germany and bmw
TRANSCRIPT
Made by
• Largest national economy in Europe• It is the fourth-largest by nominal GDP in the
world• Also the fifth-largest by GDP.• Germany recorded the highest trade surplus in
the world worth $285 billion.• Germany is the third largest exporter in the
world with $1.511 trillion exported in 2014.
ECONOMY
• GDP of about $3.915 trillion(2014)
• GDP per capita $48,228
• Service sector- 70%(of GDP)
• Industry- 29.1%
• Agriculture- 0.9%
• Exports account for 41% of national output
SECTORS
• With its central position in Europe, Germany is an
important transportation hub. This is reflected in its
dense and modern transportation networks. The
extensive motorway (Autobahn) network that ranks
worldwide third largest in its total length and features a
lack of blanket speed limits on the majority of routes
TRANSPORT
Overview of German Auto Industry
• Germany - one of the top 5 automobile manufacturers
• VW, Audi, BMW, Daimler, Porsche all come from germany
• The largest share of passenger car production in Europe with
over 29% market share (France - 18%, Spain - 13%, UK - 9%)
• Car-making accounts for 17% of German exports
• 60 million new cars are being produced in Germany every year
6
• Increasing competition from China and India
• EU Emission Regulations
o 130 grams of CO2 per kilometer to be met by 2012
o Only 6 German-made models meet the target
o Hybrid Cars - competitive advantage
• Ernst & Young Study: Germany needs to double its efforts in R&D in
order to keep its leading position
• Shifting Focus (Similar to Computer Technology)
Main challenges of the industry
1) INTRODUCTION
• Founded In Munich,1917
• Acquisition Of Rolls-Royce In 2003
• 2013
• 2 Million Cars Sold
• 1,16,230 Employees
• Revenue €80.4B
• Most Sold Car: 3 Series
1) INTRODUCTION BMW Group
23 production and assembly plants in 13 countries
1) INTRODUCTION Production
12 R&D plants in 5 countries
1) INTRODUCTION Research & Develpoment
1) INTRODUCTION Market Share
77%
16%
6%
1%201
3
1) INTRODUCTION Sold Cars in brands
BMW 16,55,138
Mini 302,183
Motorcycles 82,631
Rolls Royce 3630Total 21,17,9
65
2) MARKET ANALYSIS
Product-oriented:
All Companies That Offer A Combination Of Luxury And Powerful Cars With A High Level Of Quality And Service
Customer Oriented:
Car Manufacturers Such As Lexus (Toyota), Audi (VW), Porsche (VW), Mercedes-Benz (Daimler).
2) MARKET ANALYSIS Market definition
• The respective market for BMW consists out of the premium segments of the global passenger car and motorcycle market.
• BMW is one of the leading luxury car manufacturers in the world.
2) MARKET ANALYSIS Market definition
Rivalry Among Existing
Competitors
Threat of New
Entrants
Bargaining Power of Suppliers
Bargaining Power of Buyers
Threat of Substitutes
2) MARKET ANALYSIS Porters 5 Forces
Rivalry among existing competitors:
+ some competitors of the same size
+ Low industry and market growth rates
+ Barriers to exit are high (production facilities)
→ High
2) MARKET ANALYSIS Porters 5 Forces
Threat of New Entrants:
+ high initial investments and fixed costs
+ limited access to specialized suppliers
+ existing players have close customer relations (e.g. long-term service contracts)
+ customer loyalty
→ Low
2) MARKET ANALYSIS Porters 5 Forces
Bargaining Power of Buyers+ Buy large volumes (e.g. company car for many
large companies)+ Switching to an alternative product is relatively simple and
not related to high costs+ Products are undifferentiated and can be replaced
with subsitutes− Product itself of strategic importance to customer
− Customer knows about the production cost of the product→ Medium
2) MARKET ANALYSIS Porters 5 Forces
Bargaining Power of Suppliers:
+ Supplier’s products are customized and valuably differentiated
+ high switching costs to alternative suppliers
+ JIT production
− Market is dominated by many suppliers (sub suppliers)
→ High
2) MARKET ANALYSIS Porters 5 Forces
2) MARKET ANALYSIS Porters 5 Forces
Threat of Substitute Products & Services:
+ close customer relationship
+ brand loyalty of customers is high
− No penalties or low switching costs for customers
− Current trends
→ medium
• Franchise system
2) MARKET ANALYSIS Distribution Channels
• branding• brand loyalty• brand awareness
• global positioning• positioning in established
markets• positioning in growing markets
• innovation rate• differentiation
• hybrid
2) MARKET ANALYSIS Key Success Factors
3) COMPETITIVE LANDSCAPE
World Ranking of manufactureres in cars sold 2013 in thousands
1.Toyota2) G.M.
