How the United States of America will respond to German Cars
How the United States of America will respond to German Cars
German cars are famous worldwide for their luxury, durability, innovation, exoticism and sophistication in terms of design and production. Whatever they make is perceived of high value in terms of money and exhibits high cultural values of the Germans. Over the decades the German philosophy of management is structured in such a way that it bring out an element of extremely reliable quality and focuses on the aspects of giving something new to the world. Their cars are known to the world and most preferred by their target market because of the reputations that have been able to maintain over the decades.
The German apply the concept of high level engineering in the manufacturing of the product add extreme level quality management is applied. In order to explain the German concept let us take the example of Mercedes, a German car manufacturer. The brain child of Karl Benz, this company has grown up to the limits of providing high value cars to the market it caters. Mercedes is a brand that has attached its values with luxury and comfort which encompasses extreme engineering that focuses on precision engineering. The target market of Mercedes is the highest socioeconomic group given in any country in terms of income.
The target market includes people who have a sophisticated life style and prefer luxury of any of the factor. Mercedes goes by the philosophy of providing more for much more. Obviously high and reliable product offerings are then associated with higher cost which the customers of Mercedes are ready to pay. Mercedes has always been known to come up with innovation in its products which are always shown in the new model which Mercedes launches. The values that are attached to the brand are always taken care of by the manufacturer and as a result, reflected on the end product.
Mercedes philosophy is based on providing the best of what is required. Its product has now become a prestige for its owners who stand out from the rest of the population. Mercedes has a reputation of maintaining customer retentions and high customer satisfaction. This is done in terms through the medium of providing high quality cars and much better customer service that comes in the form of car maintenance and part a service supply. The customers enjoy the convenience of getting better maintenance because they become a part of the Mercedes family.
The reputation has become a part of the brand that lives up to its value. The German car manufacturer on which we will be focusing has a product that caters to the higher class of customer as they would be differentiated on the basis of their income. Our customer is a person of age around 25-35 years, a person who is lively, energetic and more fun loving. He prefers luxury and comfort over economy of the product and would mind spend money that gives him satisfaction. If we classify our target market’s need on the Maslow’s chart of hierarchy of needs, we would place it on the end that is self-actualization.
The personality of our customer is a healthy and active individual, who is also very classy and has a good taste of products. He prefers to go to clubs rather than normal bars and would celebrate his success with wine rather than a glass of champagne. Our customer is a winner and would never settle for something low. If we were to diagnose of how reactant our consumer is then we would rate it as an early adopter who is highly informative about the newly arriving product and is a connoisseur for fine products. Our aim is to target the higher class of people and also the younger segment because of the sustenance of our business.
To make thing more specific, our cars that are luxurious and we are not willing to expand our product line. The whole concept to cater to this segment of the target market is because of the rich tradition and culture attached to German products. German philosophy in the car manufacturing industry is to provide something innovative and high-tech. So this target market is chosen to order to align with what are philosophy is. And the whole objective to expand our domain to other countries is solely based on the feasibility of the plan which includes profits and sustainable development of the expansion.
These things will be emphasized upon when giving analysis of the expansion plan of the company in the following countries. Plus we will also look in to business and operations process reengineering which will be needed in different countries in order to align with the consumers of the country and their traditions also. United States of America: USA is a country that has a blend of people living in it. They include Caucasians, Latin Americans, Mexicans, Afro-Americans, Asian and many more.
The majority of the population that lives in the U. S is Caucasian or white Americans . However this majority is in terms of the relative ratio to the different races. The American culture includes a variety of aspects in it and is a very complex system in itself to analyze it. If we analyze the country as a whole then we will have to analyze the geographical, economical cultural, demographical, and social concepts of people living there. The geographical design of U. S is divided in to two categories which further have been divided for other studies. These categories are defined as cities and country side.
An important thing to note is that the lifestyle of people who live in the two different categories is extremely different to each other. The city life is perceived as fast paced and more inclined towards professional environment. The residential areas are either near the business hubs which are expensive and are in the form of apartment and penthouses or separated from the city center and are located in the outskirts of the city. These places are residential areas that have houses, bungalows, schools, supermarkets etc. The standard of living in the United States is high which is also reflected in the lives in people living in cities.
However people who live in the out skirts are usually those who have their own family and own a house in those places. The people who live near the city center usually reside in apartment and are singles. The people who live in the outskirt residential areas have their own cars for traveling, while those who live near the business hub are the ones who not use cars to travel to office and use public transport like buses, subways and taxis also. So the business should emphasize on catering to the segment that lives in the residential area.
