Development Program for BMW & NETFLIX - Essay Example

Development Program for BMW & NETFLIX I. BMW GROUP: Research and development program; production and product differentiation BMW is one of the leading automotive companies in the world and it enjoys considerable brand value. It has no doubt nurtured its reputation and the goodwill of car buyers everywhere because of the high quality and the prestige that attaches to the ownership of a BMW car. Strategic planning is an activity that the management has been doing, which means that it regularly scans its external environment - its task environment and its general environment. On the basis of the information it gathers from the environmental forces and its stakeholders, the company designs its production and marketing programs to address the problems and requirements. Research and development is one activity that it does continuously, and the methods and approaches it uses in this functional area has been refined to address numerous factors that would solve problems or improve the performance of the BMW car. One environmental concern the firm is trying to address is the environment. The employment of BMW Efficient Dynamics seeks to achieve compliance with the Kyoto protocol targets by designing the automobiles so that they consume less energy. The steps are as follows: production of highly efficient engines, active aerodynamics, and the use of lightweight materials and intelligent energy management within the vehicle. Also, in the medium term, it will seek to increase electrification of the drivetrain and hybiridization. In the long term it will be the use of hydrogen on a larger scale in combustion engines which generate no carbon emissions. The BMW Group's method of achieving innovation in Global Research is called lateral thinking. There is also a constant dialog with scientists so that solutions can be achieved through the fusion of knowledge across all scientific disciplines. One technique that may be cited is networked information systems. Instead of completing tasks sequentially, new development processes involve seeing to it that as many individual tasks as possible are accomplished simultaneously, and integrated in an end result according to a multi-layered plan. Aside from its internal research efforts, and interaction with scientific organizations worldwide, it is continuously looking for and inviting ideas and innovative concepts from outside the organization. "We are not only interested in our own research and development departments, but also in the creative minds outside the BMW Group." (BMW website). In terms of production and production processes, BMW, in May 2000, introduced BMW 7hL, a car which utilizes hydrogen for fuel. The BMW 7hL hydrogen fleet have proved their practicability on a day-to-day level. This pioneering effort was to be a step towards the implementation of a global change-over to alternative energy sources and thus reduce the CO2 emissions in the long term. Hydrogen is the ideal energy carrier as it does not contain carbon atoms, the emissions caused by combustion have no hydrocarbon. There are many other areas of operations that the firm is addressing but cannot be discussed here for lack of space. Suffice it to say that the BMW group is aligning itself with the new demands and requirements of its external environment in order to be in the forefront of the efforts towards assuring sustainable development for the planet. 2. How do these activities contribute to BMW’s differentiation strategy and the unique position in the industry that BMW has achieved? One thing that distinguishes BMW from its competitors is its ongoing efforts to be on the cutting edge of technology. The unique position of BMW has already been achieved. It is one of the highest-regarded companies in the world, and together with Mercedes Benz enjoys the highest brand equity in the automotive industry. The BMW car is a model of high performance, best quality, and prestige. It is owned by people who "have made it" and people with dynamism still reaching towards the peak of their careers. It has had product differentiation for some time now so that buyers are often willing to pay for a BMW despite its high price. The innovations that BMW Group is continuously pursuing have to do with keeping up with the changing demands, requirements, and preferences of consumers. No less important is the aim of the company to be at the forefront of modern developments in the automotive industry, particularly in response to the needs of the environment to make car production sustainable in the long run. II. NETFLIX 1)Describe what you think Netflix’s competitive strategy is, using Miles and Snow’s and Porter’s frameworks. Explain each of your choices. What competitive advantages do you think Netflix has? Have the resources, capabilities or core competencies of Netflix contributed to its competitive advantages? Explain why? Main competitor Blockbuster launched the total access program 2 years ago by which the subscriber is allowed to download the best movies online with convenience, and in addition they could take the movie to the Blockbuster store and exchange it with available movies for free. To counter this strategy, Netflix improved its services (see functional strategy below) and was "positioning Netflix as a film investor and source of high-quality content." Despite the competitive moves of Blockbuster and others with regard to online movie downloading, Netflix continued to rack up impressive revenue and profit figures and double-digit annual increases in its business. Based on the Miles and Snow typology, I would consider Netflix as a prospector organization because of its tendency to locate and exploit new product and market opportunities. As a company continues to grow, however, it tends to assume characteristics that are either analyzer or defender type. Proof of this ability to make adjustments to take advantage of opportunities in the environment is its decision to do away with deadlines for returns and penalties attached to late returns. It has also gone into film investing. Its expansive list of movie titles and its wide network all over the United States makes the company a very convenient store to deal with. Despite the counter-moves of competitors, it continues to show healthy revenue and profit figures. In terms of Porter's five forces, the competition among rival firms is quite intense with Netflix remaining unfazed. Netflix also tries to obtain feedback on customer preferences and accordingly designs its inventory and market approaches to the information it gets. The threat of new entrants is naturally high because of high profitability, but the threat of substitutes would not pose a problem because Netflix is ready to take them on. It has developed considerable brand equity so that it would be difficult to dislodge it from its top position. There are also no apparent supply problems. The government is also not likely to regulate the industry to the disadvantage of the players. 2.What competitive advantages do you think Netflix has? Have the resources, capabilities or core competencies of Netflix contributed to its competitive advantages? Explain why? According to its website, Netflix has presently over 100,000 DVD titles. Subscribers can create their list online; delivery is free and is completed in 1 business day for about 95 per cent of all deliveries from its 100 shipping points all over the United States, with prepaid return envelopes. One may keep a movie for as long as one wants and return it to get a new one from one's list. In addition to DVD by mail, a subscriber would also be able to watch movies online instantly, as part of the membership package without extra charge. Do Netflix’s functional strategies support its competitive strategies? Explain with details and examples. It is rated no. 1 in online retail customer satisfaction by Nielsen recently and for 7 consecutive periods by another survey outfit. This means that the company is doing its operations and marketing functions very well. Reasons for such ratings: It is considered best in content selection of 100,000 titles and 12,000 choices streamed to the computer and TV bundled under one subscription plan. These advantages would be found difficult to match by competitors. REFERENCES Hitt, MA, Ireland, R.D. & Hoskisson, R.E. (1996). Strategic management: Competitiveness and globalization, (2nd ed). St. Paul, MN: West Publishing Wheelen, T.L. & Hunger, J.D. (1992). Strategic management and business policy, (4th ed). New York: Addison-Wesley Publishing, http://www.enotes.com/management-encyclopedia/miles-snow-typology http://www.netflix.com http://bmwgroup.com/e/nav/index.html?../0_0_www_bmwgroup_com/home/home.html&source=overview Read More