Luxury Brand Management and International Events - Case Study Example

Executive Summary

The main objective of the document is to provide more insight on Bugatti, which is one of the most outstanding luxury car brands. The report particularly focuses on Bugatti’s identity and image as well as its strengths, weaknesses, some of the opportunities the luxury carmaker should consider exploring along with an analysis of the threats it is facing. In addition, the report covers some of the factors that are critical to the success of Bugatti as a brand. In some instances, organizations routinely take part in international events, with the anticipation of the events supporting their growth strategies. In that regard, the report recommends some of the growth approaches that the organization should embrace implement in order to ensure its continued progress.

Introduction to the Brand

Bugatti is a luxury car that is produced by the France based Bugatti Automotive Group, which is a subsidiary of the Volkswagen group after the latter purchased it in 1998. Even after being acquired by the Volkswagen group, Bugatti did not deliver its first car until 2005. Between 1998 and 2001, however, the firm heavily focused on coming up with the ideal concept car. Presently, Bugatti is known for the remarkable and high-performance Bugatti Veyron 16.4, which trades for well above $1.5 million (Bugatti Automotive Group). In the next few years however, the Veyron is set to be replaced by 1500 horsepower Bugatti Chiron, whose production has already been limited to 500 units.

Brand Analysis

One of the main features that make Bugatti Veyron a unique brand is third party perceptions, which come about when people talk about the car on social media platforms or on the streets when one drives by. In addition, the Bugatti Veyron brand has been enhanced by the set of special features that it comes with (Cheetham, 20120. One such feature is the engine of the 250mph super car, which is fitted with four valves per cylinder, bringing the total number of valves to 64. The sophisticated internal oil path it is fitted with, equally mediates the unique brand of the car. The oil path, whose functionality is similar to that of Formula One cars, is important mainly because it ensures that the engine along with various parts of the car is properly lubricated.

Another major reason why Bugatti Veyron is regarded as a unique brand is the high performance it is associated with. In as much as the high performance is brought about by the different specifics of the car, it hugely results from its continuously variable electric controls. One of the main concerns that have often been associated with cars in recent past is their handling of waste (Cheetham, 2012). This factor particularly became known following the emission scandal that faced the Volkswagen group. Nonetheless, the Bugatti Veyron has an ideal way of dealing with such concerns. This is because the car is fitted with a massive radiator, which serves the function of managing all the waste and heat produced by the car. Car lovers would admit to the fact that there is nothing interesting in cars like its transmission and the transmission of the Bugatti Veyron is another factor contributing to its uniqueness (Cheetham, 2012). Its seven gears along with the double clutch system bring about the ease in its transmission. Additionally, the ease in transmission is mediated by its sequential shifting. Another main feature that helps in identifying the Bugatti Veyron as unique is its overall appearance. Its sophisticated and stylish appearance results from the compact dimensions of the car, which stand at 35 inches wide, 28.7 inches high and 27 inches long.

Since its launch and first delivery in 2005, Bugatti Automotive Group has assembled only 450 units of the Bugatti Veyron, with each unit going for in excess of $1.7 million. Having sold the last of the 450 Bugatti Veyron units in 2015, the Bugatti Automotive Group has already announced a new concept car; the Bugatti Chiron, which is set to replace the Bugatti Veyron. The firm further added that only 500 units of the Chiron would be assembled, with each unit going for in excess of $2.5 million. In that regard, it is important to note the fact that the uniqueness of the Bugatti brand is to some degree brought about by the fact that the organization produces only a few units of each brand. That might go some length in explaining the reason why Bugatti Veyron are few even in the most well to do regions and draw significant number of observers whenever they are driven around.

SWOT Analysis

Strengths: One of the main strengths of Bugatti along with its parent company is the fact that an experienced management team monitors its daily operations. Another factor that works to its favor is the fact that it the Automotive Group has an already existing and reliable distribution network that plays a key role in making sure that the firm meets its sales (Derrick, 2013). In addition, Bugatti is a strong brand and has a set of loyal customers, who have fallen in love with the brand, and are always willing to pay significant sums of money to acquire the funds.

Weaknesses: In as much as there are several factors that aid in the growth of Bugatti, the brand equally faces a number of challenges. One of the weaknesses of the brand is the fact that the luxury sports car field is quite competitive, and already has a number of established automobile companies. Another weakness is the fact that Bugatti controls a small share of the market (Derrick, 2013). This is demonstrated by the fact that the organization has sold only 450 units in eleven years and is set to produce only 500units of the Bugatti Chiron. One more weakness is that Bugatti has not diversified. This is because over the last eleven years, the firm has produced only one model, which is the Bugatti Veyron, whereas its competitors have been introducing new concept cars into the market at regular intervals.