3) VW4) Ford
5) Hyundai
6) PSA7) Honda8) Nissan
9) Fiat10) Suzuk
i...
12) Daimler...
14) BMW...
41) Porsche 0 2.000
4.000
6.000
8.000
Cars
Commercial Vehicles
3) COMPETITIVE LANDSCAPEMarket Structure
3) COMPETITIVE LANDSCAPEDirect Competitors
3) COMPETITIVE LANDSCAPEIndirect Competitors
3) COMPETITIVE LANDSCAPECars sold (2013)
0 325.000
650.000
975.000
2.300.000
Porsche
85.900310.000
975.000
1.183.000
21,80,000
Lexus
Mercedes
Audi
BMW
3) COMPETITIVE LANDSCAPENet sales in million € (2013)
0 12.500
25.000
37.500
50.000
Porsche
7.46612.680
41.318
29.840
50.000
Lexus
Mercedes
Audi
BMW
3) COMPETITIVE LANDSCAPEEmployees (2013)
0 25.000
50.000
75.000
100.000
Porsche
12.202Lexus
11.520
97.00058.0
11
100.041
Mercedes
Audi
BMW
1) INTRODUCTION
1) INTRODUCTIO
NPORSCHE• Founded In 1931
• Headquartered in Stuttgart• 70% of Porsche cars ever built are still on
the road• First Porsche office was opened in Stuttgart
• Offered consulting services• Motor vehicle development work
History of Porsche
“I couldn’t find the sports car of my dreams, so I built it myself” (Ferdinand Porsche)
• Ferdinand Porsche founded the company in 1931, with main offices in the centre of Stuttgart, Germany.
2) PORSCHE’s BACKGROUND
Rivalry Among Existing
Competitors
Threat of New
Entrants
Bargaining Power of Suppliers
Bargaining Power of Buyers
Threat of Substitutes
3) PORTER’s 5 FORCES MODEL
• The threat of new entrants is very low in the automobile industry. The industry is very mature and it has successfully reached economies of scale.
Barriers to Entry (High) Capital Requirement Brand equity Knowledge (Technology) Product differentiation. Large economies of scale
3) PORTER’s 5 FORCES MODELThreat of new entrants (Low)
• Competition between suppliers is high as a contract with Porsche represents a significant opportunity.
• Porsche make their own engine parts and partnership by large suppliers (such as VW), which provide core components, could reduce Porsche potential to exercise bargaining power.
3) PORTER’s 5 FORCES MODELBargaining power of suppliers
(Low)
• The buyers also are a significant portion of the industries revenue. If they can not keep their buyers happy then they risk losing them to their competitors.
• The reasons why the power is not completely high is that the buyers are not large and few in number. Finally customers are willing to pay premium for the brand.
3) PORTER’s 5 FORCES MODELBargaining power of buyers (High)
• Direct substitute for Porsche in luxury sport car industry For examples: 1) BMW X6 M is slightly faster than the Cayenne Turbo 2) Mercedes-Benz ML63 is less expensive than the
Cayenne but slower 3) Audi Q7 is the slowest of the Pack but has more interior
space and torque • However, substitute do not offer the same quality as
Porsche.• Porsche has been able to produce equal performance and
prestige yet at more affordable prices
3) PORTER’s 5 FORCES MODELThreat of substitutes (Medium)
Porsche is under financial crisis because in 2008 it failed to secure the capital needed to acquire Volkswagen, instead in 2010, there was a reverse takeover and Porsche was acquired by VW.
Porsche will face a problem of moving its executives and experienced management by VW into key roles with other automotive brands as part of integration plan into VW Family.
4) ISSUES WITH PORSCHE
Potential Brand dilution will happen since its switching from focus approach to broader market to extend the Porsche product line.
How the market would react to multiple sports cars offerings from Audi, Lamborghini, Porsche…etc.
Porsche’s greatest challenge would be the impeding CAFÉ regulations (regulations that could spell an end to Porsche’s sales in its number one market, US).
5) ISSUES HIGHLIGHT
6) PORSCHE’s STRATEGY 2018
We’ve always been ambitious.And we’ll make sure it stays that way.
7) VW’s STRATEGY 2018
• To become : “The most successful and fascinating automaker by 2018”
• Porsche will help VW achieve its goals by sharing its technology with other VW brands, increasing production and diversifying the Porsche product line
• VW has seen the success of Porsche’s recent diversification and is looking for an even broader offering.
Thank you for yourattention.
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