Case 2-1 BMW Taps the Emerging Chinese Luxury market

1a) Human beings have a tendency to demand more luxury products when their income increases. As the text indicates, income of Chinese people has risen over the last few years so they start to demand more luxury goods. With their higher income also the more traditional collectivist values disappeared.
1b) Chinese people believe that the countries in Northern-Europe are symbols of luxury and with their recent rise in income they are starting to demand the same products that are available in Europe. Another reason is the recent change of position of the Chinese government, they used to have a collectivist point of view but in the last few years they have opened up their markets and became more Western orientated. With opening their markets more European products became available to the Chinese people. It also is a legal requirement for European companies to set up joint ventures with Chinese companies, European companies most likely choose the best rated Chinese companies what gives the Chinese people the idea that their products are of high quality.

5) Every international orientated company customizes their products for different countries and cultures. Every culture has its own preferences and demands for products and it would be smart for companies to adapt to these preferences. As written in the text, Chinese people demand more limo-like features, preferences per region differ and they are more focused on hybrid vehicles. Nowadays, customers are king and companies better adapt to their demand if they want to sell anything, if they don't, there are multiple other companies waiting in line to sell their products. One of the risks of extreme customization is the high costs of production. Companies have to invest in new machinery, hire different employees that are qualified for the job, and producing different