According to recent news reports, BMW is going to be the next big automotive brand to introduce an electric car. The BMW electric vehicle will be known as the ActiveE, it will have 170 horsepower, go 100 miles per charge, and will be 100% electric, using no petroleum.

This is a big step for BMW, which is known for its high-performance sports cars and its one-of-a-kind driving experience. BMW has always marketed itself as a luxury brand for people who love to drive – they’ve left the eco-friendly vehicle design to Honda and Toyota.

It’s always admirable for car companies to introduce more energy-efficient vehicles. But this move by BMW is a big risk. The BMW brand has always been based on a certain rugged panache – BMW drivers are people who have arrived at a certain stage of life and career success; they are used to being in charge, they don’t apologize for driving a fine vehicle.

BMW’s longtime slogan is “The Ultimate Driving Machine.” They sell their cars based on precision German engineering, exceptional handling, and the feel of being a spy movie stunt driver even while pulling out of the driveway in a gated community cul-de-sac. How does an electric car fit into these brand values?

Is an electric car really going to be relevant to BMW’s core customers? Or will BMW’s electric vehicle create confusion in the marketplace and undermine BMW’s brand?

One of the most common mistakes that companies make is to lose sight of offering products that are relevant to their customers. Even the most successful companies can drift away from their core competencies and chief competitive advantages in search of elusive new growth in exciting new markets. Too often, big strategic decisions get made without enough market research – or without getting input from the company’s most important customer constituencies.

The challenge for BMW is that introducing a new line of cars can be a particularly costly endeavor. More so than in many other industries, making cars requires huge fixed expenses and long-term commitments. It’s hard to quickly change directions if sales don’t materialize as expected, and mistakes can set a company back for years.

For these reasons, I hope that BMW conducted extensive market research and customer research to find out if their customers really want a new electric car from BMW; and if so, what does that segment look for specifically in a BMW produced electric model.

It’s possible that Toyota’s Prius hybrid and Chevrolet’s much-publicized electric Volt have awakened a growing awareness and demand for electric vehicles among all kinds of car buyers. If so, BMW will likely be able to successfully sell its new electric car without undermining the other competitive advantages associated with its brand. The risk for BMW is that electric cars are already too much of a niche product – associated only with Toyota’s Prius, for example – so that people who want to buy an electric car are not drawn to BMW’s offering. BMW is about to find out whether enough BMW fans want to buy an electric car – or if enough electric car enthusiasts want to buy a BMW.

 

Ask yourself if your company risks being irrelevant and if you can find out before making big investments.  Many organizations will “damn the torpedoes” only to waste the resource.

 

 

Relevance and Competitive Advantages:   www.SmartAdvantage.com        954 763 5757

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