The Global Business Strategy of BMW Group
BA 5080 - Business Strategy
University of Cincinnati
August 27, 2024
Abstract
BMW is one of the “German big 3” luxury automakers, along with
Audi and Mercedes-Benz, which are the 3 bestselling luxury
automakers in the world. It produces mini and Rolls-Royce motor
cars, and is well-known for offering wide arrays of automobiles of
premium standards and outstanding quality worldwide. BMW’s
mission aims to communicate to customers that BMW’s reputation
and quality will become even stronger and continue to provide top-
notch products and services for customers. It reveals BMW’s desire to
become the most successful premium automotive firm in the industry.
BMW offers unique and premium products which cater to the needs
and requirements of its niche segment. This shows that BMW is
willing to take the risk and engage in discovering hidden opportunities
in the business environment along with challenging technology to
create new and innovative products. Introduction:Nowadays, people
cannot live without cars because of the development of global
economy. So that increases the competition between the motor
industries in order to meet customers’ needs and expectations. In other
words, competition motives the motor industries to launch new car
models to provide new functions for customers, new concepts, new
materials and future electronic components (meeting customers’ needs
even though they are rich or poor).
The key point to BMW group success is the brand strategy, but the
group was posed by the Mercedes-Benz (group leader of luxury
motorcar) from entering the luxury car series market. So, for that, to
form a good brand image become a big challenge for BMW. The
group start by the global marketing strategies in order to be localized
in different market, which can help BMW to localize globally. They
do a market research for the European, American and Asian markets.
This research help BMW to know its position in these markets, and it
results with the foundation of the relationships between the brand and
products, brand and communication as well as products and
environment. They end up by an advertising strategy based on a
tagline. (ukessays, 2016)Strategic Analysis BMW tries to gain the
maximum market share in the luxury car market around the world.
“The creation of a well-known brand image of the world does not
mean that it can be marketed in some particular market successfully”.
For that BMW decided to use a unique brand strategy system, called
global branding and localised marketing. (ukessays, 2016)So to
understand market needs and to form marketing strategy, a market
research should be done, “market research task is to determine the
ideal positioning of BMW in Europe. ” (Or in America or Asia…).
(ukessays, 2016)
PESTEL Analysis
To study and to understand a market, we should use PESTEL analysis.
So let’s take a look on the PESTEL analysis for BMW:
Political Environment
BMW reacted by producing automobiles of at least 85% recyclable
and up to 95% recoverable. The taxes and government policies are
crucial to BMW’s success of automobile demand in the global market.
Economic environment
BMW is exposed to high currency risk from US dollar, British Pound
and Chinese Renminbi.
BMW develops “greener” automobiles like hybrid cars. Technological
environment BMW uses technology to gain competitive advantage in
the production of engines, hence winning many glorious engineering
awards in the industry.
BMW to explore a new production direction by incorporating “green”
technology into its business strategy. • BMW will continue its
emphasis on developing new clean technologies for constant
innovation and enhancement of its products.
Environmental
BMW observed the changing trend of customers’ preferences and
support for “green” products, and therefore responded by increasing
its focus on manufacturing more fuel-efficient automobiles. Table 1
BMW PESTEL analysis (Hwee, 2015) According to PESTEL
analysis, which describes a framework of macro-environmental
factors used to analysis the impact on BMW group that should be
aware from new regulations and tax policies, which are crucial
political factor; from economic factors, which they have the most
direct effect on BMW profitability; from technological and
environmental, since new technologies will contribute to sustainable
solutions for “greener” products. These factors have both negative and
positive impact on BMW group, although the group should know how
to deal with the negative effects and to make it positive for the
company.
Porter’s Five Forces
To know what choice BMW should choose, to assess its attractiveness
and to have an effective strategic decision making, we should refer to
porter’s five forces framework. According to porter’s five forces
analysis, the strong brand identity and R&D experience of BMW will
help it to remain competitive in the future. And since the luxury
automotive industry is assessed to become more competitive in the
future, it puts BMW under pressure to continually improve its
competitive advantage to stay ahead from the competition. The threat
of new entrants and substitutes may both reach a moderate level in the
future as they may be new entrants and innovations in the industry;
and if they can successfully establish in the industry. So BMW should
expect to lose market share.
SWOT Analysis Matrix
To understand the current situation of BMW group, we should take a
look on its SWOT analysis, which refers to: SW (internal factors) and
OT (external factors). Strengths? Strong brand image. ? Niche product
(MINI, Roll-Royce…)? Qualified employees. Strong relationships
with suppliers. ? Strong R&D capabilities.
Weaknesses
Small brand portfolio.
Low cost products of its competitors.
High cost structure.
Opportunities
Used of advanced technology.
Poised to benefit from the growing demand for cars in BRIC
countries. Incising demand for hybrid electric cars (green technology)
Flexibility in development and manufacturing.
Low interest rates.
Benefit from strong brand image, niche product and high quality
suppliers to increase demand for cars in BRIC countries.
Ability to respond for “green technology”, because of the strong R&D
capabilities and the qualified employees.
Benefit from low interest rates to decrease the cost structure, so that it
will have ow cost products. |
The usage of advanced technology and the flexibility in development
help to improve the brand portfolio.
Threats
Strong completion in the luxury segment of cars.
Increase in fuel cost.
Environment protection regulations.
Strong brand image can help to have a high brand loyalty, which is
important to cut-off the competition.
Respond for “green technology” will protect the environment and
follow the regulations.
Benefit from strong relationships with suppliers to settle down the
potential rise from fuel costs.
Reducing cost structure in order to combat raw material cost rising.
Make cheap cars to make more profits than competitors, so that it can
increase the competitive advantage.
BMW is in a positive situation more than negative, and since the
conditions of the market are not just changing slowly it has to focus
correctly and change according to market conditions.
BMW is in a positive situation more than negative, and since the
conditions of the market are not just changing slowly it has to
focus correctly and change according to market conditions.
The SWOT analysis used to highlights where the company need to
change. We can see that the best opportunity for BMW is the
opportunity of exploring their “green” image further; the company has
earned a reputation for its performance of active safety and passive
safety include Fully Integrated Road Safety Technology, since it
attaches great importance to the safety and environmental issues. So
the need for reaction on the exploration of opportunities must be
evaluated as high. (Chambers, n.d. ) EvaluationBMW found that some
situations will be more understood after problems happened, and to
meet the European or other country’s needs, BMW should comply
with several requirements ( reliability, safety, quality and advanced
technology), so that people will consider it as an excellent car. Global
branding and localized marketing strategy will help BMW group to
meet customers’ needs when it will use modern ways to rebuild its
international positioning, so that it could find the best strategic
direction principles. Moreover, this strategy will help the group in
raising its competitive advantage and improving its strategic
positioning of the brand. The market research that BMW group have
done, results with solid foundation for the relationships between the
brand and products, brand and communication as well as products and
environment, and these relationships will help in solving market
problems. Based on these results a new brand strategy of BMW is
built (Formation and implementation). BMW knows deeply that it
should focus on the customer rather than the vehicles. So, according to
the blueprint of enterprise strategy, the core target market of the
BMW’s brand can be determined, where the scale and characteristics
of the different types of customers will be mastered by BMW group.
