Business concept Statement.
Concept.
The business is a luxury brand that deals with the manufacturing and Salesmanship of luxury cars to high-end clients or and upper economic class market.
Problem and solutions.
Reduce levels of carbon emissions and replace materials used in production by embracing better sustainable innovation in the luxury car industry.
Revenue model.
The business generates its revenue from two of its segments, i.e. the financial industry and the automotive market. The two streams in the revenue model are used to earn the company revenue.
Unique Value Proposition.
Wheels that speak volumes about you moves for you and is always about quality.
Innovation Analysis.
Lack of Pliability.
Pliability is the ability of the organisation to adapt its traditions and operations and aligning it with the new circumstance. Change is a constant one that also cannot be avoided in the business world. But when an organisation is faced with the need to change but faces inertia as a barrier when adopting new strategies using the business model, it means that there will be forces in the company that ensure very little or no innovations unless the company chooses to modify the company model and make it flexible to integrate changes. Therefore, lack of flexibility in an existing organisation’s structure, processes, routines and working models would only lag and make innovation difficult.
Culture.
Culture can be explained as the acquired facts that are applied in a particular specialised group of people to live in order and also cope with the environment they find themselves. (Guss, 2010). One variable related to the level of innovation in any field is the multicultural experiences. Multicultural experiences are vast, unpredictable and very informative and with different cultures in an organisation, creativity is greatly fostered. From the interactions, cultural differences and contrasting perspectives broaden the human understanding heightening levels of creativity. As a result, different innovations impact the business concept that is to be embraced by an organisation altogether.
More so, in the spirit of embracing innovation, the ways of an organisation are very fundamental innovation factors affect the adoption of any business concept. Arguably, the culture of the organisation should in all directions be able to take up and support innovations that are adopted by encouraging more changes and also take up the battle of adopting these innovations until fully utilised in the respective organisational departments.
Organisational structures.
Complicated and vast operational routines characterise large companies, unlike the opposite. Therefore, such companies often apply strong business models used to run the operations of the organisation and deliver on the demands from the market. Businesses are ever-changing due to the ever-evolving customer base. Thus innovations are used by companies to adapt to the changing market with the aim of continuity. It is observed that organisations that are too large face struggles while embracing innovations. For example, It seems that the characteristics that often define these large companies many times result in being a curse to the organisation, and these lead to finding other ways of earning money, unlike through innovation.
Leadership.
Leadership is a vital piece of the puzzle when embracing new technology and slowly profiting of, of the changed business concept. Tactical leaders are needed, particularly in taking responsibility for leading a change. For such leaders, they are equipped with the strategies, skills and meta-capabilities in the views of the organisation’s surroundings that spearhead in the adoption of different innovations. It wholly affects the operations of the organisation, different relations of the co-workers by promoting unity and teamwork and ability to re-organise by relocating resources to ensure effective transformation. Leadership is critical because good leadership can acknowledge the rigidity of the company and work through different struggles while adopting innovation.
Technology.
In the digital era, technology has become an essential factor when it comes to innovations in companies. However, embracing technology in business innovations can be viewed as both a driver as well as a barrier for organisations to innovate their different revenue models. Technology is increasingly offering opportunities to the companies, for example, by tapping into broader markets that were before then hard to reach. Consequently, companies take up these chances and capitalise as they gradually embrace the technology in their organisational structures. However, if a business model illuminates value in adopting technology in a company but the company’s operations present shortcomings; by being rigid and only built for older technologies its close to impossible to have innovations for business concepts.
Competition.
Data analysis and evaluation provide information that can educate the company on different sectors of the industry, including competition. It is through Innovations that organisations can address competition, justifications and opportunities in the industry.
Market Analysis.
Industry Description and Analysis.
Luxury cars are manufactured passenger vehicles which an exception of high levels of quality and enhanced comfort. These cars are available in a range of vehicle categories, including sports vehicles and minivans. During the old age, luxury cars were identified by their size. They have initially been more significant than others, although in some cases smaller sport vehicles were always produced. Unlike today luxury cars are defined by their speed and engine performance.
As the term suggests, these cars are based on the quality of the vehicle and the reputation of the manufacturer’s brand image. Some manufacturers of the luxury cars, assemble these models by using the marquee as the rest of the line. Others have designed an independent marquee or buy one. Periodically, a luxury car is initially vented under a mainstream marquee and is later rebranded under a specific luxury marque. For mass-produced luxury cars, sharing platforms or components with other models is common as per modern automotive industry practice.
