Zimmer Motor Company Global Strategy

Introduction

Improvement in technologies and communication systems has brought people and the nations closer than before. Companies must exploit this situation by positioning their competitive products in the global markets in order to receive maximum returns on their investment. The following essay is a strategic plan of the Zimmer Motor Company an Automobile company based in the United States of America. The essay will focus on its product, the Zimmer Golden Car. The essay contains a situational analysis of the company, in terms of its strengths as well as weaknesses, the threats and the opportunities existing in the potential of the company. The essay also examines the missions and the goals of the company. There is product’s global competitive advantage in a market saturated with luxury and classic cars. The strategic plan will delve into the means through which the company can position it in the global market place and edge out competitors from the market. The final part of the strategic plan will include details of executing the plan as well as how the company will handle the increased demand. The plan will also have contingency plan or fall back plans in case there are factors hindering its immediate execution.

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The mission of the company

Zimmer founded the Zimmer Motor Company in early 1970 and in 1980 had annual sales of twenty five million dollars but later collapsed after the death of the founder. Art Zimmer who founded Zimmer Motors Club that brought together owners of Zimmer revived the company again in the late 1990’s. The members raised money and brought the company into operation. The company main aim was to promote ownership of Zimmer in the United States as well as give the owners of the classic car a chance to use them again as some had broken down and lacked spare parts (Hendrick, 2011).

The company provided the spare parts and vehicle detailing services to owners of Zimmer automobiles all over the United States. Due to the grandeur and the classic design of the vehicle, the company started receiving orders from new customers who wanted the vehicle (Hendrick, 2011). However, the challenge of availability of the spares and servicing persisted. To handle this problem the engineers of the company came up with the Zimmer Golden Spirit, a modern state of the art vehicle which had Zimmer exteriors and Ford interiors such that the owners of the vehicle could receive service and warranty from the Ford Company. This has led to the skyrocketing of the sales of the company in the recent years. The high speed of the car has made it an attractive classic model car (Hendrick, 2011).

The situational analysis of the product

The following is the situational analysis of the product in the global market. The global macroeconomics indicates a slight recovery from recession, a period in which most of the companies have been experiencing collapse and financial hardships. Most people who could not afford luxury reduce their spending budgets due to decrease in their disposable income. Zimmer cars are considered as luxury by most people that is why the company slogan connotes that the product is for those who have arrived although the actual meaning may be to indicate that you will be noticed when you arrive due to the design and the appearance of the vehicle. The global macroeconomics indicates that disposable income has decreased.

However, there are emerging markets where luxury cars have still gained popularity even in depressing times especially in the Middle East in the Arabic countries such as United Arab Emirates. Sales results for Porsche a luxury carmaker based in Germany had a sixty percent increase in the sales volume for their luxury cars in the United Arab Emirates. The same increased sales are replicated in Saudi Arabia and Yemen. These markets indicate opportunity for the company to explore. Nevertheless, before the company goes global it is imperative for the company to conduct an internal SWOT analysis to determine whether it has the resources as well as capability to compete globally.

Strengths of the company

The company is strong in the following aspects. The first advantage that the company has is that it is offering a classic product, a high quality product for the people who have a taste of art and people who want recognition. The product design is attractive making it an elegant vehicle. The Zimmer Golden Spirit is a car that combines elegance and efficiency. On the outside, it has covers of Zimmer parts and on the inside the Lincoln parts. This makes the car efficient in terms of speed. The vehicle has air conditioning gadgets installed making it fit to use in any weather condition (Hendrick, 2011).

The other strength of the company is that it has an excellent management, which is inclined to raise the resources and the necessary funding to make the company ventures a success. The Zimmer club members who are part of the shareholders of the company are wealthy individuals and they can raise the necessary capital to take the company global (Hendrick, 2011).

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The company sales team since the launch of the Zimmer Golden Spirit car has experienced increased sales in the United States of America showing that the product has high receptivity. The success of the sales team in America shows that the market has appreciated the product. The increased sales provide the company with the capital and the resources for maintaining its operations in the United States. It also gives the company an opportunity to develop other products (Hendrick, 2011).