(ukessays, 2016)
Furthermore, the advertising strategy is a smart step from BMW by
doing advertising campaigns. Even though, competitors are big in the
North American Market (like Mercedes-Benz), so that BMW must
take the market share from these competitors. But according to survey
results (which has done by Ammirati Puris Lintas advertising
company) shows that there is no favorable impression for the brand of
BMW, since their cars have advanced requirements. So that’s why the
advertising strategy did not help BMW to attract the attention of
people by its interior design. For that reason it refers to a tagline that
help the advertising theme and positioning to achieve a great success
by attracting the new generation after highlighting the differences and
the advantages of the BMW group.
Recommendations
According to PESTEL, porter’s five forces and SWOT analysis, I
found that BMW is in a good situation, but even though it have some
points that needs to work on it, so that it can be an excellent car with
all requirements that a customer need. BMW employees are an
important resources for the company, they are a key factor for future
success to ensure future competitiveness. For that it should organize
various activities and trainings to boost employees’ confidence, which
strongly affects their work capacity, quality and production efficiency.
Since it have strong R&D capabilities, it can achieve higher quality of
vehicles, with unique customization and provided by the latest
technological features, so that its reliability will increase. (Hwee,
2015)By following the marketing strategies, BMW will be able to
share assets across geographical locations. So the production will
decrease; where cost drivers help the company to stay profitable while
serving the niche target market. And to cover the cost of these
investments slowly, R&D and production improvement will be
implemented across region by region. In terms of strategic flexible
planning and outstanding technological edge, help BMW to stay ahead
from its competitors. So it’s good for BMW to put more efforts in the
US: a steady market and lower production cost, since it has more
manufacturing facilities located in the US that will help reduce
additional shipping costs thus driving more profit. The company can
than focus on a new type of distribution or even a location of a facility
within the Asian market borders. (Chambers, n. d. ) Based on my
research, I found that BMW to maintain its prestige brand identity and
communication with customers, it needs to continue focusing on its
differentiation strategy. It can understand customer behavior and
invest in market research. So it’s also good for the group to attempt to
attract new consumers to the brand by creating a larger brand
portfolio, since a small brand portfolio has considered as a weakness
for it. Moreover, through new types of partnerships and
collaborations, BMW should continue to develop its business model;
which include: share technology through cyber security and
communication, and innovations for producing small engines based on
low emission technologies. Attract new highly qualified talents to the
company it is another strategy that help in transferring knowledge and
continue innovating vehicles and new production methods.
(Chambers, n. d.) (Hwee, 2015) (ukessays, 2016) (Fleischmann &
Sonja Ferber, 2006)
PESTEL Analysis
To study and to understand a market, we should use PESTEL analysis.
So let’s take a look on the PESTEL analysis for BMW:
Political Environment
BMW reacted by producing automobiles of at least 85% recyclable
and up to 95% recoverable. The taxes and government policies are
crucial to BMW’s success of automobile demand in the global market.
Economic environment
BMW is exposed to high currency risk from US dollar, British Pound
and Chinese Renminbi.
BMW develops “greener” automobiles like hybrid cars. Technological
environment BMW uses technology to gain competitive advantage in
the production of engines, hence winning many glorious engineering
awards in the industry.
BMW to explore a new production direction by incorporating “green”
technology into its business strategy. • BMW will continue its
emphasis on developing new clean technologies for constant
innovation and enhancement of its products.
Environmental
BMW observed the changing trend of customers’ preferences and
support for “green” products, and therefore responded by increasing
its focus on manufacturing more fuel-efficient automobiles. Table 1
BMW PESTEL analysis (Hwee, 2015) According to PESTEL
analysis, which describes a framework of macro-environmental
factors used to analysis the impact on BMW group that should be
aware from new regulations and tax policies, which are crucial
political factor; from economic factors, which they have the most
direct effect on BMW profitability; from technological and
environmental, since new technologies will contribute to sustainable
solutions for “greener” products. These factors have both negative and
positive impact on BMW group, although the group should know how
to deal with the negative effects and to make it positive for the
company.
Porter’s Five Forces
To know what choice BMW should choose, to assess its attractiveness
and to have an effective strategic decision making, we should refer to
porter’s five forces framework. According to porter’s five forces
analysis, the strong brand identity and R&D experience of BMW will
help it to remain competitive in the future. And since the luxury
automotive industry is assessed to become more competitive in the
future, it puts BMW under pressure to continually improve its
competitive advantage to stay ahead from the competition. The threat
of new entrants and substitutes may both reach a moderate level in the
future as they may be new entrants and innovations in the industry;
and if they can successfully establish in the industry. So BMW should
expect to lose market share.
SWOT Analysis Matrix
To understand the current situation of BMW group, we should take a
look on its SWOT analysis, which refers to: SW (internal factors) and
OT (external factors). Strengths? Strong brand image. ? Niche product
(MINI, Roll-Royce…)? Qualified employees. Strong relationships
with suppliers. ? Strong R&D capabilities.
Weaknesses
Small brand portfolio.
Low cost products of its competitors.
High cost structure.
Opportunities
Used of advanced technology.
Poised to benefit from the growing demand for cars in BRIC
countries. Incising demand for hybrid electric cars (green technology)
Flexibility in development and manufacturing.
Low interest rates.
Benefit from strong brand image, niche product and high quality
suppliers to increase demand for cars in BRIC countries.
Ability to respond for “green technology”, because of the strong R&D
capabilities and the qualified employees.
Benefit from low interest rates to decrease the cost structure, so that it
will have ow cost products. |
The usage of advanced technology and the flexibility in development
help to improve the brand portfolio.
Threats
Strong completion in the luxury segment of cars.
Increase in fuel cost.
Environment protection regulations.
Strong brand image can help to have a high brand loyalty, which is
important to cut-off the competition.
Respond for “green technology” will protect the environment and
follow the regulations.
Benefit from strong relationships with suppliers to settle down the
potential rise from fuel costs.
Reducing cost structure in order to combat raw material cost rising.
Make cheap cars to make more profits than competitors, so that it can
increase the competitive advantage.
BMW is in a positive situation more than negative, and since the
conditions of the market are not just changing slowly it has to focus
correctly and change according to market conditions.
BMW is in a positive situation more than negative, and since the
conditions of the market are not just changing slowly it has to
focus correctly and change according to market conditions.
The SWOT analysis used to highlights where the company need to
change. We can see that the best opportunity for BMW is the
opportunity of exploring their “green” image further; the company has
earned a reputation for its performance of active safety and passive
safety include Fully Integrated Road Safety Technology, since it
attaches great importance to the safety and environmental issues. So
the need for reaction on the exploration of opportunities must be
evaluated as high. (Chambers, n.d. ) EvaluationBMW found that some
situations will be more understood after problems happened, and to
meet the European or other country’s needs, BMW should comply
with several requirements ( reliability, safety, quality and advanced
technology), so that people will consider it as an excellent car. Global
branding and localized marketing strategy will help BMW group to
meet customers’ needs when it will use modern ways to rebuild its
international positioning, so that it could find the best strategic
direction principles. Moreover, this strategy will help the group in
raising its competitive advantage and improving its strategic
positioning of the brand. The market research that BMW group have
done, results with solid foundation for the relationships between the
brand and products, brand and communication as well as products and
environment, and these relationships will help in solving market
problems. Based on these results a new brand strategy of BMW is
built (Formation and implementation). BMW knows deeply that it
should focus on the customer rather than the vehicles. So, according to
the blueprint of enterprise strategy, the core target market of the
BMW’s brand can be determined, where the scale and characteristics
of the different types of customers will be mastered by BMW group.
