Study the case study below and answer the following question in 300w

Which elements of the General Environment are significant to the future of the German luxury car industry?

STRATEGIC FO GERMAN PERFORMANCE/LUXURY CARS: IF YOU'VE SEEN ONE, HAVE YOU SEEN THEM ALL? GLOBALISATION Audi, BMW and Mercedes-Benz (Mercedes) have long each offers products in the large, mid-size and small parts of competed against each other in the performance/luxury the performance/luxury segment. IThink of the Audi $8 versus segment of the car industry. Given that they implement the BMW 7 series versus the S Mercedes series as products similar strategies in many of the same markets throughout through which these firms compete against each other in the world and emphasise similar dimensions to do so, these terms of large performance/luxury cars.) firms form a strategic group. This means that the rivalry The similarities among these firms as they compete are within this group is more intense than is the rivalry between extensive. For example, the Chinese and US markets are critical members of this group and companies offering products that to their success. With respect to China, an analyst noted that are intended to functionally serve and satisfy a mass-market BMW, Audi and Daimler's Mercedes-Benz units have benefited appeal among large customer groups. One could even argue as China's fast-growing wealthy population has flocked to high- that three substrategic groups exist for these firms in that end cars in recent years.' In response to this growth in demand for their products, all three firms are investing billions of dollars www.clearlybetterdiesel.org] that touted diesel's benefits of to expand production and their sales operations in China. superior fuel economy and a reduced environmental impact. For the Western markets, the firms are introducing new , To better serve the needs of younger consumers, all three models that are intended to significantly expand their sales. One companies are 're-thinking everything from dashboard way these competitors are doing this is to offer 'lower-priced entertainment systems to the relative importance of mileage models that would draw younger, less affluent US customers over horsepower to fundamental marketing strategies'. An away from mass-market brands such as Ford Motor Co., Honda initial outcome from these evaluation processes was a decision Motor Co. and Toyota Motor Corp'. A lower-cost version of the to include smartly presented, smartphone-driven multimedia A3 sedan was Audi's initial offering to reach this objective. BMW systems in models. developed a new version of its top-selling 3 series sedan (the 320) As is often the case with strategic groups, the rivalry and that had a base price way below the least expensive car in this strategic moves among Audi, BMW and Mercedes has remained series. Similarly, Mercedes offered the CLA, a four-cylinder car stable over the years. As such, we can anticipate that the rivalry with a very competitive price. BMW got into this game a decade among them will remain intense as they rely on similar strategic ago with its Mini, a car targeted at young drivers who they hoped dimensions to implement similar strategies. would get a Beemer [BMW] next time. Essentially, introducing these products was a strong attempt by the three firms to lower Sources: B. Laban, 2003, The Mini: Making of a Modern Icon, Singapore: Collins; C. Carroll, 2013, Audi plans to attract more U.S. buyers with diesels, Wall Street price as an entry barrier to their products among consumers in Journal, http://www.wsj.com, 8 February: V. Fuhrmans, 2013, Europe bets their 20s, 30s and early 40s. U.S. auto demand to stay high, Wall Street Journal, http://www.wsj.com, 16 These firms are emphasising similar dimensions or January: V. Fuhrmans, 2013, German auto makers to shake up luxury market, product features to produce new models as well as some Wall Street Journal, http://www.wsj.com. 14 January; V. Fuhrmans & F. Geiger, 2013, VW to bolster its output in China, Wall Street Journal, http://www.wsj- existing ones. For example, diesel engines are important to com, 14 March; F. Geiger, 2013, Daimler boosts investment in China, Wall Street the companies and their efforts to sell more cars in China, the Journal, http://www.wsj.com, 1 February; J. W. White, 2013, Beyond boomer USA and other countries as well. Because of this, the three of buyers: Car makers seek younger crop of customers, Wall Street Journal, them joined a few other companies to develop a website (http:// http /www.wsj.com, 16 January