Luxury cars are known to have very distinct features those that place these cars in their different category of vehicles. One is the traditional emphasis on ride quality and high levels of safety and comfort. Such cars are always manufactured to make its user have an enhanced experience in all levels. The other feature, all luxury cars are conspicuous. It is often difficult not to notice a Bentley when it rides or is parked at a particular location. Thus luxury cars are used as a status symbol one that demands respect from all corners. Lastly, all high-end cars have tuned suspension systems that prioritise enhanced riding quality over handling.
As of 2018, this market was valued at $495.7 billion while projecting a steady cumulative Annual Growth of 5.2 per cent from its sales, which totals to an expected high of $ 733.2 billion by 2026. The luxury car market is one of the most valued markets in the luxury goods industry. With this, the market size of this industry has steadily grown from 245 billion euros to 550 billion euros by 2019.
As per the standard fee prices of luxury cars, the retail price is categorised into three segments which are entry-level, mid-range and premium (luxury elite). The average cost for the entry-level luxury cars starts at $28,790 while that of the luxury elite begins at $121,750.Over the years, the luxury car market is untouched by depressions, or any financial crisis ailing a country but instead posted a steady growth driven by the emerging markets. So unlike the mass car manufacturers who report high losses, the high-end manufactures proceed to celebrate a steady increase in sales.
Generally, the future of the global luxury car industry is bright, and this is from the growing importunity from countries such as China and India, the recovering demand in Europe and the maintained outlook in the United States.
Different PESTEL factors affect the luxury car industry, and the significant factors are political factors and economic factors.
The global heat generated by the trade war between China and Unites states have affected many industries globally. From market analysis, china reports a very bright future in the car sector because of growing interest from consumers. This future is projected at a 3%-5% market growth by 2020 due to the increase in incomes per households. However, these trade wars have greatly affected the Salesmanship of cars. They are consequently affecting the prices and foreign exchange movements. For example, BMW being the second-largest player in the luxury car industry, only clocked a total of 28,330 sales in 2018 this cumulatively effects on their earnings for the year.
Macro-economic factors and reducing oil prices are also factors that are significantly affecting the market for luxury cars in the Middle East. The U.A.E. id the second-largest automotive market worldwide; however, this market is heavily dependent on imports as it is dependent on external oil market to dictate the economy’s well-being. Hence with an ailing economy, the government prioritises on what to import.
Market Description and analysis.
In Canada, 60 per cent of the sales made have been made by the luxury cars and the trucks market, likewise in the American market reports indicate a slow but steady sales in the luxury industry partly blamed by the change in leadership. The industry is slowly growing even more robust and concentrated in British Columbia and Ontario, which are one of the fastest-growing provincial economies in Canada. For instance, sales in Ontario, Canada have surged up to an all high of 15 %.
Globally, the market is slowly expanding through the emerging markets that have accelerated by an average of 6% annually, such as Asia and Eastern Europe. It is attributed to the strong ties, particularly in Eastern Europe which has fostered more durable relationships with the European Union and highly integrated (economically) with countries like Germany.
Different factors play a significant role in determining the future of the luxury car sector. These factors vary depending on the topography, innovation, customer demands and even political changes. There are different types of factors that affect the Salesmanship of these luxury goods, and they are;
The rise in demand for luxury vehicles.
Rich people always have a societal obligation to different status symbols, and having an excellent luxurious car is one of those symbols. In addition to this, various countries, such as China have shown remarkable growth and high levels of consumer confidence when it comes to luxury cars. For instance, in India during the year 2017, the car sector recorded a total of 20,000 in the first half of its financial year totalling to 39,000 units sold by the end of the fiscal year. From the statistics, this amounted to a 17% increase in demand from the year 2016. Further, this indicates a substantially faster growth of this category of vehicles than passenger vehicles. Therefore, growth in Salesmanship of the luxury car is much anticipated resulting in even much-recognised market growth.
Growth in demand for enhanced driving experiences.
All luxury vehicles are manufactured using the best technology, quality materials and powerful engines all which maintain and give quality riding experiences. More so, these luxury cars offer the best of technologies such as remote intelligence entry an adaptive cruise control that makes interactions with the vehicle much more manageable. Further, features such as executive customised rear seats and massaging seats are all provided in these cars. Therefore, such factors attract the demographic looking for comfort and quality in their vehicles.
However, other trend factors are expected to hinder the growth of the luxury car industry,
Manufacturing and Salesmanship of electric luxury cars.