(ukessays, 2016)
Furthermore, the advertising strategy is a smart step from BMW by
doing advertising campaigns. Even though, competitors are big in the
North American Market (like Mercedes-Benz), so that BMW must
take the market share from these competitors. But according to survey
results (which has done by Ammirati Puris Lintas advertising
company) shows that there is no favorable impression for the brand of
BMW, since their cars have advanced requirements. So that’s why the
advertising strategy did not help BMW to attract the attention of
people by its interior design. For that reason it refers to a tagline that
help the advertising theme and positioning to achieve a great success
by attracting the new generation after highlighting the differences and
the advantages of the BMW group.
Recommendations
According to PESTEL, porter’s five forces and SWOT analysis, I
found that BMW is in a good situation, but even though it have some
points that needs to work on it, so that it can be an excellent car with
all requirements that a customer need. BMW employees are an
important resources for the company, they are a key factor for future
success to ensure future competitiveness. For that it should organize
various activities and trainings to boost employees’ confidence, which
strongly affects their work capacity, quality and production efficiency.
Since it have strong R&D capabilities, it can achieve higher quality of
vehicles, with unique customization and provided by the latest
technological features, so that its reliability will increase. (Hwee,
2015)By following the marketing strategies, BMW will be able to
share assets across geographical locations. So the production will
decrease; where cost drivers help the company to stay profitable while
serving the niche target market. And to cover the cost of these
investments slowly, R&D and production improvement will be
implemented across region by region. In terms of strategic flexible
planning and outstanding technological edge, help BMW to stay ahead
from its competitors. So it’s good for BMW to put more efforts in the
US: a steady market and lower production cost, since it has more
manufacturing facilities located in the US that will help reduce
additional shipping costs thus driving more profit. The company can
than focus on a new type of distribution or even a location of a facility
within the Asian market borders. (Chambers, n. d. ) Based on my
research, I found that BMW to maintain its prestige brand identity and
communication with customers, it needs to continue focusing on its
differentiation strategy. It can understand customer behavior and
invest in market research. So it’s also good for the group to attempt to
attract new consumers to the brand by creating a larger brand
portfolio, since a small brand portfolio has considered as a weakness
for it. Moreover, through new types of partnerships and
collaborations, BMW should continue to develop its business model;
which include: share technology through cyber security and
communication, and innovations for producing small engines based on
low emission technologies. Attract new highly qualified talents to the
company it is another strategy that help in transferring knowledge and
continue innovating vehicles and new production methods.
(Chambers, n. d.) (Hwee, 2015) (ukessays, 2016) (Fleischmann &
Sonja Ferber, 2006)
PESTEL Analysis
To study and to understand a market, we should use PESTEL analysis.
So let’s take a look on the PESTEL analysis for BMW:
Political Environment
BMW reacted by producing automobiles of at least 85% recyclable
and up to 95% recoverable. The taxes and government policies are
crucial to BMW’s success of automobile demand in the global market.
Economic environment
BMW is exposed to high currency risk from US dollar, British Pound
and Chinese Renminbi.
BMW develops “greener” automobiles like hybrid cars. Technological
environment BMW uses technology to gain competitive advantage in
the production of engines, hence winning many glorious engineering
awards in the industry.
BMW to explore a new production direction by incorporating “green”
technology into its business strategy. • BMW will continue its
emphasis on developing new clean technologies for constant
innovation and enhancement of its products.
Environmental
BMW observed the changing trend of customers’ preferences and
support for “green” products, and therefore responded by increasing
its focus on manufacturing more fuel-efficient automobiles. Table 1
BMW PESTEL analysis (Hwee, 2015) According to PESTEL
analysis, which describes a framework of macro-environmental
factors used to analysis the impact on BMW group that should be
aware from new regulations and tax policies, which are crucial
political factor; from economic factors, which they have the most
direct effect on BMW profitability; from technological and
environmental, since new technologies will contribute to sustainable
solutions for “greener” products. These factors have both negative and
positive impact on BMW group, although the group should know how
to deal with the negative effects and to make it positive for the
company.
Porter’s Five Forces
To know what choice BMW should choose, to assess its attractiveness
and to have an effective strategic decision making, we should refer to
porter’s five forces framework. According to porter’s five forces
analysis, the strong brand identity and R&D experience of BMW will
help it to remain competitive in the future. And since the luxury
automotive industry is assessed to become more competitive in the
future, it puts BMW under pressure to continually improve its
competitive advantage to stay ahead from the competition. The threat
of new entrants and substitutes may both reach a moderate level in the
future as they may be new entrants and innovations in the industry;
and if they can successfully establish in the industry. So BMW should
expect to lose market share.
SWOT Analysis Matrix
To understand the current situation of BMW group, we should take a
look on its SWOT analysis, which refers to: SW (internal factors) and
OT (external factors). Strengths? Strong brand image. ? Niche product
(MINI, Roll-Royce…)? Qualified employees. Strong relationships
with suppliers. ? Strong R&D capabilities.
Weaknesses
Small brand portfolio.
Low cost products of its competitors.
High cost structure.
Opportunities
Used of advanced technology.
Poised to benefit from the growing demand for cars in BRIC
countries. Incising demand for hybrid electric cars (green technology)
Flexibility in development and manufacturing.
Low interest rates.
Benefit from strong brand image, niche product and high quality
suppliers to increase demand for cars in BRIC countries.
Ability to respond for “green technology”, because of the strong R&D
capabilities and the qualified employees.
Benefit from low interest rates to decrease the cost structure, so that it
will have ow cost products. |
The usage of advanced technology and the flexibility in development
help to improve the brand portfolio.
Threats
Strong completion in the luxury segment of cars.
Increase in fuel cost.
Environment protection regulations.
Strong brand image can help to have a high brand loyalty, which is
important to cut-off the competition.
Respond for “green technology” will protect the environment and
follow the regulations.
Benefit from strong relationships with suppliers to settle down the
potential rise from fuel costs.
Reducing cost structure in order to combat raw material cost rising.
Make cheap cars to make more profits than competitors, so that it can
increase the competitive advantage.
BMW is in a positive situation more than negative, and since the
conditions of the market are not just changing slowly it has to focus
correctly and change according to market conditions.
BMW is in a positive situation more than negative, and since the
conditions of the market are not just changing slowly it has to
focus correctly and change according to market conditions.
The SWOT analysis used to highlights where the company need to
change. We can see that the best opportunity for BMW is the
opportunity of exploring their “green” image further; the company has
earned a reputation for its performance of active safety and passive
safety include Fully Integrated Road Safety Technology, since it
attaches great importance to the safety and environmental issues. So
the need for reaction on the exploration of opportunities must be
evaluated as high. (Chambers, n.d. ) EvaluationBMW found that some
situations will be more understood after problems happened, and to
meet the European or other country’s needs, BMW should comply
with several requirements ( reliability, safety, quality and advanced
technology), so that people will consider it as an excellent car. Global
branding and localized marketing strategy will help BMW group to
meet customers’ needs when it will use modern ways to rebuild its
international positioning, so that it could find the best strategic
direction principles. Moreover, this strategy will help the group in
raising its competitive advantage and improving its strategic
positioning of the brand. The market research that BMW group have
done, results with solid foundation for the relationships between the
brand and products, brand and communication as well as products and
environment, and these relationships will help in solving market
problems. Based on these results a new brand strategy of BMW is
built (Formation and implementation). BMW knows deeply that it
should focus on the customer rather than the vehicles. So, according to
the blueprint of enterprise strategy, the core target market of the
BMW’s brand can be determined, where the scale and characteristics
of the different types of customers will be mastered by BMW group.