The company’s dealership with Ford Motors to provide servicing facilities to its customers make it easy for the customers to have the much awaited after sales services. This will assist the company to foster customer loyalty (Hendrick, 2011).

The company has introduced a three-year warranty program for the new car owners such that the car manufacturer gets an opportunity to repair the new vehicles if they have a problem for the three years. This boosts customer loyalty as well as customer satisfaction. This strength has helped to position the company as one of the best classic car manufacturers (Hendrick, 2011).

Weaknesses

The first weakness concerning the product is that it is a high-end product and may not appeal to mass buyers. The classic design of the car may not appeal to the younger generation making it hard for the company to position itself among the young people who have disposable income. Not all people will prefer car designs of the 1920’s (Kotler, 1986).

The company does not have a history of success as it has closed down in the early 1990’s until its revival. This is a weakness in that many people may not want to invest in the company denying it the much-needed reputation to ensure its success globally. The history of the company also indicates that even though it has a good product the brand of the company is not equally excellent, as the company appear new to most people (Kotler, 1986). The company has a weak financial base relying on the sales revenues to fund its operations, as it is yet to go public. This may have negative effect on the company operations if funds generated from the sales go to other ventures (Bradford, 2000).

Opportunities

Markets in the Middle East provide a niche for the company where it can sell the products. Buyers in Middle East who look for luxury generated from the oil dollars want to stand out and Zimmer is the car that will make them noticeable and different from the rest. The fact that companies like General Motors have limited resources mean that they cannot engage in the production of such elegant car because of noise. This positions the company for success (Naisbitt, 2008).

Many people want to own antique cars but the cost of the classic cars make it hard for majority of the people to own such automobiles. The clamor for standing out and prestige is an opportunity that the company needs to exploit for proper positioning in the market (Hendrick, 2011). The company has not exploited the vast local market in the United States of America where it has to position itself successfully for it to succeed in other markets. The local market is imperative as the cost of distribution and delivery is minimal, and it provides the company with a chance for maximum profit (Hendrick, 2011).

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Many governments in the emerging economies are looking for foreign investors to invest in their countries and provide tax waivers on the capital invested in their country. This provides an opportunity for the company to position itself in the emerging markets (Naisbitt, 2008). The company has opportunity in the globe, as there are countries who are members of Zimmer club. There are countries where Zimmer Motor Corporation had sold cars previously. In Jordan, its Zimmer models are present and appreciated as antique cars. The presence of owners of the model in those countries is a great opportunity for the company to market its products (Hendrick, 2011).

Threats

The first thereat experienced by the company is that of competition from luxury car positioned in the global market. These companies may produce similar classic designs thus competing with the company for its customers such as the Lamborghini and the Porsche. Global environment is important to the company if it is going to enter the global market. The global economy has experienced recession from the year 2007 and due to this factor; many people have cut on their consumption especially on products considered as luxury. This may have a negative effect on the Zimmer product, as it would require intense marketing and a lot of market research to identify niche in the market where the company may have target customers.

The other threat is the economic environment when banks have sunk and most of them received bailout from the government to prevent them from collapse. This affects the company’s prospect of receiving loans and other financial assistance from American financial markets to enable it to increase production capacity to meet the global demand of its product. This threatens the chances of the company going global, as it will affect its financial stability without extra money from the financial institutions or from the shareholders.

The organizations competitive advantage

The Zimmer Golden car is competitively positioned as an antique car of the 1920’s, the elegance, and the good design make the company to be positioned for success. The elegant vehicle has an advantage as it ensures that the product is competitive in the market (Hendrick, 2011).

Most of the antique cars are old and malfunctioning where getting the spare parts for the products proves hectic. However, making of the new model is in such a way that spare parts from other models can fit in the system. The air conditioner installed in the car makes it good for use in any weather condition (Hendrick, 2011).

The intense design and the engineering capability required in the process of manufacturing the car make it a high-end product which most of the companies in the automobile industry cannot afford to invest in. The fact that the company buys the older model of the car and uses the parts to redesign the new vehicles is an added advantage for the company as it this significantly lowers the cost of production.

