Bmw

BMW

The topic of our group was about the luxury brand, BMW. Everyone knows BMW to be a luxury car that the upper middle class tends to buy. BMW has set a high standard for luxury vehicles to come for many reasons. For example, their continuous innovations to their cars, their style, and their reputation with their customers and non-customers. Our paper will talk about the industry structure, structural analysis, dynamics, and competitor analysis.

Our first discussion will be about the industry structure. The bargaining power of the buyer gives us an idea of how the customer feels or the process they go through in order to purchase their BMW. Such questions that are asked are: Is the consumer really spending what the car is actually worth? Buyer volume (how many people are actually purchasing this brand of car and what does this mean for the buyer)? The answers to these questions can be answered. First, we have to think about the status that the customer is gaining by purchasing a BMW. A BMW stands for prestige and wealth, so when it comes to spending multiple thousands for this car, that is a great deal in the public’s and consumer’s eyes. And with the reputation of the company, people believe that they are getting their money’s worth because of the quality of the products that go into making the product. There was a time when the buyer volumes of BMWs were pretty high. But nowadays, the buyer demand has dropped because of the competitors and the consumer demand for something different or more luxurious. To buy a BMW now would not mean anything because there are so many other brands that are added to the industry, for instance, Mercedes Benz, Cadillac Escalade, and Lexus just to name a few. BMW is still the car that symbolizes money, but the customer may not be gaining as much prestige as they would have been a while ago.

There are also things that threaten the BMW Company, like substitutes and newer entrants. Many issues that a company has to guard itself against when it comes to substitutes is the price factor, quality (higher or lower), customer demand for the competition, and competition innovation (what do they bring to the table that BMW is not bringing?). There are other brands that are established competitors like the Mercedes, Lexus, Cadillac, and Lamborghini, etc. These are the upper scale vehicles that the upper classes tend to flock to when choosing a vehicle to drive.

Each brand has a quality and image that many people look for in purchasing a luxury car. But along with just the brand name, they do not want everything to be the same; each company has to cater to different individuals and families. Like each brand of car has come out with an SUV that will cater to the family-oriented consumers, the sports car model for the single, maybe middle-aged group, and the sedan model also for the family-oriented and gas savers. With society and the economy changing everyday, everyone has to be on their toes when it comes to customer satisfaction because society is fickle and very picky when it comes to buying the right car for the right price.

The only rivalries within the automotive industry concern the race toward who can be the first to think of something ground breaking. As far as the economy is concerned, companies are now leaning toward the smaller SUV when it used to be “bigger is better.” They also want to create vehicles that are gas-friendly. Whoever can gain customer interest and economic brownie points first is put ahead of the game and that is the strategy to the company’s survival.

The last factor of the industry structure is the environmental factor. What does BMW contribute to the social and physical environment? For their innovations,