Comparison of BMW-760 and Benz-S600
Executive Summary
Currently, BMW group and BENZ are the two companies manufacturing top car brands. Their top brands that exist in the market currently include BMW-760 and Benz S600 respectively. Even though both of these companies enjoy good reputation in the market, they are affected by macro environment and microenvironment within the auto industry. Some of these factors are cultural, social, economic, political, and regulatory factors. The SWOT analysis helps in the analysis of the market environment of these companies. Marketing strategy and positioning within the industry necessitates proper strategies. On the other hand, to be able to adopt proper strategy, market segmentation plays a significant role.
Table of contents
Introduction 4
Industry background 4
Company Background 5
Macro-environmental factors influencing the automotive industry 7
Micro-environmental factors affecting the automotive industry 9
SWOT analysis of Mercedes-Benz 9
SWOT analysis of BMW 10
Market Analysis 11
Market Segmentation 12
Target Markets 12
Targeting Strategy 12
Positioning Strategy 12
Recommendations 13
Introduction
Currently, BMW group and BENZ are the two companies manufacturing top car brands. BMW started its operations in 1917 and at present, it is one of the top-ten car manufacturers worldwide. Some of its top brands in the car manufacturing industry include BMW, MINI and Rolls Royce. In contrary, BENZ came into existence in 1886 when Karl Benz’s patent was approved, and was therefore allowed to start manufacturing the first motorcar. In the year 1901, Mercedes name was acquired by Daimler, who later merged with Benz in 1926. From the time when the two companies merged, they have been manufacturing luxury and top automobile brands in the market. One of the utmost brands of the German based car manufacturer is Mercedes Bens S600. This brand is described as beautiful and comfortable to drive; the many benefits of travelling in this car include its grand style in all roads since it is well-equipped with the entire accessories one would need. However, the BMW 7-series also present the peak of BMW automobiles. Amongst BMW 7-series, the BMW 760 is an outstanding luxury car that is full of advanced technology to provide an individual with a safe and comfortable drive. In this report, BMW-760 car model is compared and contrasted with the Benz S600 car. The company overview of these brand manufactures is described. In addition, the macro and micro environment of the two companies and their SWOT analyses are also discussed.
Industry background
Just like the discovery of airplanes, the advent of the car industry has had remarkable effects on everyday lives. The car manufacturing industry can be described as both capital and labor intensive. The main factors considered in the production and sales line include labor, materials and advertising. With the labor segment, machines and robots play a hugely significant role. Additionally, there are labor expenses involved in designing and manufacturing of automobiles. The principal raw materials used in the manufacture of cars include steel, dashes, aluminum, tires and seats among others. These materials are obtained from different suppliers. The motor industry is also packed with advertisements; most car manufacturing companies spend lots of cash every year for advertising purposes and market research, all aimed at satisfying the demands, tastes, trends and preferences of their consumers. Increased completion in the market is also a driving force towards advertisements in the industry. Ever since 1990, globalization in the car manufacturing industry has immensely increased by the main players in the industry. The trends encompass significant technological advancements to meet the desire of customers. These advancements involve much development in computer and computerized systems both in production and in the car systems. This has profoundly influenced the industry, with most contemporary companies focusing more on modern designs based on technological innovations coupled with automation.
Company Background
BMW group is strongly established in the car manufacturing industry, especially in the motorcycle segment. The company aims at creating a profitable progress and generating higher returns by emphasizing on the premium divisions of the global auto markets. Based on this approach, a widespread product development and market aggression was instigated in the year 2001. This translated to an increase in the product range of BMW group and their strong position in the world market. The brands for this corporation are top world-class and are linked to high performance, well-built and significant technological innovations. Some company proponents claim that BMW’s brands are one of the top brands globally. The company endures to initiate a stream of advanced products to handle stiff competition offered by its competitor – Mercedes – to be the best luxury car manufacturer in the world. In addition, BMW has been at the cutting edge in introducing new Information Technology choices to improve the driving experience for its consumers. Besides the iDrive that was first presented in the 7-series such as BMW 760, another valuable technology which is currently accessible in most top models is Connected Drive. This innovation adds greater functionality. BMW was the first corporation to provide MP3 connectivity and incorporation of RSS feeds together with weather information. In the year 2007, BMW group collaborated with Google to provide a PC compelled course forecasting service. Throughout the past five years, the BMW’s regular yearly investment has been about €2,300 for each car, matched with €1,700 spent by stiff competitor Mercedes. In addition, much of their investments have been geared towards the company’s Efficient Dynamics programmed, aimed at making engines more effectual, enhancing aerodynamics, decreasing weight and seizing energy during braking. All this shows that BMW group is a key player in the industry and effectively applies technological innovation to manufacture and maintain the preferences of its consumers.