Due to the low cost of producing the antique product as the company uses the previous disposed model to manufacture the classic car, it lowers the price of the car. Most of the classic and luxury cars usually cost million of dollars but the Zimmer Golden Spirit car will cost less compared to other companies (Hendrick, 2011). Reduced price of the car will position it in terms of quality due to similar features like those of Limousine and Lincoln car. The interior design of the car is of quality to make it comfortable and efficient for the users. The car has safety features such as alarm systems and remote start capabilities (Hendrick, 2011).

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Preferred method of entering into the global market

Globalization has become the norm as the integrated communication technologies have made the distance smaller thus making it easy to trade globally. The Zimmer Motor Corporation must also strategize on how to sell its Zimmer Golden Spirit car in the global market. Entering the global markets require good advanced plans on how to position the product in the global market place. There are methods that the company may use to enter other countries. This may be through subsidiaries, joint ventures, or partnership (Bradford, 2000).

Joint venture is the method that the company will use to enter other markets where it will own joint ventures with companies, which have showrooms. The company will meet the cost of manufacture and delivery whereas other partner will meet the cost of marketing in those countries. Considering that the company may not receive funding from banks or from the government, it would be risky for the company to have a subsidiary in other countries without first testing the success of the products through joint ventures. Joint ventures will suit the company, as the other partner will meet other obligations (Bradford, 2000).

Execution of the strategic plan

Having analyzed the company strategically and looking for better ways of living and ensuring that the company is positioned for success all over the globe it is necessary to have a plan on how to execute and make it possible for the company to sell the car. The first aspect of executing the project is assessing the current financial status of the company. The financial assessment is in terms of its assets, liabilities, and its sales strategic plan. Without a good assessment of the financial position of the company to ascertain whether the company has funds to finance the joint ventures it will be a financial suicide for Zimmer Motor Corporation (Haines, 2004).

After assessing the financial position of the company, it will be easy to determine the ways in which the company will raise funds to invest in the global market. This is important because it enables the company to formulate ways of raising capital to fund the global joint ventures. However, in the case of the Zimmer Company the only cost it will meet is that of manufacture and transporting the vehicle to the new market. The partners in those countries will meet other costs such as rent for the assets and government licenses (Haines, 2004).

The other important aspect in the execution of the company strategic plan is communicating to all shareholders of the company to ensure that they are aware of the plan and its advantages. This is imperative especially if there is need to raise additional funds for the project. The shareholders support will be crucial to ensure that they provide any additional fund needed to make the product successful (Kotler, 1986).

The company must develop an integrated marketing communication strategy where it harnesses resources to brand the company as well as sponsor events that will create awareness of the product in the local and global market. This is because as earlier shown the brand of the company is weak and if the company will be successful, it is necessary to formulate marketing and communication plans to increase the sales volume (Kotler, 1986).

The company needs to conduct market research on the availability of products, as this will enable it position itself in the global market. The market research is imperative in countries where the company has branches to help invest its resources in companies where there is a ready target market for the car (Kotler, 1986).

The contingency plan

The fall back plan is plan to ensure availability of other options other than the discussed option if the threats persist and the company weaknesses hamper its effort to take the product to the global market. The fall back involves concentrating with the American market until there are enough funds to take the company global. The fall back plan will use the ten percent of the earned revenues to launch an intensive marketing campaign to create awareness about the product (Haines, 2004). The other strategy will involve collaborating with already established companies in the foreign countries and position those companies as authorized distributors of the Zimmer car. This will save the companies revenues and ensure success in the global market (Haines, 2004).

Conclusion

The strategic plan is significant to the company, as the company needs not rely on the local market alone. In the advent of information technology, it is important for the company to exploit the vast international market by implementing this strategy to have a place in the international scene as a maker as well as distributor of classic cars.

References

Bradford, D. (2000). Simplified strategic planning. London: Chandler House.

Haines, S. (2004). ABCs of strategic management: An executive briefing and plan-to-plan day on strategic management in the 21st century. London: Sage.

Hendrick, R. (2011). Why drive a neo classic car? Zimmer Weekly, 5:6.

Kotler, P. (1986). Mega marketing. Harvard Business Review, March- April p. 8.

Naisbitt, J. (2008). Megatrends: Ten new directions transforming our lives. New Jersey: Macdonald.

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