Assignment By: Group 7 November 23, 2018

BMW VS. DISNEY

BMW
1. Short History
BMW BRIEF HISTORY
Bavarian Motor Works (German: Bayerische Motoren Werke AG) or well-known as BMW
is a German automobile, motorcycle and engine manufacturer founded in March 1916 by Franz
Josef Popp, Karl Rapp and Camillo Castiglioni.
The BMW company is headquartered in Munch, Bavaria, Germany. As the parent company of
Rolls-Royce Motor Cars, it owns and produces Mini cars. The BMW company produces
motorcycles under BMW Motorrad. In 2012, a data shows that BMW group had produced
1,845,186 automobiles and 117, 109 motorcycles. Along with Audi and Mercedes-Benz, the BMW
is part of the ‘German Big-3’ luxury automakers, which are the three best-selling automakers in
the world. BMW was first established as an business entity, following a restructuring of the Rapp
Motorenwerke aircraft manufacturing firm in 1917. In 1918, aftermath of the World War I, was
forced to stop aircraft-engine production by the terms of the Versailles Armistice Treaty as a result
of German loss during the World War. Facing the disability of producing aircraft-engine, the
company shifted the production of motorcycle in 1923, followed up by automobile production
later in the 1928-29. The very first car the BMW company produced was named Dixi, based on
the Austin 7 and licensed from the Austin Motor Company in Birmingham, England.
2. Strengths and weakness
Strengths:
BMW is a well-known company with a high status branding that has a very high
recognition factor. BMW has advertised their cars to consumers through media and film industry
greatly over the years showing that their cars are built for all classes. Another Strength is that they
have high budget to invest which can pay for labour, services, or product research. This means that
BMW is a profitable company who has enough money to invest. They also have highly skilled
labour, as BMW is a big company they need skilled labour to make their products because BMW
is a branded company, if the labour is poor the products will be cheap and they can loose customers.
To make customers they have to invest more. The more they invest, more they make profit.
Weaknesses:
Developing new models, is it really worth it.Each day BMW is striving to produce and develop
new cars to satisfy the customers.In the long run, who actually knows if these cars are going to be
a big hit.The company might actually be wasting their time and money in producing a model that
will not be worthwhile.When developing and producing cars it is important to work out whether
or not the car will become one that is popular on the market.
Another weakness of the BMW industry is getting the customers to buy these cars.Hybrid vehicles
will save you fuel, but it will be so expensive that it might be hard trying to find customers to buy
them at such a high price.Another reason the price of the vehicle is so high is because they are
shipped across the United States and also come from a factory in Germany.The expenses of the
vehicles and the shipping rate are what make BMW’s cars so expensive.
BMW having created such a high status of their brand they cannot afford to have any downfalls
this will destroy the brand which has developed over the years to be a brand that ensures customers
their receiving quality and perfection for their money.
BMW has had a tansy to produce cars with complicated and rather disturbing user interfaces in
their cars compared to their rivals who go for a more simplistic and user friendly environment in
their cars.
3. Strategies being employed
The luxury car manufacturer segments its offerings on the basis of demographics,
psychographics & Behavioural factors.
BMW has highly skilled people working for them in all areas, from mechanics to customer helpline
staff. All are prompt and professional, and work hard to maintain the company’s image.
A typical customer of BMW is the one in the mid age (35-50), is excelling in his/her career, have
a taste of aspirational products & values his own social status. The benefits required by these
people are superiority, performance, reliability & quality.
BMW targets customers from upper class social group as they are the people for whom BMW will
be affordable & moreover they will appreciate the masterpiece. The global frontrunner, BMW has
positioned itself as a symbol of quality, technologically advanced, high performance & exclusive
automobile brand.
Continuous process improvement & technological advancement in its R&D is the core of the
competitive advantage of BMW. It is known for its quality, reliability & superior customer service
support. BMW has adopted policy of customer service=growth driver as an underlying principle
to grow its market.
Distribution Strategies. Exclusivity of the stores is definitely a factor to leverage on for BMW; the
company had & will continue to invest in the creation of flagship stores, so as to maximize the
consumer experience. At the same time company is also expanding the number of authorized
dealers. Currently operation 6000+ dealerships around the world.
Brand equity. BMW’s success lies in its strong sense of identity which is tied to the experience of
driving the machine.
4. The primary reasons for being a global brand
One of the key points which makes BMW a unique brand is its promotions. BMW has over
time established and reestablished itself to be a very smart marketer. Majority of the promotional
campaigns of BMW market the products based on their superior technological advantages, design,
and how it is meant to be for the premium people.
BMW not all tries to get technical elements right, but also trying to create an aesthetically excellent
and durable design, one that will still look fresh and sellable in 12 years. There are a staggering
variety of sizes, body styles and engines, all designed to prevent BMW owners from defecting to
rival luxury brands like Mercedes-Benz, Audi and Lexus. “We don’t ever want our customers to
grow bored,” said Ludwig Willisch, CEO of BMW of North America. Willisch said in the past
four years, customer loyalty —the rate at which owners choose the same brand for their next car—
has grown to 60% from 52%.
BMW has been successful “extending the brand through a massive proliferation of model lines,”
said Karl Brauer, a senior analyst for Kelley Blue Book. “They’ve mastered the art of spinning
multiple models off a single platform, which is what every automaker has to do these days to
remain competitive on costs and pricing.”