The number of sales recorded shows remarkable healthy growth, owing to the different environmental demands for promoting eco-friendly cars. The need for a more sustainable world has led to a spike in sales of electric vehicles from leading producers such as Tesla. To align themselves with the sustainable choices in different sectors, the luxury car companies are now slowly introducing luxurious and high-end performance cars that continuously sell quality. At the same time, keep up with the changes in the sector. For instance, In 2019, sizeable high-end performance brands such as Mercedes introduced luxurious electric cars to meet the emission standards. This need to meet different environment-friendly stringent while producing such cars can present both a blessing and a curse.
The high cost of luxury cars.
As we know any luxury car from Bentley, to Porsche is significantly expensive compare to standard, traditional brands. Arguably, this is to balance-out with the quality, luxurious features and improved riding experience. More so, production costs are higher than those when manufacturing the average cars with generic functions. For example, Bentley’s steering wheel is hand-stitched and in most cases, customised to meet the owners need; therefore, this requires a higher cost than the regular steering wheel placed in the traditional cars. This high cost automatically sets luxury cars to be just a dream for the broader population as a result hindering the growth of this sector.
Competition Description and analysis.
The global luxury car industry market can be categorised based on the engine capacity, level of comfort, and security offered vehicle type and fuel type. In 2018 statistics show that the sedan was the most popular car type with a continuous increase in demand compared to other luxury cars.
Perceptual Maps.
Luxury cars often are produced available in different shapes and forms, and every consumer in the market comes with unique specifications that fall under different evaluation criteria. The following is an example of some of the evaluation criteria used when purchasing luxury cars.
- Cost of the vehicle.
- Features of the car.
- Luxury car rating.
- Type of Luxury car.
- New or Used car.
- Type of fuel used.
The following are the perceptual maps that can help evaluate the different cars produced.
High cost
Low-rating High-rating
Low-cost
Good features
low-cost High-cost
Out-dated features
High rating
Type of car. Type of car.
low-ratings
Type of fuel used
Low cost. High-Cost
Type of fuel used
New car
Old features. New Features
Used cars
Zoom Tools.
Part one: Ideal Customer/Customer Zoom Tool.
The primary customer that this market provides for is the high-end ultra-rich client who has different aims and objectives while buying the car or simply just wants to own quality. Interestingly, the current trend in the population is nowadays striving towards comfort and quality features that can enhance the riding experience.
Luxury car consumer is identified by different values he/ she might possess; one of them is the need to have a car that acts as a status symbol in their life. For example, a company that sends a representative to visit a clients office is often driven around in a luxurious car. It is because of the prevailing narrative surrounding luxury cares and what it takes to own them.
The customer also has a perceived undescribable value in a luxury car. Many clients are willing to shell bucks to pay and own a luxurious car, one they feel is an equivalent to the quality and riding experience that is much preferred.
Part one: Customer Problems/Problem Zoom Tool.
With the increasing reason, understanding and want for power and speed, more customers are leaning into owning luxury cars. However, the persistent problem these customers face while buying the cars is the high-cost that comes with owning a vehicle that is speed, high-performance and quality-oriented.
Part one: Minimal Viable Product or Service (M.V.P.)/Solution Zoom Tool.
The minimal viable product for this startup is
- It will be launched in just one city, and that is the headquarters.
- From the already designed website, customers can select the offered luxury cars by our business, but this will kick off after the launch.
- The website is based on a simple, stylish layout focused on educating, selling and acquiring feedback from the clientele.
- The launch will take place in one of the various festivals held in the city.
Part one: Unique Value Proposition.
I believe that the unique value proposition is one that simply elaborates the value of luxury cars. Makes the client understand that luxury cars not only have quality features but also meet the customer need by being socially responsible, customising the cars and availing to all markets.
Part five: Channels.
Empathy Interview Questions.
Financial Strategy.
One year sales forecast
.
Summary. and Conclusion
Sustainable methods are being adopted in the automotive industry; this comes at a time when there is a need for change to reduce climate change effects in the world that we live. For luxury cars, the meaning behind quality is slowly evolving because of the issues such as carbon-dioxide emissions. More so this has proven to be an advantage because of the adaptability nature in automotive allows the use of cheaper products while capturing a broader market. Traditional luxury cars are now moving to sustainable innovations because of the trends and influence on climate change.
My business venture is one that will adopt sustainable innovations that offer off-road capabilities while combining the quality of luxury cars with ecology. Many unique selling points can be taken advantage of such as naturally tanned leather and most recently electric luxury cars. So although this trends and eco-friendly choices might much favour the big dogs of the luxury car industry, it is inevitable to enjoy the benefits of being a producer of luxury cars with outstanding features such as luxurious electric cars.