Opportunities: Amidst all the weaknesses of Bugatti, there are opportunities that the firm can exploit in order to enhance its brand image and identity. One of the major opportunities is the fact that there are new markets that the firm can exploit such as in China, UAE and South Africa among other markets (Derrick, 2013). Presently, the brand is only popular within the US and across Europe. The luxury carmaker should equally come up with strategies that are aimed at taking advantage of the continuously increasing income levels, for it translates to many people being in a position to afford the brand.

Threats: Apart from the highlighted opportunities, Bugatti is equally facing significant amount of threats. One major threat is increasing competition from different corners. The increase in competition is particularly risky because some of its competitors may lower prices considerably. Another potential threat facing Bugatti is the continuous advancement is technology (Derrick, 2013). This is brought about by the introduction into the market of electric cars such as the Tesla models, which may in the future decide to explore the world of luxury cars. Another potential threat is that of unforeseen business situations. Some of this, though unforeseen can be disastrous to any organization. An example is the economic meltdown of 2007/2008, which affected several businesses globally.

Bugatti Growth Strategy

Strange turn of events has been taking place within the car industry over the last three years. This has mainly been the fact that cars that are more expensive have been selling faster than those that are less expensive. Presently, luxury cars that in the past made less than 1% of cars globally, are now multiplying at a substantial percentage. One of the main reasons for the growth that has been taking place is the fact that the number of well-off consumers has been increasing steadily, resulting in improved demand for the luxury cars.

For Bugatti to record substantial growth therefore, it is important for the organization to widen its scope of operations. The widening of its operations, which should even include enlarging its assembly factories will supplement the growth of Bugatti mainly because it will multiply the number of cars that the automobile maker will be able to produce at a particular time. This strategy is ideal for the luxury automobile market, for it has worked effectively in improving the sales and overall output of other luxury carmakers such as Ferrari, Rolls-Royce, Maserati, Bentley, Porsche and even BMW (Lamm, 2008).

As mentioned in the section above, presently, a considerable number of Bugatti drivers are either within the United States or across Europe. This implies that Bugatti has not substantively explored some of the markets where opportunities may exist for them to exploit. For Bugatti to register substantive growth, it should make an attempt of exploring other markets such as Asia, Middle East and Africa. In particular, Bugatti should consider the Chinese market. This is mainly because it has a large number of wealthy consumers. The fact that the percentage of luxury cars on Chinese roads have equally increased from 12% to about 275 over the last six years should equally convince the organization to consider exploring the Chinese market.

International Event Proposal

One of the main activities that organizations should always take part in is marketing of their products and services. In as much as Bugatti is a remarkable brand, with a significant number of loyal customers, the organization should seriously consider sponsoring international events such as the fashion weeks and various sporting tournaments such as golf and tennis among others (Som et al., 2015). Taking part in such activities is not only a marketing strategy, but is equally important in mediating growth of the organization.

One of the mechanisms through which sponsoring international events can aid in the growth of Bugatti is the fact that it will enable the luxury carmaker reach out to a significant number of probable affluent consumers (Chevalier et al, 2015). Another importance of such an approach is that will help Bugatti balance the disparity that exists between ubiquity and exclusivity. Overtime, it has always been assumed that limited availability of particular products often makes them exclusive and in fact helps in justifying the prizes being charged for such products. That notwithstanding, taking part in the international events is a strategy that ensures that Bugatti is available to respond not only to the concerns of its consumers, but other segments of the population that do not drive Bugatti’s. In addition, such an approach is important, as it would help Bugatti understand the some of the perceptions that consumers wield regarding their products.

Critical Success Factors

The luxury car market is one of the most competitive. This is mainly because of the established entities who already dominate it. Presently, some of the most established brands are Porsche, Ferrari, Rolls-Royce, Bentley and Maserati among others (Needle, 2010). That notwithstanding, Bugatti can control a considerable share of the market in case it adopts the correct strategies. For Bugatti to succeed, it has to primarily ensure that it understands the market, and meets the needs and standards set by luxury car drivers. This should include factors such as the performance and appearance of their cars. This is mainly because in case they fail to meet some of the standards, then the consumers will opt for other brands, and will only be loyal if they deliver cars of high quality. Another factor is the delivery duration. Luxury car drivers generally prefer it when carmakers deliver their cars within the shortest duration possible. In as much as assembling a Bugatti is expensive and takes a lot of time, the ideal dynamics would ensure that it manages to produce a significant number of cars at least annually.

Conclusion

In conclusion, it is important to note that Bugatti is one of the most remarkable luxury car brands. Bugatti cars are generally known for their stylishness and high performance. Nonetheless, for Bugatti to grow and control a significant share of the luxury car market, it should adopt the appropriate strategies, one of which is the need to understand the market within which it operates.