BMW Company Market Expansion Strategy

Subject: Company Analysis
Pages: 3
Words: 566
Reading time:
2 min
Study level: College

BMW’s Decision to Enter New Markets

Marketing is becoming a challenge for corporations especially with the advent of globalisation. There is increased competition among corporations as they compete for few and saturated markets available for their products. The automotive industry is a typical case of increased competition due to globalisation. Companies are diversifying their markets, as well as products as a way of gaining a competitive advantage over rivals in the industry. For a company like BMW, its home market in Germany and generally Europe is already saturated. As such, moving abroad is one marketing strategy that BMW can employ in expanding its operations.

By moving abroad to emerging markets like China, Japan, Brazil and India, BMW would be diversifying its market to reach a wider consumer network. However, with abundant options at the disposal of customers, differentiation is vital for BMW to gain an edge over rivals. For instance, BMW’s industry rivals have also diversified their markets. In essence, vehicle buyers already have other car models within their markets, other than BMW models. For BMW, differentiation would enable it to offer products with unique features to beat off competition. Such products would meet the tastes, needs and preferences of customers. Furthermore, through innovation, BMW can develop unique products at lower costs, compared to rivals.

On the other hand, the key challenge that BMW marketers face as they move abroad is stiff competition from other industry players. As a company with a new product, BMW requires smart strategies to compete in a market full of established automobile companies that offer fierce competition. New BMW products have to compete with the likes of Mercedes, Porsche and Audi for customers. Such competition has a direct effect on BMW’s product prices. One strategy that can help BMW overcome the challenge is through mergers and partnerships with already established companies on the market.

Even as the company moves abroad, its key challenge is marketing its new products among young drivers. At the same time, such a move should not offend its older customers who are the company’s profitable customer segment. Entry into new markets also means BMW has to abide by legal regulations within new countries. For instance, most countries encourage companies to develop products using emerging technology to curb environmental challenges. Consequently, BMW should develop products at lower costs while at the same time reduce pollution in its operations. Nonetheless, with a volatile automobile market, moving abroad for a BMW can be a risky venture.

BMW’s Choice of New Markets to Enter

Market diversification for BMW can entail entry into existing and emerging markets. By introducing a new product, BMW should start by entering the U.S, its largest market followed by European countries like France, the UK and Germany. Thereafter, BMW can undertake its marketing operations overseas through establishing subsidiaries in Eastern Europe, Africa and Latin America. Most of these regions have proven to have high demand and have consequently recorded high sales previously. For instance, China, Turkey, South Korea and India have previously recorded double-digit rates in BMW sales. China is a key market for new BMW products given its low penetration rate, compared to other developed countries. In its expansion strategy, BMW can put up assembly plants in these countries to increase its operations. More so, in order to increase its overseas operations, BMW can expand its production capacity in emerging markets such as India and Russia.