BMW business model crunches gears as models expand, profit falls Essay

This term discusses the recent changes in sales, stipend, and avails of BMW, the German ground even outr of luxury automobiles. The article opens by proposing five market scenarios that whitethorn affect the way BMW conducts business and earns revenue. The scenarios include changes in laws, consumer desires, auto financing availability, political climate, and consumer buying habits. Recently, earnings have declined by 63 per centum and further losses are anticipated.Company executives and diligence analysts note that earnings on certain models has declined while sales have increased everywhere a 10 year period. The change is attributed to a abjecter ingest for the high end performance cars that have been BMWs core product. In response BMW has sold more smaller less expensive cars as a way to respond to changing market demands. This article demonstrates some(prenominal) factors that affect a companys profitability competition in the market, consumer demand and habits, and the company business model.In the case of BMW these changes were prompted by polity regarding gas prices and surroundal concerns which changed consumers driving and car buying habits. BMW responded to this change by switching to a different line of cars including SUVs and compact cars. They sold more units at lower prices compromising the overall profitability of the company preferably of conforming their high performance base model to be furnish efficient. Intels shock warning sounds alarm for tech sector This article discusses the issues that led Intel to cut its revenue and profit forecasts for upcoming periods.Intel has reduced profit forecasts and their stock prices have declined by seven percent. Other technology companies including Microsoft, which uses Intel microchips, and competitors much(prenominal) as National Semiconductor Corp have also bring down their profit forecasts. These reports have spread fear across the industry that consumer expenditure will continue to decline. Intel also cited the credit crisis as an issue change demand for products and the ability of suppliers to provide services that Intel needs in its manufacturing process. fabrication analysts note that Intels slow performance is normally indicative of earliest spring results, but do not speculate on how the received outlook may affect the coming spring results. This article demonstrates how hotshot factor can have an adverse and possibly unnecessary ban affect on profitability conjecture. As mentioned in the article speculation alone caused stock prices to tumble. Investors move into that profits will be low and will either divest or not further deck affecting the companys ability to finance production operations.Suppliers assume the worst and make it difficult for the company to obtain materials they need to manufacture and get chips to the market. End users like Hewlett Packard and Microsoft may purchase chips from competitors on the supposal that Intel will not b e able to deliver. In other words, a grim forecast can become a self fulfilling prophecy. The exit in the two articles is that the BMW article demonstrates a verifiable and valid educate of issues that can and do affect the profitability of the company and the automobile industry as a whole.The Intel article demonstrates how speculation can affect consumer arrogance in a way that can reduce profitability. BMW has analyzed the real number issues that have reduced their profitability and are in a attitude to change their business model to respond to the situations identified in the article. Intel, on the other hand, has subjected itself to speculation and must wait to see how the market environment plays out. They can change their forecast but that is not a square(a) guarantee that consumers will respond positively to the change.