(ukessays, 2016)
Furthermore, the advertising strategy is a smart step from BMW by
doing advertising campaigns. Even though, competitors are big in the
North American Market (like Mercedes-Benz), so that BMW must
take the market share from these competitors. But according to survey
results (which has done by Ammirati Puris Lintas advertising
company) shows that there is no favorable impression for the brand of
BMW, since their cars have advanced requirements. So that’s why the
advertising strategy did not help BMW to attract the attention of
people by its interior design. For that reason it refers to a tagline that
help the advertising theme and positioning to achieve a great success
by attracting the new generation after highlighting the differences and
the advantages of the BMW group.
Recommendations
According to PESTEL, porter’s five forces and SWOT analysis, I
found that BMW is in a good situation, but even though it have some
points that needs to work on it, so that it can be an excellent car with
all requirements that a customer need. BMW employees are an
important resources for the company, they are a key factor for future
success to ensure future competitiveness. For that it should organize
various activities and trainings to boost employees’ confidence, which
strongly affects their work capacity, quality and production efficiency.
Since it have strong R&D capabilities, it can achieve higher quality of
vehicles, with unique customization and provided by the latest
technological features, so that its reliability will increase. (Hwee,
2015)By following the marketing strategies, BMW will be able to
share assets across geographical locations. So the production will
decrease; where cost drivers help the company to stay profitable while
serving the niche target market. And to cover the cost of these
investments slowly, R&D and production improvement will be
implemented across region by region. In terms of strategic flexible
planning and outstanding technological edge, help BMW to stay ahead
from its competitors. So it’s good for BMW to put more efforts in the
US: a steady market and lower production cost, since it has more
manufacturing facilities located in the US that will help reduce
additional shipping costs thus driving more profit. The company can
than focus on a new type of distribution or even a location of a facility
within the Asian market borders. (Chambers, n. d. ) Based on my
research, I found that BMW to maintain its prestige brand identity and
communication with customers, it needs to continue focusing on its
differentiation strategy. It can understand customer behavior and
invest in market research. So it’s also good for the group to attempt to
attract new consumers to the brand by creating a larger brand
portfolio, since a small brand portfolio has considered as a weakness
for it. Moreover, through new types of partnerships and
collaborations, BMW should continue to develop its business model;
which include: share technology through cyber security and
communication, and innovations for producing small engines based on
low emission technologies. Attract new highly qualified talents to the
company it is another strategy that help in transferring knowledge and
continue innovating vehicles and new production methods.
(Chambers, n. d.) (Hwee, 2015) (ukessays, 2016) (Fleischmann &
Sonja Ferber, 2006)
PESTEL Analysis
To study and to understand a market, we should use PESTEL analysis.
So let’s take a look on the PESTEL analysis for BMW:
Political Environment
BMW reacted by producing automobiles of at least 85% recyclable
and up to 95% recoverable. The taxes and government policies are
crucial to BMW’s success of automobile demand in the global market.
Economic environment
BMW is exposed to high currency risk from US dollar, British Pound
and Chinese Renminbi.
BMW develops “greener” automobiles like hybrid cars. Technological
environment BMW uses technology to gain competitive advantage in
the production of engines, hence winning many glorious engineering
awards in the industry.
BMW to explore a new production direction by incorporating “green”
technology into its business strategy. • BMW will continue its
emphasis on developing new clean technologies for constant
innovation and enhancement of its products.
Environmental
BMW observed the changing trend of customers’ preferences and
support for “green” products, and therefore responded by increasing
its focus on manufacturing more fuel-efficient automobiles. Table 1
BMW PESTEL analysis (Hwee, 2015) According to PESTEL
analysis, which describes a framework of macro-environmental
factors used to analysis the impact on BMW group that should be
aware from new regulations and tax policies, which are crucial
political factor; from economic factors, which they have the most
direct effect on BMW profitability; from technological and
environmental, since new technologies will contribute to sustainable
solutions for “greener” products. These factors have both negative and
positive impact on BMW group, although the group should know how
to deal with the negative effects and to make it positive for the
company.
Porter’s Five Forces
To know what choice BMW should choose, to assess its attractiveness
and to have an effective strategic decision making, we should refer to
porter’s five forces framework. According to porter’s five forces
analysis, the strong brand identity and R&D experience of BMW will
help it to remain competitive in the future. And since the luxury
automotive industry is assessed to become more competitive in the
future, it puts BMW under pressure to continually improve its
competitive advantage to stay ahead from the competition. The threat
of new entrants and substitutes may both reach a moderate level in the
future as they may be new entrants and innovations in the industry;
and if they can successfully establish in the industry. So BMW should
expect to lose market share.
SWOT Analysis Matrix
To understand the current situation of BMW group, we should take a
look on its SWOT analysis, which refers to: SW (internal factors) and
OT (external factors). Strengths? Strong brand image. ? Niche product
(MINI, Roll-Royce…)? Qualified employees. Strong relationships
with suppliers. ? Strong R&D capabilities.
Weaknesses
Small brand portfolio.
Low cost products of its competitors.
High cost structure.
Opportunities
Used of advanced technology.
Poised to benefit from the growing demand for cars in BRIC
countries. Incising demand for hybrid electric cars (green technology)
Flexibility in development and manufacturing.
Low interest rates.
Benefit from strong brand image, niche product and high quality
suppliers to increase demand for cars in BRIC countries.
Ability to respond for “green technology”, because of the strong R&D
capabilities and the qualified employees.
Benefit from low interest rates to decrease the cost structure, so that it
will have ow cost products. |
The usage of advanced technology and the flexibility in development
help to improve the brand portfolio.
Threats
Strong completion in the luxury segment of cars.
Increase in fuel cost.
Environment protection regulations.
Strong brand image can help to have a high brand loyalty, which is
important to cut-off the competition.
Respond for “green technology” will protect the environment and
follow the regulations.
Benefit from strong relationships with suppliers to settle down the
potential rise from fuel costs.
Reducing cost structure in order to combat raw material cost rising.
Make cheap cars to make more profits than competitors, so that it can
increase the competitive advantage.
BMW is in a positive situation more than negative, and since the
conditions of the market are not just changing slowly it has to focus
correctly and change according to market conditions.
BMW is in a positive situation more than negative, and since the
conditions of the market are not just changing slowly it has to
focus correctly and change according to market conditions.
The SWOT analysis used to highlights where the company need to
change. We can see that the best opportunity for BMW is the
opportunity of exploring their “green” image further; the company has
earned a reputation for its performance of active safety and passive
safety include Fully Integrated Road Safety Technology, since it
attaches great importance to the safety and environmental issues. So
the need for reaction on the exploration of opportunities must be
evaluated as high. (Chambers, n.d. ) EvaluationBMW found that some
situations will be more understood after problems happened, and to
meet the European or other country’s needs, BMW should comply
with several requirements ( reliability, safety, quality and advanced
technology), so that people will consider it as an excellent car. Global
branding and localized marketing strategy will help BMW group to
meet customers’ needs when it will use modern ways to rebuild its
international positioning, so that it could find the best strategic
direction principles. Moreover, this strategy will help the group in
raising its competitive advantage and improving its strategic
positioning of the brand. The market research that BMW group have
done, results with solid foundation for the relationships between the
brand and products, brand and communication as well as products and
environment, and these relationships will help in solving market
problems. Based on these results a new brand strategy of BMW is
built (Formation and implementation). BMW knows deeply that it
should focus on the customer rather than the vehicles. So, according to
the blueprint of enterprise strategy, the core target market of the
BMW’s brand can be determined, where the scale and characteristics
of the different types of customers will be mastered by BMW group.