People can afford the car because of higher income status and because of the lifestyle that aligns with the product’s positioning. More over its customers live in expensive areas that prefer big luxurious cars. Right now the personal transportation mode of the American is automobiles. It is estimated to be 80% of the land transport. This mean that out of 100 American, 80 of them have their own car; which in the European countries is approximately 51%. This is an added benefit for the automobile manufacturers.
The market which will be focused upon are mostly cities like New York (population of 20,000,000 approximately), Washington D. C. 6,000,000 approximately), Los Angeles (12,500,000 approximately), Chicago (9,600,000 approximately), Miami (5,500,000 approximately) and other cities. The political system of the country is based on the democratic system of government. Everyone has certain rights that are stated in the charter of democracy. Everyone one has a right to vote in the elections which determine who will lead the country for the next four years. The country has had an advantage of having wise president and a clever and socially binding congress which has the responsibility of passing laws for the better of the people as well as to contribute to the world.
U. S. A has been lucky to not to face political turmoil and the law and order situation in the country is very good. The crime rates even though high do not majorly affect the economic functioning and are able to withstand any sudden disruption. After the terrorist attack on the World Trade Center the government has increased its budget on social security in order to prevent any further assault on the US soil and has been able to achieve its objective of maintaining peace in the country. This is also proven by the fact that the country has until now not encountered another attack since the last nine years.
The government gives very much importance to the social expenditure which is aimed at improving the socioeconomic aspect (education, medical etc). This in turn increases the standard of living if the people who further help in maintaining a sustainable economy by creating opportunities for new entrant in the market. U. S. A has high investment opportunity. It is because the economy is capitalist economy which means that it is based on the free market trade and that there is no government intervention. Due to this, there is high investment on other businesses and the high growth opportunities.
The tax rate in the U. S is high, which is a symbol for a developed economy. The taxes given by the people to the government further help the government to contribute to the social expenditure it incurs. The tax rate, even though; are cost are outweighed by the profitability of the companies operating in the U. S. USA is a huge market for potential businesses to enter. This can be seen from the fact that it has a GDP of $14. 4 trillion. This shows that how big an economy US is. The private sector contribution to the economy is 55. 3%, which is a majority and it shows the strength of the private sector.
This means that U. S has high private investment firms who are also high tax payers. The United States of America also has the privilege of having the world’s largest stock exchange in terms of volume which is the New York Stock Exchange (NYSE). More over as it is a country that has diverse group of people living in it; the chances of success are very high. Secondly the country has started to come out of recession which hit back in 2008. This means that the dark period for the US economy will in very short time become a thing of the past and the only thing which is anticipated now is the economic growth of the country.
Another thing which will add to the benefit of the transfer is that the interest rates in the US are all time low. Which means that cheap financing is available to people and due to this there will be an increase in consumerism which will further add up to the advantage of sales in the automobile manufacturing. Moreover the competition in the automobile industry is low in the US because of the bankruptcy of the automobile company due to the recession. These companies have either packed up or either been bought by Chinese or Japanese companies.
Now the competition remains with only the Chinese or the Japanese manufacturers. German cars comparatively have more edge to other manufacturers because of the higher quality and a very good reputation. Then to add further USA ranks third in the oil production industry. It is also the largest importer of oil. This means that there is no problem of availability of fuel for those who can afford it. The culture of a country is defined by the people living in it. It is the representation of the behavior and practices of the people in their daily lives.
Everything what people feel, think and learn is a part of learning that comes from culture. The culture of U. S is a blend of people living in it. As described above there are many races in the United States. And since it is known that culture is adaptive and changes according to time, the mixture of their cultural values has evolved to form what is called the American way of life. U. S is also a house for people who belong to different religion and practices. The majority of the population living in U. S belongs to Christianity.
There are also Muslims, Jew, Buddhists, Hindus and people of other religions living in America. What is unique about the people is that even though they consider themselves as American, they do not necessarily share a common set of ideas and beliefs. This is because even though they live in America that adds up to their social learning that comes through interacting with other people, their parenting and inherited learning is different from one another. This means that people belonging to different groups may have different behavior in different situations.
This adds to the out benefit since the values related to luxury and satisfaction is espoused value that all the people of different races tend to share. Humans have always had the tendency to develop. People strive to in order to increase their standard of living. This means that with the growth of economy and socio-political environment people develop the tendency to get to the next level of their needs which are then changed into their wants and they demand for thing that gives them satisfaction.
The change in the wants of people is reflected by their demand for a particular thing. So it won’t be wrong to say that growth in the economy is directly proportional to the demand of products which is an added benefit to the businesses. During the nineteenth century, the American philosophy was of working hard to become well off evolved into the increase in the social status. This is was the belief that was prevalent among the whites. This philosophy has now shifted to the Asians.
University/College: University of Arkansas System
Type of paper: Thesis/Dissertation Chapter
Date: 25 September 2016
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