Forces of Bargaining Buyer (Bmw)

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STRATEGIC DRIFT

Drift is trying to go towards a direction however fail to do that. This could be good or bad. Strategic drift is when a company fails to work in line with environmental changes however incremental development is evidenced but there is a strong influence of the cultural and historical factors. BMW and its emphasis on brand development incrementally with the changes in the environment when it outsmarted competition. However the path way dependency paved way for the acquisition of Rover an English brand. This could be due to the companies need for huge production and the consideration happened during that time. This would be the strategic drift. The company beaded with the English brand when it was in the flux phase of the strategic drift. But when the new CEO was appointed BMW went for transformation and Rover was sold to Ford. After this BMW started to working in tandem with the changes in the environment and developed incrementally. Power of Buyers - Medium

While buyers are individuals and are not grouped together, they still have an immense amount of information available to them regarding the pricing and cost to manufacture a BMW. As a result, buyers do have some leverage in being able to negotiate a purchasing price from BMW. When thinking about the potential buyers in a Porter’s 5 forces model, backward integration and switching costs come to mind. Backward integration meaning the possibility that costumers of the car industry are starting to produce their own cars is considered very small. The Switching costs of the general car industry is however very low. It means that it is very easy for the costumers to switch to another car brand if they are not happy with their current one. This gives customers bargaining power over the car manufacturers. For the premium automobile market the situation is a bit different. Customers in this segment have a reason for spending more than necessary for a car. Customer do often have high expectations...
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