Disney
1. History of Walt Disney
Walt Disney Company was founded as a cartoon studio in 1923 by Walter Elias Disney.
Disney became a pioneer in the development of animation. Disney is one of the most famous
names in the animation industry, known for providing entertainment directed to adults and children
alike. With international theme parks, a world-class animation studio, business franchises, and one
of the biggest movie studios in the world, the company nearly dominates the industry.
The company began on October 16, 1923, as the Disney Brothers Cartoon Studio, a joint venture
of Walt Disney and his brother, Roy. Three years later the company had produced two movies and
purchased a studio in Hollywood, California. Pitfalls in distribution rights nearly sank Walt and
his company, but the creation of Mickey Mouse changed everything.
By 1932, the Disney Company won its first Academy Award for Best Cartoon for the "Silly
Symphony." 1934 marked the start of production on Disney's first full-length feature film, "Snow
White and the Seven Dwarfs," which was released in 1937 and became the highest grossing film
of its time. The advent of World War II halted the production of its films as the Walt Disney
company contributed its skills to the war effort by producing propaganda films for the U.S.
government to bolster support for the war.
Disney expands after 1950. After the war, it was difficult for the company to pick up where it had
left off, but 1950 proved a turning point with the production of its first live-action film, "Treasure
Island," and another animated film, "Cinderella."
2. Strengths and weakness
Strengths:
Brand name and brand image – Walt Disney is a known brand name that has been in existence for
more than 90 years and has continued to grow and expand internationally. It has an excellent image
in the media industry and a large subscriber base. The growth in its business can also be attributed
to its great brand image. This brand name is operational across 40 countries and makes and sells a
large range of products and services.
Leadership position in media and entertainment industry – The brand is a leading name in the
media and entertainment industry. It is among the top ten in the industry.
Financial performance – The brand is in a financially strong position and its financial performance
has continued to grow better over years as shown in the table above. In 2016, it made a whopping
$55 Billion. From 48 Billion in 2014, it has been enjoying a continuous rise.
Large range of market leading products and services – Disney has brought a large range of market
leading products and services. There are four categories of businesses that Disney operates in.
They are Media Networks, Parks and Resorts, Studio Entertainment, and Consumer Products &
Interactive Media. Its cable networks mainly consist of Disney, ESPN and freeform. ESPN’s
domestic channels include ESPN, ESPN2, ESPNU, ESPNEWS, SEC Network. Disney’s domestic
channels include DISNEY channel, Disney Junior and Disney XD. The International channels
from Disney include ESPN Channels, Disney channels, Disney Junior and Disney XD. Most of
these channels have more than 80 million subscribers. ESPN is a multimedia sports company and
Disney has an 80 percent stake in it and Hearst has 20%. There are 8, round the clock domestic
television sports networks operated ESPN. There are 100 Disney channels broadcast in 34
languages and 163 countries. Apart from them, Disney owns parks and resorts, cruise line and
adventure park – Walt Disney World Resort in Florida; the Disneyland Resort in California;
Aulani, a Disney Resort & Spa in Hawaii; the Disney Vacation Club; the Disney Cruise Line; and
Adventures by Disney.
Global presence and popularity – Another important strength of Disney is the global presence and
its popularity. While Disney broadcasts its channels in 163 countries, it also operates in 40
countries. Its brand, products and services are highly popular across the globe. Mostly, Disney
targets the kids and teenagers through its products and services However, its certain products and
services are also aimed at families like resorts, spas and cruise line.
Weaknesses:
Seasonality of businesses – Several of Disney’s businesses are affected by seasonality. Especially
the media networks and their advertising revenues are affected by the seasonality effect.
Advertising patterns keep changing with seasons and the viewership levels too. While the revenues
are generally high during the fall, they decline during the summer months. The attendance level in
the theme parks and the occupancy of the resorts can fluctuate and vary with seasons. It is because
of the seasonal nature of the travel and leisure business. It is during the summer months when the
number of visitors at the resorts is the highest. This is how seasonality affects the business of
Disney. Obviously, this is an important factor affecting its business and during the off season
Disney has to work harder on attracting and retaining visitors and customers.
Consumers’ movement towards internet leading to decline in subscriber levels across the industry
– Internet has affected major changes in this world and it has influenced consumers’ tastes and
preferences like nothing else. The consumers are gravitating towards internet based services and
options. This has led to fall in the subscriber level of several of Disney’s channels. However,
Disney has brought its services online to overcome the defect. Otherwise the defection of
subscribers towards the internet can led to larger fall in revenue. Disney is competing with the
internet based sources of entertainment and media and this is a major pressure that is affecting
Disney’s business and revenue.
Increased operational costs and expenses – Cost of services, products and operations have grown
at Disney and this creates financial pressure on the brand. The higher sports programming costs as
well as inflation and operations support cost growth, have led to higher costs and expenses. Apart
from it, there are restructuring and impairment costs. In 2016, the restructuring and impairment
charges that Disney incurred were equal to $156 millions.
Heavy dependence on US and Canada markets: Disney’s business is heavily dependent on the US
and Canada markets. More than 75% of the company’s revenue comes from these two markets.