On the other hand, Mercedes-Benz is a German car manufacturing company, most popular for producing innovative and magnificently designed cars. The range of products for Mercedes-Benz includes Mercedes-Benz, Mercedes-Benz AMG and Mercedes-Benz McLaren brands. Their brands include both high luxury cars and the high-quality trivial autos of the cool brands. Much production takes place in Germany, although other production facilities are also located in the United States, France, South Africa, Brazil, India, Malaysia, Thailand, Vietnam, Indonesia and China since 2006. Technological innovations involved in Mercedes cars have set the modern standards for auto design and embrace the internal combustion engine. Other features include the honeycomb radiator, the float carburetor and the four-wheel braking systems. These features have become typical for modern vehicles. Most presently, Mercedes came up with advanced Electronic Stability Programme (ESP). This innovation is highly suitable for improving the driving experience of consumers and providing them with an improved car control. This innovation generated a significant image of the company, and has developed a brand uniqueness and devotion from its consumers. For a long time now, the corporation has attested that it can produce top quality cars which have won most car awards worldwide. In line with the company’s inventive nature, Mercedes have as well been involved in the electric car production. In the year 2007, they manufactured numerous low carbon cars. Mercedes-Benz S600 is one of their latest brands. This car brand is excellently comfortable to drive and is extremely fast. It is well furnished and has all the fixtures that an individual may require for superb comfort while taking long journeys.
Macro-environmental factors influencing the automotive industry
Currently, car marketers face an amplified challenge in assessing their marketing environment. This is owed to an increase in the number of exterior influences that continue to change the purchasing and spending habits of consumers. Some variables are irresistible like distribution of revenue within a country or passed regulations. With these factors, the best tactic is analyzing and comprehending these shifts and looking for the best statistics-based strategy to adapt in the market. However, there are also other factors that can be managed easily. For example, an auto company can remain at the top in the market owing to its new technology or can as well create a marketing strategy that is globally responsive and sustainable. Therefore, a company’s marketing prospects as opposed to their threats is based on how they are preemptive in researching the macro environment, and how best they can adapt to these influences and alter their marketing strategies.
The macro environmental factors affecting the auto industry is comprised of the greater societal forces that impact on the micro environment of the industry. Some of these factors include demographical changes, economical, natural, technical, political and cultural factors. These factors influence the micro industry environment composed of the company, the suppliers, market intercessors, consumer markets, players and societies. Currently, the major influences in the auto industry include the ever increasing cost of crude oil, regulation in relation to safety standards as determined by the policymakers and government executives, an upsurge of technological trends that changes quite rapidly and even socially as most people reconsider their values in relation to their environment. Another revolution that has immensely affected the auto industry is the present economic environment or economic influences, that impact on the buying power of consumers and their expenditure habits. In connection to the great recession, most consumers are spending less money but demand more value. This is not economical bearing in mind how costly it can be to manufacturer a top quality car. Regulation within the industry by policymakers reduces the efficiency of production of most car manufacturers since they have to meet the standards set by the regulators. Technological innovation is one way in which auto manufacturers try to maintain their top positions in the industry. However, technology is rapidly changing and as such, newer technologies do not last in the market. This proves quite expensive for auto manufacturers as they attempt to meet the endless needs of their consumers.
