for new entrants is low mainly due 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.strategic group maps display different competitive positions that bear upon firms occupy. Based on Information contained in perceptual map it is easy to lineup that more and more firms are going into all sort of alliances which help to offer more and more cheap cars. Additionally, there are many substitutes, but these decrease if the special features of material increase.Bargaining power of suppliers and buyersOverall suppliers are weak because they are spread all over the world and cannot easily commingle forward, however more and more companies move into close partnerships with suppliers, even by acquiring them in order to reduce costs 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 due to low demand for non-consumer goods- automobile, high switching costs and low ability to backward integrate. The threats of substitutes are moderately strong beca use there are many different and less costly transportation facilities.On the other hand, intense rivalry is strong because the major players are dominant in the market by nearly 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, joint 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 batch that 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 behaviour that a marketer must consider they are social, personal and psychological. It will therefore be highlighted how these factors affect the consumer behaviour and in turn how the consumer behaviour affects the buying de cisions.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 dynamic in Germany utilising the latest technology in each phase of its hold dear chemical chain. All the above strengths and many others has places BMW in a good position with respect to the main strong competitors in ground of performance, features, trader networks , foreign markets, for example 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 conscious customers which mak es strong competitors. Please refer to Appendix VII Global 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 find new technologies and markets to increase global market share. Recent years have seen globalisation and consolidation strategies increase by competitors resulting in competition intensifying. BMW faces strong competition worldwide in the luxury prevention market. Traditional competition, which has always 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 BMW BMW has modernised model almost by and by every few months that might shift emphasis on getting a new model to market rather than focusing on issues that whitethorn develop with existing models, issues such as software, and mechanical problems. Reflecting this possibility, BMW stock shares have dropped 41% in year 2002 as it was relying too heavily on one model, the 1 serial publication 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 identified as strength it can also be a true 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 gen eration of models, leaving buyers with strong power in building preferences. The 1 series may weaken the BMW trademark with comparison 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 obtain higher sales volumes.V. The Global crease EnvironmentA conclave of strategic models and frameworks will be used to critically evaluate the competitive landscape of the car industry in order to identify the prevailing conditions in the wider environment and the dynamics of the industry that can ultimately impact and influence HONDA and BMW car manufacturers. Car industry represents oligopolistic type of market with differentiated product features, open-plan 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 f luctuations are appearing between country markets. Increase in taxations of production which represents significant government revenue. In 1980 there were thirty car manufactures, by 2000 this had fallen to thirteen where smaller manufactures (Saab, Rolls Royce, Jaguar, and Volvo) were bought by larger companies (General Motors, BMW, Ford) changing the upstream supply chain as component suppliers split into layers and become total solution 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-crowding 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 play loss and resentment in traditional car manufacturing countries (Britain, America) G lobal demand has also emerged extensively. Please refer to Appendix VIII Development in global demand in from the year 2004 to 2012.VI. Development and implementation 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 constructive and powerful BMW reflects typically style, high value, up-to-date manufacturing and good performance to an object 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 way higher prices. The BMW Group stays in fifth place amongst the worlds car manufacturers. Based on the external challenges, opp ortunities 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 increasing 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 a nd 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 enthusiasm 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 foment 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-term growth could be seriously impacted. The risks associated with the introduction of a number of new models into an underperforming segment are only likely to increase the threat of failure within the segment.Competitive Strategy fitting with the Maturing Automotive industryLooking on the Automotive Industry in general we can see that it is in a maturing life cycl e, 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 embodied managers that needs to tailor BMW strategy , these changes on the strategy called the Strategy Fit , essentially managers will depend on certain input factors which are burden 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 combination 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 its product series could be an important factor in customer experience 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 follow standard patterns buying affordable but comfortabl e medium sizing cars, are those aged between 20 and 40 years old, regardless 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 impossible 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 and 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 woof 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 pushing 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. Be ing 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 facilitate 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 steerage and development of the company must take into consideration the whole range of external issues, which have been covered throughout this report.The significant factors affecting BMW have been increase 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 sized companies such as BMW must understand their vulnerability have merged with other companies to fight off industry giants. Mass marke t organisations also need to achieve economies of scale to remain profitable, whereas for manufacturers in the luxury niche 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 again strengthen the companys competitive position in the marketplace.Strong Brand imageBMW 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 steal market share.DifferentiationThis is the key to survival. Compan ies 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. (2005) From intended strategies to unintended outcomes The impact of change recipient sensemaking. Organisation Studies 26/11 15731601.Blank, H. D. and Carty, C. M. (2005) The Eco-Efficiency Anomaly, Journal of Investing (in press)Chow I, Holbert N, Kelley L and Yu J, (2004), Business Strategy An Asia Pacific Focus, 2nd Edition, Prentice HallClark, E. (2004) Power, action and constraint in strategic management Explaining enterprise restructuring in the Czech republic. Organisation Studies 25/4 607627.Coe, N. Hes s, M.Yeung, H.W.-c. Dicken, P. and Henderson, J. (2004). Globalizing regional development A global production networks perspective. Transactions of the Institute of British Geographers 29468-84.Floricel, S., and A. Langley (2004) Strategy as dynamic leverage. Conference of the European Group of Organisation Science, Ljubljana, May.Gereffi, G., Humphrey, J., and Sturgeon, T. (2004), The Governance of Global Value Chains, Review of International Political Economy, 12, 1, 78104.Gertler, M. S. (2004). Manufacturing culture The institutional geography of industrial practice. New York Oxford University Press.Gharib, M. and E. Wahlqvist (2004) A calibration Story and its Paradox Creating Credibility for the Business Social Compliance Initiative.Goetschalckx, Mark, Bernhard Fleischmann. (2005). Strategic network planning. H. Stadtler, C. Kilger, eds. Supply Chain Management and Advanced Planning, 3rd ed. Springer, BerlinHeidelberg, Germany, 117-137.Hart, S. L. and S. Sharma. (2004) Engagin g adorn Stakeholders for Competitive Imagination, Academy of Management Executive 18(1), 7-1.Holmstrom, J. and D. Robey. (2005). Understanding its Organizational Consequences An Actor Network Theory Approach, in B. Czarniawska and T. Hernes (eds.), Actor Network Theory and Organizing (Copenhagen Business civilize Press, Copenhagen), pp. 165187.Jarzabkowski, P. (2004) Strategy as practice recursiveness, adaptation, and practices-in-use. Organisation Studies 25/4 529560.Johnson G, Scholes K and Whittington R (2008), Exploring Corporate Strategy Text and Cases, 8th Edition, FT Prentice Hall.Johnson G. Scholes K. and Whittington R. (2005) Strategic analysis of BMW Exploring Corporate Strategy.By signing this page I am stating that the work contained in this report is my own work and has not been plagiarised from other sources. I understand that my work will not be marked if more than 15% of the content is found to be plagiarised.NameDate tactual sensation