3. Strategy Being Employed

Due to the higher wages in the United States when compared to developing countries,
Disney adopted the strategy of Foreign Outsourcing to reduce the cost of production. The main
factories are located in Asian countries, especially in China, and then have their products
distributed to all the stores.
As said before, Disney also opened Disney Stores around the world, as well as amusement parks
and resorts. This type of Strategy is called Direct Investment. This represents a high cost
investment for the company; however, their control over how their business operates is maximized.
4. Primary Reasons for Being a Global Brand
Disney's long-term strategy emphasizes creativity, innovative use of technology, and
global growth. The sharpness of its focus in these areas drives increased alignment and
commitment throughout the 91-year-old organization. But perhaps the real key to Disney's brand
strength is its use of technology and data to understand what customers want and personalize their
experiences. The addition of Jack Dorsey, Chairman of Twitter Inc. and CEO of Square Inc., to
the Walt Disney Co. board signifies the company's commitment to leveraging next generation
media and platforms to increase relevance.
To meet consumer demand for multi-platform access to content, Disney announced an exclusive
deal to create Marvel programming for Netflix by 2015 and acquired YouTube network Maker
Studios, the top online video network for millennials. It also debuted the groundbreaking, free
Disney Movies Anywhere app on iTunes, enabling seamless access to in-app purchases and
previous Disney content bought on iTunes. In late 2013, the brand's interactive division launched
Disney Infinity, a new platform for gamers that opens up opportunity to create stories and play
experiences starring Disney and Disney/Pixar characters, and Disney Animated, Apple's App of
the Year 2013. Disney is also embracing new technologies that are making vacation experiences
more personal, customizable, and connected than ever. Through MyMagic+, plans can now be
made online or via mobile and new RFID ticketing technology opens up access to the Disney
experience of one's design.
The box office success of Frozen revitalized the brand as a global blockbuster powerhouse. Along
with the U.K. and Japan, China and Russia are now among the largest markets for Disney's movies.
Disney's commitment to Corporate Citizenship has also strengthened its brand. Disney won the
Social Good category in the 2013 CSR Awards and placed joint first in Reputation Institute's list
of the World's Most Reputable Companies (as judged by consumers). By continuing to grow its
reputation for second-to-none family entertainment globally, increasing focus on next-generation
media and platforms, and taking its customer experience to the next level through technology and
personalization, Disney is ready to thrive in the Age of You.