An analysis of the attractiveness of the luxury car industry with respect to Jaguar, based on Porter’s Model of The Five Forces of Competition.
Although India is a developing country, in the last few years due to economic crises, the country has been facing numerous challenges. Despite the situation, very recently it has been acknowledged that the Indian market has seen as increase in the demand for luxury items specially Luxury Cars. Another fact to be considered is that the demand of such cars is not only increased in Tier-I cities but also in Tier –II and Tier-III cities. In view of this shift in buying preferences, global luxury car brands like BMW, Mercedes Benz, Jaguar, Aston Martin, and Lamborghini and others now have their eye on Indian
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One of the most significant barriers comprises the brand equityenjoyed by most established brands. The repute of the brand is extremely important to customers; luxury brands such as Jaguar, Mercedes-Benz, BMW and Audi have a long and magnificent history to boast about, and the companies work hard to preserve the association between them and other symbols of individuality and of top-notch quality and performance.
• Although several Asian companies have developed new luxury brands to compete with the traditional European and American brands, it is extremely difficult for challengers to match the prestige of brands with years of history.
• Another challenging barrier to entry is the huge initial investment required to enter car markets in general. Large amounts of capital are required to set up manufacturing facilities and invest in R&D, among other large expenses. This also creates large sunk costs and makes it hard to achieve economies of scale. The capital requirements are one of the main reasons why new luxury brands have been produced by companies which were already present in the market as large car manufacturers (Toyota’s Lexus and Nissan’s Infiniti) and not by new, free-standing,
A firm can build profits and growth through strategies of differentiating the product attributes, lowering costs to offer the lowest prices, and focus either within the segment or across the industry, (Porter, Michael E. 1980). The generic strategy that Jaguar Land Rover follows is to add differentiated value within the premium automobile segment, known as differentiated focus strategy (John L. Thompson, Frank Martin page 199, 2010). The company has been differentiating itself by launching new product lines, such as smaller cars (Range Rover “Baby” Evoque) priced attractively for first time Land Rover buyers, new models (Jaguar F type and the Land Rover Discovery Sport) to appeal to luxury buyers, and building fuel efficient engines under its environmentally sustainable
The luxury market is growing fast in China and India due to the rapidly increasing wealth levels and standard of living gains. Coach must keep in mind the different cultural backgrounds of each country and take that into account when designing and marketing new products and lines.
The industry for superior luxury cars is a highly exclusive one with a few automotive makers making their presence felt. The major market share is held by Porsche which is known to have formidable rivals like Benz and BMW. The SUV supercar segment is a highly evolving one where manufacturing style localities and units are the decisive forces that ultimately culminate towards the cost of the car.
An increasing economic interdependence of national economies across the world experiences a rapid cross-border movement of goods, service, technology and capital. Luxury goods industry, serve as one of the most competitive industry, emerging and developing rapidly all the time. To a great extent, globalization promotes the development of luxury goods industry significantly in spite of the big shock hit by several times of economic crisis.
Kotler and Keller (2012, pp. 271-272) maintain that there are three main sets of brand equity drivers:
There is a strong level of rival among few large firms in the luxury industry. The firms have differentiated strategy and some although it is not an industry practice offered reduced prices during the Great Recession to improve their sales, some firms were not able to survive and declared bankruptcy. There is a high exit barrier as it is difficult for firms to recover their investment.
One thing that can make or break a company is its brand equity. Brand equity is the value that comes with the familiarity with a company’s branding and the feelings consumers have towards that brand (Brand Equity, n.d.). A company with strong brand equity usually gives consumers a sense of reliability and value; causing a higher inclination to purchase its products. It usually takes
The jaguar is a highly known animal with notable affiliation in the Pre-Columbian Mesoamerican societies and belief systems. All major Mesoamerican cultures proudly presented a jaguar god. Jaguars are known for their power and aggressive strength. They are great hunters and one of the big cats that can tolerate water.
Degree of Rivalry: The degree of rivalry is moderate in the global personal luxury goods industry. The industry is very concentrated and occupied by few large players. These companies do not need compete with price; however, they have high overlap of products’ category. Most of companies have several common characteristics. They have long history and start business in Europe areas; they all provide exclusive products and services backed by their brands; and they all served few amount of wealthiest customers over the world.
Maintenance of the brand image is always the fore most important factor for the luxury brands in order to sustain in the market. is very critical. Therefore, of all the criteria mentioned above, we have determined the brand image is the most important criterion on which we will base our recommendation.
In recent decades, Aston Martin has developed to be an iconic marque symbolized with luxury and elegance since 1913 (Aston Martin, 2015). However, Aston Martin has slowed down the market demand in Europe and North America (KPMG, 2013: 12). Nevertheless, Aston Martin plans to do an investment to expand the global market (Tift, 2015), Meanwhile, because Turkey is the fastest rising country for luxury cars, it seems advisable to target Turkey as a potential developing market (Porturkey, 2013). This report will attempt to evaluate the expansion of Aston Martin in Turkey with macro PESTLE analysis, followed by SWOT analysis, a market entry strategy and concluding recommendation for future marketing strategies based on the
Amount of Capital Required: The automotive industry’s low threats of new entrants is also caused by the extremely high amount of capital required. The major cost for producing and selling automobiles include labor, materials, and research and development (The Industry Handbook: Automobiles 1). “While machines and
In interviews with the FT, many executives says the top luxury brands will continue to be seen, particularly in Asia, as European. Domenico De Sole of Gucci says “ The Asian Consumer really dos believe – whether it’s true or not – that luxury comes from Europe and must be made there to be the best.’
However, due to its unique targeting strategy, it has not win compatible brand recognition among the public. Although Audi enter much earlier than BMW and Benz in the luxury car market, its marketing strategy limited increase of public brand recognition even Audi has over 100 years’ history. Besides, although its styles are highly accepted by the targeting customers, there are a growing number of people who can afford luxury cars for family use in China. Lack of vitality is limit of its further market expansion. On the contrary, its major competitor in China, BMW, has launched a series of marketing strategies to promote its high-performance, manoeuvrability, as well as stylish design to attract young people (BMW, 2009) in order to expand its market share. Therefore, although Audi has achieved success in the targeting market, it may consider further development through diversification in product line and advertising campaign.
In India, car accessories is a new concept which has gained popularity in recent times with growing usage of high end cars. The market can be divided into interior and exterior car accessories. In the Indian market, interior car accessories are more popular. The growing youth is providing a fillip to the market due to their perceptions and preferences. Although small cars are preferred by Indian consumers, the trend of using high-tech accessories in cars is growing rapidly.