Micro-environmental factors affecting the automotive industry
The greatest micro-environmental factors that influence the automotive industry are the international environment and company internal factors. Consequences of the worldwide or universal environment are evident; the car manufacturing companies are forced to perceive business environment from an international perspective. Secondly, safe and secure markets no longer exist. The world is continuously reducing in size because of advanced means of transport and communication services. This means that most companies can now access the market in almost every part of the world. Business managers are forced to learn foreign languages and currencies to be able to trade effectively in the world market. With globalization, companies are also affected by the political and legal uncertainties in different countries. The micro industry of the car industry is also composed of the company itself, its suppliers, market intercessors, consumer markets, players and societies.
SWOT analysis of Mercedes-Benz
SWOT analysis is crucial to determine the position of a corporation in the market by making use of its macro and microclimate. SWOT is a short for strengths, weaknesses, opportunities and threats.
Strengths
Mercedes-Benz is the top corporation within the car manufacturing industry. It is a reputable company providing high quality cars and relishes good labeling, giving itself adequate respect and prestige.
Weaknesses
The fact that Mercedes-Benz manufactures top quality cars implies that they are relatively expensive due to exceptional style and admiration. Promotion is a transparent weakness too. In addition, since the cars are of high quality, manufacturing takes a considerable amount of time. This compromises on impatient customers.
Opportunities
There are also lots opportunities that can make the company generate lots of income. The company is able to manufacture clean new cars by applying technological innovations. Flourishing new markets such as China also provides a good opportunity for exploitation.
Threats
Competition is the main threat to Mercedes-Benz. Currently, Asian cars are dominating the world market. Additionally, Japan and America have raised the amount of taxation for luxury cars making them less desirable by most consumers.
SWOT analysis of BMW
Strengths
Being, one of the top reputed firms, BMW has several strengths. First, it engaged highly skilled labor in their production thus building an insight of valuable difference amongst purchasers. This helped it gain competitive advantage in the market. It has also established a firmly managed distribution network and consequently promoting its brand. BMW also embraces high tech innovations such as airbags, ABS and fuel injection systems.
Weaknesses
BMW was involved in acquiring expansion of its shareholders, since the family essentially owns 46% of the company. However, this policy became a deterrent particularly in nations where these strategies specified otherwise, denying venturing in such locations. The UK rover crisis affected the credibility of BMW especially due to indecisive of the management.
Threats
Improved automobile manufacturing have resulted in increased stiff competition, and oversupply alongside discrepancy between the demand and supply. Environmental issues and escalating fuel prices increased demand for smaller cars. Demand for decreasing costs and burden to comply with the regulatory standards in the auto industry have threatened the brand management operation.
Opportunities
Consideration of acquirements and unions by BMW through restoration and improvements of their product policy is particularly significant. They will as well look at sustaining close vicinity to potential buyers to promote market segmentation. The upgrade of car technologies aimed at producing safer products is also a perfect opportunity for BMW.
Market Analysis
Marketing strategy applied by both companies includes Product, Price, Place and promotion. These strategies can also be protracted to marketing services such as people, processes and physical evidence. However, market segmentation together with knowledge of the target markets are the most significant features of any marketing strategy. Marketing strategy for the two, companies involve the following steps.
Market Segmentation
The first step is market segmentation, which involves identification of consumer desires and market segments alongside the development of profiles of ensuing from market segments.
Target Markets
The second step is the identification of target markets. This is attained by choice of a market segment coupled with a thorough assessment of the appeal of each market segment.
Targeting Strategy
Third is targeting strategy. This encompasses marketing planning which takes into account development of a marketing combination for each segment, according to the selected segment.
Positioning Strategy
Finally, there is positioning strategy, which involves the advancement and positioning of market segments. At this stage, the identification of differential benefits of each market segment is very significant.
Recommendations
Obviously, both corporations need to maintain their top positions in the automobile industry. However, to be able to achieve this, they will have to adopt their strengths and their opportunities. They will also have to apply proper strategies to effectively meet their objectives and targets of their consumers by preserving quality and safety. Nevertheless, these are will be determined by the several market forces that come into play in the macro and micro environment of the industry. They will have to position themselves to take strategic gain as they assume resilient approach.