(ukessays, 2016)
Furthermore, the advertising strategy is a smart step from BMW by
doing advertising campaigns. Even though, competitors are big in the
North American Market (like Mercedes-Benz), so that BMW must
take the market share from these competitors. But according to survey
results (which has done by Ammirati Puris Lintas advertising
company) shows that there is no favorable impression for the brand of
BMW, since their cars have advanced requirements. So that’s why the
advertising strategy did not help BMW to attract the attention of
people by its interior design. For that reason it refers to a tagline that
help the advertising theme and positioning to achieve a great success
by attracting the new generation after highlighting the differences and
the advantages of the BMW group.
Recommendations
According to PESTEL, porter’s five forces and SWOT analysis, I
found that BMW is in a good situation, but even though it have some
points that needs to work on it, so that it can be an excellent car with
all requirements that a customer need. BMW employees are an
important resources for the company, they are a key factor for future
success to ensure future competitiveness. For that it should organize
various activities and trainings to boost employees’ confidence, which
strongly affects their work capacity, quality and production efficiency.
Since it have strong R&D capabilities, it can achieve higher quality of
vehicles, with unique customization and provided by the latest
technological features, so that its reliability will increase. (Hwee,
2015)By following the marketing strategies, BMW will be able to
share assets across geographical locations. So the production will
decrease; where cost drivers help the company to stay profitable while
serving the niche target market. And to cover the cost of these
investments slowly, R&D and production improvement will be
implemented across region by region. In terms of strategic flexible
planning and outstanding technological edge, help BMW to stay ahead
from its competitors. So it’s good for BMW to put more efforts in the
US: a steady market and lower production cost, since it has more
manufacturing facilities located in the US that will help reduce
additional shipping costs thus driving more profit. The company can
than focus on a new type of distribution or even a location of a facility
within the Asian market borders. (Chambers, n. d. ) Based on my
research, I found that BMW to maintain its prestige brand identity and
communication with customers, it needs to continue focusing on its
differentiation strategy. It can understand customer behavior and
invest in market research. So it’s also good for the group to attempt to
attract new consumers to the brand by creating a larger brand
portfolio, since a small brand portfolio has considered as a weakness
for it. Moreover, through new types of partnerships and
collaborations, BMW should continue to develop its business model;
which include: share technology through cyber security and
communication, and innovations for producing small engines based on
low emission technologies. Attract new highly qualified talents to the
company it is another strategy that help in transferring knowledge and
continue innovating vehicles and new production methods.
(Chambers, n. d.) (Hwee, 2015) (ukessays, 2016) (Fleischmann &
Sonja Ferber, 2006)
PESTEL Analysis
To study and to understand a market, we should use PESTEL analysis.
So let’s take a look on the PESTEL analysis for BMW:
Political Environment
BMW reacted by producing automobiles of at least 85% recyclable
and up to 95% recoverable. The taxes and government policies are
crucial to BMW’s success of automobile demand in the global market.
Economic environment
BMW is exposed to high currency risk from US dollar, British Pound
and Chinese Renminbi.
BMW develops “greener” automobiles like hybrid cars. Technological
environment BMW uses technology to gain competitive advantage in
the production of engines, hence winning many glorious engineering
awards in the industry.
BMW to explore a new production direction by incorporating “green”
technology into its business strategy. • BMW will continue its
emphasis on developing new clean technologies for constant
innovation and enhancement of its products.
Environmental
BMW observed the changing trend of customers’ preferences and
support for “green” products, and therefore responded by increasing
its focus on manufacturing more fuel-efficient automobiles. Table 1
BMW PESTEL analysis (Hwee, 2015) According to PESTEL
analysis, which describes a framework of macro-environmental
factors used to analysis the impact on BMW group that should be
aware from new regulations and tax policies, which are crucial
political factor; from economic factors, which they have the most
direct effect on BMW profitability; from technological and
environmental, since new technologies will contribute to sustainable
solutions for “greener” products. These factors have both negative and
positive impact on BMW group, although the group should know how
to deal with the negative effects and to make it positive for the
company.
Porter’s Five Forces
To know what choice BMW should choose, to assess its attractiveness
and to have an effective strategic decision making, we should refer to
porter’s five forces framework. According to porter’s five forces
analysis, the strong brand identity and R&D experience of BMW will
help it to remain competitive in the future. And since the luxury
automotive industry is assessed to become more competitive in the
future, it puts BMW under pressure to continually improve its
competitive advantage to stay ahead from the competition. The threat
of new entrants and substitutes may both reach a moderate level in the
future as they may be new entrants and innovations in the industry;
and if they can successfully establish in the industry. So BMW should
expect to lose market share.
SWOT Analysis Matrix
To understand the current situation of BMW group, we should take a
look on its SWOT analysis, which refers to: SW (internal factors) and
OT (external factors). Strengths? Strong brand image. ? Niche product
(MINI, Roll-Royce…)? Qualified employees. Strong relationships
with suppliers. ? Strong R&D capabilities.
Weaknesses
Small brand portfolio.
Low cost products of its competitors.
High cost structure.
Opportunities
Used of advanced technology.
Poised to benefit from the growing demand for cars in BRIC
countries. Incising demand for hybrid electric cars (green technology)
Flexibility in development and manufacturing.
Low interest rates.
Benefit from strong brand image, niche product and high quality
suppliers to increase demand for cars in BRIC countries.
Ability to respond for “green technology”, because of the strong R&D
capabilities and the qualified employees.
Benefit from low interest rates to decrease the cost structure, so that it
will have ow cost products. |
The usage of advanced technology and the flexibility in development
help to improve the brand portfolio.
Threats
Strong completion in the luxury segment of cars.
Increase in fuel cost.
Environment protection regulations.
Strong brand image can help to have a high brand loyalty, which is
important to cut-off the competition.
Respond for “green technology” will protect the environment and
follow the regulations.
Benefit from strong relationships with suppliers to settle down the
potential rise from fuel costs.
Reducing cost structure in order to combat raw material cost rising.
Make cheap cars to make more profits than competitors, so that it can
increase the competitive advantage.
BMW is in a positive situation more than negative, and since the
conditions of the market are not just changing slowly it has to focus
correctly and change according to market conditions.
BMW is in a positive situation more than negative, and since the
conditions of the market are not just changing slowly it has to
focus correctly and change according to market conditions.
The SWOT analysis used to highlights where the company need to
change. We can see that the best opportunity for BMW is the
opportunity of exploring their “green” image further; the company has
earned a reputation for its performance of active safety and passive
safety include Fully Integrated Road Safety Technology, since it
attaches great importance to the safety and environmental issues. So
the need for reaction on the exploration of opportunities must be
evaluated as high. (Chambers, n.d. ) EvaluationBMW found that some
situations will be more understood after problems happened, and to
meet the European or other country’s needs, BMW should comply
with several requirements ( reliability, safety, quality and advanced
technology), so that people will consider it as an excellent car. Global
branding and localized marketing strategy will help BMW group to
meet customers’ needs when it will use modern ways to rebuild its
international positioning, so that it could find the best strategic
direction principles. Moreover, this strategy will help the group in
raising its competitive advantage and improving its strategic
positioning of the brand. The market research that BMW group have
done, results with solid foundation for the relationships between the
brand and products, brand and communication as well as products and
environment, and these relationships will help in solving market
problems. Based on these results a new brand strategy of BMW is
built (Formation and implementation). BMW knows deeply that it
should focus on the customer rather than the vehicles. So, according to
the blueprint of enterprise strategy, the core target market of the
BMW’s brand can be determined, where the scale and characteristics
of the different types of customers will be mastered by BMW group.
