The German carmaker, BMW, plans to invade the United States luxury-car market. Its goal is to boost United States sales by 40% in the next five or six years. This goal cannot be achieved easily. Cadillac is the only automaker that sold that many cars in the United States, and that was in 1984. There are many components of the general and specific environment that affect this company.
There are many components of the general environment that affect this company. The current economic conditions do not affect this company. The economy is slow, but statistics show that the luxury car market does better that the rest of its industry. Through the month of August, a month in which the economy was slow, the auto industry remained low while the sales of luxury cars were up seven percent. Many social conditions affect the company. BMW will target a younger group on buyers by building smaller and sportier cars and sport utilities. In addition, the company will offer lower leasing rates to customers whose leases will be up soon. The company will try to lure customers into buying new cars by offering good deals on cars. The technological changes BMW have implemented were not well accepted by consumers. BMW implemented the iDrive, a high-tech device that controls the car's audio system, in some cars. The device is very high-tech, and consumers have complained that it is just too hard to learn. It even caused one consumer to buy a Mercedes, a prime competitor of BMW. Many components of the general environment affect BMW.
There are components of the specific environment that affect this company also. For instance, the customer's reactions towards the styling of BMW's 7-series were not favorable to BMW. Customers did not appreciate, to say the least, the styling of the back end of the 7-series. As a result, BMW will rectify the problem by offering a toned down version of the car to satisfy customer's demands.
