BMW is a manufacturer of luxury cars. Within this category, it is distinguished between traditional and functional luxury cars. Traditional luxury cars are mainly produced by U.S. manufacturers like Cadillac and focus on customers that want to enjoy a soft, comfortable and living room style appearance (Bernhardt & Kinnear, 1994). Functional luxury cars are represented primarily by European manufacturers like BMW and focus on customers that want the communication with the road via steering and suspension systems (Bernhardt & Kinnear, 1994). They enjoy a pin-point steering and precision suspension system that put the driver in touch with this surrounding and inform the driver of the immediate environment (BMW Corporation, 2004). Following, the impact of each of the five forces on the functional car manufacturer BMW will be analyzed.
Intensity of Competitors
The automobile market is at the maturity stage of the life cycle, locally and globally, due to an increased number of competitors from domestic and foreign markets. The automobile market is characterized by a low potential for market growth, but high sales and profit potential (Murtagh, 2004). The following figure demonstrates the positioning of auto manufacturers within a global context.
The brand that our group chose to assess is BMW. BMW, which stands for ‘Bayerische Motoren Werke’, is a major European manufacturer of luxury cars. The headquarters of this multinational corporation (BMW Group) is in Munich, Germany. The company has built substantial brand equity over the years through the continuous branding efforts for high quality products.
BMW is a manufacturer of luxury cars. The luxury car category includes both traditional and functional luxury cars. U.S. manufacturers like Cadillac m ...