(ukessays, 2016)
Furthermore, the advertising strategy is a smart step from BMW by
doing advertising campaigns. Even though, competitors are big in the
North American Market (like Mercedes-Benz), so that BMW must
take the market share from these competitors. But according to survey
results (which has done by Ammirati Puris Lintas advertising
company) shows that there is no favorable impression for the brand of
BMW, since their cars have advanced requirements. So that’s why the
advertising strategy did not help BMW to attract the attention of
people by its interior design. For that reason it refers to a tagline that
help the advertising theme and positioning to achieve a great success
by attracting the new generation after highlighting the differences and
the advantages of the BMW group.
Recommendations
According to PESTEL, porter’s five forces and SWOT analysis, I
found that BMW is in a good situation, but even though it have some
points that needs to work on it, so that it can be an excellent car with
all requirements that a customer need. BMW employees are an
important resources for the company, they are a key factor for future
success to ensure future competitiveness. For that it should organize
various activities and trainings to boost employees’ confidence, which
strongly affects their work capacity, quality and production efficiency.
Since it have strong R&D capabilities, it can achieve higher quality of
vehicles, with unique customization and provided by the latest
technological features, so that its reliability will increase. (Hwee,
2015)By following the marketing strategies, BMW will be able to
share assets across geographical locations. So the production will
decrease; where cost drivers help the company to stay profitable while
serving the niche target market. And to cover the cost of these
investments slowly, R&D and production improvement will be
implemented across region by region. In terms of strategic flexible
planning and outstanding technological edge, help BMW to stay ahead
from its competitors. So it’s good for BMW to put more efforts in the
US: a steady market and lower production cost, since it has more
manufacturing facilities located in the US that will help reduce
additional shipping costs thus driving more profit. The company can
than focus on a new type of distribution or even a location of a facility
within the Asian market borders. (Chambers, n. d. ) Based on my
research, I found that BMW to maintain its prestige brand identity and
communication with customers, it needs to continue focusing on its
differentiation strategy. It can understand customer behavior and
invest in market research. So it’s also good for the group to attempt to
attract new consumers to the brand by creating a larger brand
portfolio, since a small brand portfolio has considered as a weakness
for it. Moreover, through new types of partnerships and
collaborations, BMW should continue to develop its business model;
which include: share technology through cyber security and
communication, and innovations for producing small engines based on
low emission technologies. Attract new highly qualified talents to the
company it is another strategy that help in transferring knowledge and
continue innovating vehicles and new production methods.
(Chambers, n. d.) (Hwee, 2015) (ukessays, 2016) (Fleischmann &
Sonja Ferber, 2006)
PESTEL Analysis
To study and to understand a market, we should use PESTEL analysis.
So let’s take a look on the PESTEL analysis for BMW:
Political Environment
BMW reacted by producing automobiles of at least 85% recyclable
and up to 95% recoverable. The taxes and government policies are
crucial to BMW’s success of automobile demand in the global market.
Economic environment
BMW is exposed to high currency risk from US dollar, British Pound
and Chinese Renminbi.
BMW develops “greener” automobiles like hybrid cars. Technological
environment BMW uses technology to gain competitive advantage in
the production of engines, hence winning many glorious engineering
awards in the industry.
BMW to explore a new production direction by incorporating “green”
technology into its business strategy. • BMW will continue its
emphasis on developing new clean technologies for constant
innovation and enhancement of its products.
Environmental
BMW observed the changing trend of customers’ preferences and
support for “green” products, and therefore responded by increasing
its focus on manufacturing more fuel-efficient automobiles. Table 1
BMW PESTEL analysis (Hwee, 2015) According to PESTEL
analysis, which describes a framework of macro-environmental
factors used to analysis the impact on BMW group that should be
aware from new regulations and tax policies, which are crucial
political factor; from economic factors, which they have the most
direct effect on BMW profitability; from technological and
environmental, since new technologies will contribute to sustainable
solutions for “greener” products. These factors have both negative and
positive impact on BMW group, although the group should know how
to deal with the negative effects and to make it positive for the
company.
Porter’s Five Forces
To know what choice BMW should choose, to assess its attractiveness
and to have an effective strategic decision making, we should refer to
porter’s five forces framework. According to porter’s five forces
analysis, the strong brand identity and R&D experience of BMW will
help it to remain competitive in the future. And since the luxury
automotive industry is assessed to become more competitive in the
future, it puts BMW under pressure to continually improve its
competitive advantage to stay ahead from the competition. The threat
of new entrants and substitutes may both reach a moderate level in the
future as they may be new entrants and innovations in the industry;
and if they can successfully establish in the industry. So BMW should
expect to lose market share.
SWOT Analysis Matrix
To understand the current situation of BMW group, we should take a
look on its SWOT analysis, which refers to: SW (internal factors) and
OT (external factors). Strengths? Strong brand image. ? Niche product
(MINI, Roll-Royce…)? Qualified employees. Strong relationships
with suppliers. ? Strong R&D capabilities.
Weaknesses
Small brand portfolio.
Low cost products of its competitors.
High cost structure.
Opportunities
Used of advanced technology.
Poised to benefit from the growing demand for cars in BRIC
countries. Incising demand for hybrid electric cars (green technology)
Flexibility in development and manufacturing.
Low interest rates.
Benefit from strong brand image, niche product and high quality
suppliers to increase demand for cars in BRIC countries.
Ability to respond for “green technology”, because of the strong R&D
capabilities and the qualified employees.
Benefit from low interest rates to decrease the cost structure, so that it
will have ow cost products. |
The usage of advanced technology and the flexibility in development
help to improve the brand portfolio.
Threats
Strong completion in the luxury segment of cars.
Increase in fuel cost.
Environment protection regulations.
Strong brand image can help to have a high brand loyalty, which is
important to cut-off the competition.
Respond for “green technology” will protect the environment and
follow the regulations.
Benefit from strong relationships with suppliers to settle down the
potential rise from fuel costs.
Reducing cost structure in order to combat raw material cost rising.
Make cheap cars to make more profits than competitors, so that it can
increase the competitive advantage.
BMW is in a positive situation more than negative, and since the
conditions of the market are not just changing slowly it has to focus
correctly and change according to market conditions.
BMW is in a positive situation more than negative, and since the
conditions of the market are not just changing slowly it has to
focus correctly and change according to market conditions.
The SWOT analysis used to highlights where the company need to
change. We can see that the best opportunity for BMW is the
opportunity of exploring their “green” image further; the company has
earned a reputation for its performance of active safety and passive
safety include Fully Integrated Road Safety Technology, since it
attaches great importance to the safety and environmental issues. So
the need for reaction on the exploration of opportunities must be
evaluated as high. (Chambers, n.d. ) EvaluationBMW found that some
situations will be more understood after problems happened, and to
meet the European or other country’s needs, BMW should comply
with several requirements ( reliability, safety, quality and advanced
technology), so that people will consider it as an excellent car. Global
branding and localized marketing strategy will help BMW group to
meet customers’ needs when it will use modern ways to rebuild its
international positioning, so that it could find the best strategic
direction principles. Moreover, this strategy will help the group in
raising its competitive advantage and improving its strategic
positioning of the brand. The market research that BMW group have
done, results with solid foundation for the relationships between the
brand and products, brand and communication as well as products and
environment, and these relationships will help in solving market
problems. Based on these results a new brand strategy of BMW is
built (Formation and implementation). BMW knows deeply that it
should focus on the customer rather than the vehicles. So, according to
the blueprint of enterprise strategy, the core target market of the
BMW’s brand can be determined, where the scale and characteristics
of the different types of customers will be mastered by BMW group.
