The Automobile Industry - Assignment Example

Company Analysis: A Case Study of BMW Bavaria Motor Works (BMW) is a Germany firm specializing in automobiles, motorcycle and engine production. Founded in the year 1916, the company is currently headquartered in the city of Munich Germany and is the owner and manufacturer of leading luxury car brands such as Mini, Rolls-Royce and BMW. The current company was born from Rapp-Motorwerke that had been formed in the year 1913 by Karl Friedrich Rapp. It was taken over in 1916 when Rapp struggled financially and re-launched under a new name of Bayerische Fludzeug-Werke (BFW). After a very short time the name turned again into later became the shout-out of quality automobiles i.e. BMW. BMW began off as a manufacturer of aircraft engines. In the year 1918 following the end of World War 1, the Versatiles Armistice Treaty forced the company to cease the business of aircraft engine production. It thus changed the line of business to start producing motorcycles in the year 1923, and later automobiles in 1928 when the treaty’s restrictions began to be lifted. The very first car successfully produced by BMW and which actually propelled the company’s automobile business was known as Dixi. It debarked again to production of engines for aircrafts in the 1930s producing engines such as BMW 132, BMW 801 and BMW 003. The Quandt family has since the year 1959 owned a controlling stake of 46% of the company’s stock and the rest is public. BMW bought Has Glas Company in the 1966 and in 1992 acquired a controlling stake in Designworks USA and went on to fully acquire the company in 1995. BMW also acquired the Rover Group for six years and sold the group off to the Phoenix Consortium as it was making losses. It retained the rights of building the new Mini brand which entered the market in 2001. The company’s long serving lead designer Chris Bangle left in 2009 and his place was taken by Adrian Van Hooydonk. BMW bought the Husqvarna Motorcycles. In 2012 Bavaria Motor Works was listed by Forbes as world’s most reputable company. The Forbes raking system bases a lot on the willingness by people to buy, invest in, work for and recommend the firm to others. 60% of the Forbes raking points is driven by the perception of people about the company while 40% is the perception of the company’s products. Brand Portfolio. Specializing in the production of automobiles, the BMW Group has earned itself brand recognition as the worlds most successful. The group runs with three major brands, MINI, BMW and Rolls-Royce all of which are targeted for different market segments. The company has for a long time continued to be among the major players in luxury automobile section and registering consistent sales growth even with the crisis in the European markets. The company’s combined sales for the two brands of Royce and MINI as at March 2013 stood at 191,269 units. This significantly surpassed the result for the year 2012 which was 5,528 units. As a group of companies, BMW is strategically positioned across the world with a total of twenty four production facilities in thirteen countries as well as a distribution network covering over one hundred forty countries (Larson and Falekemark, 2006). The company’s cars are known for superior engine performance quality. The New Class model was a compact sedan and coupes with started with 1500 series and continued through the very last 2002 series in 1977. The car was powered the company’s M10 engine and had an independent succession. In 1975 the BMW Group launched the BMW 3 series which today is in the 6th generation (F10) with models such as F30, E91, E93 and E92. The company also launched its smalles car in the year 2004, BMW 1 series which is currently in the 2nd generation with models like F20, E82 and E88. In 2010 BMW 5 series was launched in 2010 which is available in models like Sedan (F10), Station Wagon (F11) and Gran Turismo (F07). The company has continued to launch new and innovative car brands in the market such as the BMW 7 series, BMW 6 and the BMW S series. Brand Inventory. The company has used the same logo since the 1920s when it was first adopted. The logo that mimics the motion of a white propeller on a sky-blue background not only communicates the quality of cars the company manufactures but also an aesthetic value in the cars. It communicates the feeling luxury that is characteristic of BMW cars and this is very important as a marketing element as it is able to captivate buyers. Just the brand name BMW itself communicates quality and style and serves a great deal of good for marketing. In fact for a very long time, many people thought it stands for ‘Best Motors in the World’. Surely automobiles branded BMW are regarded among consumers as being among the very few engineering forms that are close to perfection (Franzen and Moriarty, 2009). Another important element of the BMW brand inventory is the brand slogan- The Ultimate Driving Machine (USA, Australia, and UK). Taglines such as the ‘Sheer Driving Pleasure’ communicate luxury, class and pleasure in driving the machines manufactured by the company. This is very powerful message to the market as it communicates aspects of quality for their money as well as respect associated with driving or owning an automobile branded BMW. It also communicates trust and customers will surely go for a BMW machine knowing the company has the best automobiles in the industry. It will be remembered that the company adopted the ‘cardio-approach’ where it focus is not directed at the car itself but the engine which is the source of power. It customer proposition is therefore efficiency of engine performance and this has earned the company a lot of trust and respect among consumers. According to the business week (2009) BMW is ranked at number 15 globally in terms of brand equity. The company has also been regarded by the luxury institute as the most admired the world over. In terms of brand awareness the car is on the mind of many people the world over and this really boosts the company. Is has achieved a great deal of brand salience as many consumers will consider purchasing the brand for the prestige it comes with. What all this means is that company’s brand strategy has worked very well and therefore the company is able to sell itself even with little promotion (Darveight, 2010). When it comes to marketing activities the brand works a lot to favour the company’s marketing strategy. Its value proposition for the consumer is not in the car itself but the performance of the engine. This is where power comes from and therefore people will consider purchasing BMW branded cars for the quality aspect everything else. The company’s strategy of thinking in the long term, an element of social responsibility in the value and investing in R&D as well as efficiency, speed and agility when responding to market changes promotes its higher performance through innovation which in turn strengthens the brand. The culture was adopted by the company in its early stages and has maintained it to date, guiding its narrow strategic path. The brand strategy works very for the group in terms of the 4ps. The company is regarded as the manufacturer of high performing engines and quality luxury cars the world over. Consumers will therefore consider purchasing and also recommended the brand to their friends. In terms of pricing, consumers who go for BMW cars do not really care about the prices but value for their money. Consumers want quality and prestige all which are characteristic of BMW. With the various target market segments for the different BMW brands, the company tailors different promotional messages for the specific segments. With the brand inventory elements such as the logo, slogan and taglines, the company has differentiated itself from peers and positioned strategically as a manufacturer of quality and not quantity. The products are high performing, customers are given value for their investment, and the brand is well promoted and is talked about by everyone. The company therefore stands out as a trusted, credible and responsible one. It enhances grows customers locality through enhanced brand experiences and keeping innovative. The company has always fulfilled its promise of constantly launching new and better models (Keller and Lewi, 2008). The BMW Group has multiple customer touch points. It promotes its products on both print and electronic media. Its advertisements are on television, news papers and radio. The messages are tailored for different audiences and delivered just through the most appropriate media. It has designed messages that appeal to women and this are such as BMW in bloom and these are delivered using the communication platform of high-end fashion magazines. For the younger generations, the company communicates through short internet films, online games and yuppy magazines that feature the BMW transformers. References 1. Darveight, C. (2010). Better Cars, Smaller Profits. The Automobile Industry at the Crossroads. Autoevolution 2. Franzen, G., & Moriarty, S.E. (2009). The Science and Art of Branding. Armonk, N.Y., M. E. Sharpe. 3. Hiba Larson and Christian Falkemark. (2006) BMW- A Company Analysis. Gothenburg University. Avilable at: https://gupea.ub.gu.se/bitstream/2077/3072/1/06-07-53M.pdf 4. Keller, K & Lewi, G . (2008) Strategic brand management: building, measuring and managing. New Jersey: Pearson Prentice Hall. 5. Kiley, David (2004). Driven: Inside BMW, the Most Admired Car Company in the World. 6. Mangold, M. (2012). Creating Sustainable Competitive Advantage. 7. Muenchen, I. (2012) BMW Group: Company: Company Portrait: Strategy  Available at: http://www.bmwgroup.com/e/0_0_www_bmwgroup_com/unternehmen/unternehmensprofil/strategie/strategie.html/ Read More