(ukessays, 2016)
Furthermore, the advertising strategy is a smart step from BMW by
doing advertising campaigns. Even though, competitors are big in the
North American Market (like Mercedes-Benz), so that BMW must
take the market share from these competitors. But according to survey
results (which has done by Ammirati Puris Lintas advertising
company) shows that there is no favorable impression for the brand of
BMW, since their cars have advanced requirements. So that’s why the
advertising strategy did not help BMW to attract the attention of
people by its interior design. For that reason it refers to a tagline that
help the advertising theme and positioning to achieve a great success
by attracting the new generation after highlighting the differences and
the advantages of the BMW group.
Recommendations
According to PESTEL, porter’s five forces and SWOT analysis, I
found that BMW is in a good situation, but even though it have some
points that needs to work on it, so that it can be an excellent car with
all requirements that a customer need. BMW employees are an
important resources for the company, they are a key factor for future
success to ensure future competitiveness. For that it should organize
various activities and trainings to boost employees’ confidence, which
strongly affects their work capacity, quality and production efficiency.
Since it have strong R&D capabilities, it can achieve higher quality of
vehicles, with unique customization and provided by the latest
technological features, so that its reliability will increase. (Hwee,
2015)By following the marketing strategies, BMW will be able to
share assets across geographical locations. So the production will
decrease; where cost drivers help the company to stay profitable while
serving the niche target market. And to cover the cost of these
investments slowly, R&D and production improvement will be
implemented across region by region. In terms of strategic flexible
planning and outstanding technological edge, help BMW to stay ahead
from its competitors. So it’s good for BMW to put more efforts in the
US: a steady market and lower production cost, since it has more
manufacturing facilities located in the US that will help reduce
additional shipping costs thus driving more profit. The company can
than focus on a new type of distribution or even a location of a facility
within the Asian market borders. (Chambers, n. d. ) Based on my
research, I found that BMW to maintain its prestige brand identity and
communication with customers, it needs to continue focusing on its
differentiation strategy. It can understand customer behavior and
invest in market research. So it’s also good for the group to attempt to
attract new consumers to the brand by creating a larger brand
portfolio, since a small brand portfolio has considered as a weakness
for it. Moreover, through new types of partnerships and
collaborations, BMW should continue to develop its business model;
which include: share technology through cyber security and
communication, and innovations for producing small engines based on
low emission technologies. Attract new highly qualified talents to the
company it is another strategy that help in transferring knowledge and
continue innovating vehicles and new production methods.
(Chambers, n. d.) (Hwee, 2015) (ukessays, 2016) (Fleischmann &
Sonja Ferber, 2006)
PESTEL Analysis
To study and to understand a market, we should use PESTEL analysis.
So let’s take a look on the PESTEL analysis for BMW:
Political Environment
BMW reacted by producing automobiles of at least 85% recyclable
and up to 95% recoverable. The taxes and government policies are
crucial to BMW’s success of automobile demand in the global market.
Economic environment
BMW is exposed to high currency risk from US dollar, British Pound
and Chinese Renminbi.
BMW develops “greener” automobiles like hybrid cars. Technological
environment BMW uses technology to gain competitive advantage in
the production of engines, hence winning many glorious engineering
awards in the industry.
BMW to explore a new production direction by incorporating “green”
technology into its business strategy. • BMW will continue its
emphasis on developing new clean technologies for constant
innovation and enhancement of its products.
Environmental
BMW observed the changing trend of customers’ preferences and
support for “green” products, and therefore responded by increasing
its focus on manufacturing more fuel-efficient automobiles. Table 1
BMW PESTEL analysis (Hwee, 2015) According to PESTEL
analysis, which describes a framework of macro-environmental
factors used to analysis the impact on BMW group that should be
aware from new regulations and tax policies, which are crucial
political factor; from economic factors, which they have the most
direct effect on BMW profitability; from technological and
environmental, since new technologies will contribute to sustainable
solutions for “greener” products. These factors have both negative and
positive impact on BMW group, although the group should know how
to deal with the negative effects and to make it positive for the
company.
Porter’s Five Forces
To know what choice BMW should choose, to assess its attractiveness
and to have an effective strategic decision making, we should refer to
porter’s five forces framework. According to porter’s five forces
analysis, the strong brand identity and R&D experience of BMW will
help it to remain competitive in the future. And since the luxury
automotive industry is assessed to become more competitive in the
future, it puts BMW under pressure to continually improve its
competitive advantage to stay ahead from the competition. The threat
of new entrants and substitutes may both reach a moderate level in the
future as they may be new entrants and innovations in the industry;
and if they can successfully establish in the industry. So BMW should
expect to lose market share.
SWOT Analysis Matrix
To understand the current situation of BMW group, we should take a
look on its SWOT analysis, which refers to: SW (internal factors) and
OT (external factors). Strengths? Strong brand image. ? Niche product
(MINI, Roll-Royce…)? Qualified employees. Strong relationships
with suppliers. ? Strong R&D capabilities.
Weaknesses
Small brand portfolio.
Low cost products of its competitors.
High cost structure.
Opportunities
Used of advanced technology.
Poised to benefit from the growing demand for cars in BRIC
countries. Incising demand for hybrid electric cars (green technology)
Flexibility in development and manufacturing.
Low interest rates.
Benefit from strong brand image, niche product and high quality
suppliers to increase demand for cars in BRIC countries.
Ability to respond for “green technology”, because of the strong R&D
capabilities and the qualified employees.
Benefit from low interest rates to decrease the cost structure, so that it
will have ow cost products. |
The usage of advanced technology and the flexibility in development
help to improve the brand portfolio.
Threats
Strong completion in the luxury segment of cars.
Increase in fuel cost.
Environment protection regulations.
Strong brand image can help to have a high brand loyalty, which is
important to cut-off the competition.
Respond for “green technology” will protect the environment and
follow the regulations.
Benefit from strong relationships with suppliers to settle down the
potential rise from fuel costs.
Reducing cost structure in order to combat raw material cost rising.
Make cheap cars to make more profits than competitors, so that it can
increase the competitive advantage.
BMW is in a positive situation more than negative, and since the
conditions of the market are not just changing slowly it has to focus
correctly and change according to market conditions.
BMW is in a positive situation more than negative, and since the
conditions of the market are not just changing slowly it has to
focus correctly and change according to market conditions.
The SWOT analysis used to highlights where the company need to
change. We can see that the best opportunity for BMW is the
opportunity of exploring their “green” image further; the company has
earned a reputation for its performance of active safety and passive
safety include Fully Integrated Road Safety Technology, since it
attaches great importance to the safety and environmental issues. So
the need for reaction on the exploration of opportunities must be
evaluated as high. (Chambers, n.d. ) EvaluationBMW found that some
situations will be more understood after problems happened, and to
meet the European or other country’s needs, BMW should comply
with several requirements ( reliability, safety, quality and advanced
technology), so that people will consider it as an excellent car. Global
branding and localized marketing strategy will help BMW group to
meet customers’ needs when it will use modern ways to rebuild its
international positioning, so that it could find the best strategic
direction principles. Moreover, this strategy will help the group in
raising its competitive advantage and improving its strategic
positioning of the brand. The market research that BMW group have
done, results with solid foundation for the relationships between the
brand and products, brand and communication as well as products and
environment, and these relationships will help in solving market
problems. Based on these results a new brand strategy of BMW is
built (Formation and implementation). BMW knows deeply that it
should focus on the customer rather than the vehicles. So, according to
the blueprint of enterprise strategy, the core target market of the
BMW’s brand can be determined, where the scale and characteristics
of the different types of customers will be mastered by BMW group.
(ukessays, 2016)
Furthermore, the advertising strategy is a smart step from BMW by
doing advertising campaigns. Even though, competitors are big in the
North American Market (like Mercedes-Benz), so that BMW must
take the market share from these competitors. But according to survey
results (which has done by Ammirati Puris Lintas advertising
company) shows that there is no favorable impression for the brand of
BMW, since their cars have advanced requirements. So that’s why the
advertising strategy did not help BMW to attract the attention of
people by its interior design. For that reason it refers to a tagline that
help the advertising theme and positioning to achieve a great success
by attracting the new generation after highlighting the differences and
the advantages of the BMW group.
Recommendations
According to PESTEL, porter’s five forces and SWOT analysis, I
found that BMW is in a good situation, but even though it have some
points that needs to work on it, so that it can be an excellent car with
all requirements that a customer need. BMW employees are an
important resources for the company, they are a key factor for future
success to ensure future competitiveness. For that it should organize
various activities and trainings to boost employees’ confidence, which
strongly affects their work capacity, quality and production efficiency.
Since it have strong R&D capabilities, it can achieve higher quality of
vehicles, with unique customization and provided by the latest
technological features, so that its reliability will increase. (Hwee,
2015)By following the marketing strategies, BMW will be able to
share assets across geographical locations. So the production will
decrease; where cost drivers help the company to stay profitable while
serving the niche target market. And to cover the cost of these
investments slowly, R&D and production improvement will be
implemented across region by region. In terms of strategic flexible
planning and outstanding technological edge, help BMW to stay ahead
from its competitors. So it’s good for BMW to put more efforts in the
US: a steady market and lower production cost, since it has more
manufacturing facilities located in the US that will help reduce
additional shipping costs thus driving more profit. The company can
than focus on a new type of distribution or even a location of a facility
within the Asian market borders. (Chambers, n. d. ) Based on my
research, I found that BMW to maintain its prestige brand identity and
communication with customers, it needs to continue focusing on its
differentiation strategy. It can understand customer behavior and
invest in market research. So it’s also good for the group to attempt to
attract new consumers to the brand by creating a larger brand
portfolio, since a small brand portfolio has considered as a weakness
for it. Moreover, through new types of partnerships and
collaborations, BMW should continue to develop its business model;
which include: share technology through cyber security and
communication, and innovations for producing small engines based on
low emission technologies. Attract new highly qualified talents to the
company it is another strategy that help in transferring knowledge and
continue innovating vehicles and new production methods.
(Chambers, n. d.) (Hwee, 2015) (ukessays, 2016) (Fleischmann &
Sonja Ferber, 2006)
PESTEL Analysis
To study and to understand a market, we should use PESTEL analysis.
So let’s take a look on the PESTEL analysis for BMW:
Political Environment
BMW reacted by producing automobiles of at least 85% recyclable
and up to 95% recoverable. The taxes and government policies are
crucial to BMW’s success of automobile demand in the global market.
Economic environment
BMW is exposed to high currency risk from US dollar, British Pound
and Chinese Renminbi.
BMW develops “greener” automobiles like hybrid cars. Technological
environment BMW uses technology to gain competitive advantage in
the production of engines, hence winning many glorious engineering
awards in the industry.
BMW to explore a new production direction by incorporating “green”
technology into its business strategy. • BMW will continue its
emphasis on developing new clean technologies for constant
innovation and enhancement of its products.
Environmental
BMW observed the changing trend of customers’ preferences and
support for “green” products, and therefore responded by increasing
its focus on manufacturing more fuel-efficient automobiles. Table 1
BMW PESTEL analysis (Hwee, 2015) According to PESTEL
analysis, which describes a framework of macro-environmental
factors used to analysis the impact on BMW group that should be
aware from new regulations and tax policies, which are crucial
political factor; from economic factors, which they have the most
direct effect on BMW profitability; from technological and
environmental, since new technologies will contribute to sustainable
solutions for “greener” products. These factors have both negative and
positive impact on BMW group, although the group should know how
to deal with the negative effects and to make it positive for the
company.
Porter’s Five Forces
To know what choice BMW should choose, to assess its attractiveness
and to have an effective strategic decision making, we should refer to
porter’s five forces framework. According to porter’s five forces
analysis, the strong brand identity and R&D experience of BMW will
help it to remain competitive in the future. And since the luxury
automotive industry is assessed to become more competitive in the
future, it puts BMW under pressure to continually improve its
competitive advantage to stay ahead from the competition. The threat
of new entrants and substitutes may both reach a moderate level in the
future as they may be new entrants and innovations in the industry;
and if they can successfully establish in the industry. So BMW should
expect to lose market share.
SWOT Analysis Matrix
To understand the current situation of BMW group, we should take a
look on its SWOT analysis, which refers to: SW (internal factors) and
OT (external factors). Strengths? Strong brand image. ? Niche product
(MINI, Roll-Royce…)? Qualified employees. Strong relationships
with suppliers. ? Strong R&D capabilities.
Weaknesses
Small brand portfolio.
Low cost products of its competitors.
High cost structure.
Opportunities
Used of advanced technology.
Poised to benefit from the growing demand for cars in BRIC
countries. Incising demand for hybrid electric cars (green technology)
Flexibility in development and manufacturing.
Low interest rates.
Benefit from strong brand image, niche product and high quality
suppliers to increase demand for cars in BRIC countries.
Ability to respond for “green technology”, because of the strong R&D
capabilities and the qualified employees.
Benefit from low interest rates to decrease the cost structure, so that it
will have ow cost products. |
The usage of advanced technology and the flexibility in development
help to improve the brand portfolio.
Threats
Strong completion in the luxury segment of cars.
Increase in fuel cost.
Environment protection regulations.
Strong brand image can help to have a high brand loyalty, which is
important to cut-off the competition.
Respond for “green technology” will protect the environment and
follow the regulations.
Benefit from strong relationships with suppliers to settle down the
potential rise from fuel costs.
Reducing cost structure in order to combat raw material cost rising.
Make cheap cars to make more profits than competitors, so that it can
increase the competitive advantage.
BMW is in a positive situation more than negative, and since the
conditions of the market are not just changing slowly it has to focus
correctly and change according to market conditions.
BMW is in a positive situation more than negative, and since the
conditions of the market are not just changing slowly it has to
focus correctly and change according to market conditions.
The SWOT analysis used to highlights where the company need to
change. We can see that the best opportunity for BMW is the
opportunity of exploring their “green” image further; the company has
earned a reputation for its performance of active safety and passive
safety include Fully Integrated Road Safety Technology, since it
attaches great importance to the safety and environmental issues. So
the need for reaction on the exploration of opportunities must be
evaluated as high. (Chambers, n.d. ) EvaluationBMW found that some
situations will be more understood after problems happened, and to
meet the European or other country’s needs, BMW should comply
with several requirements ( reliability, safety, quality and advanced
technology), so that people will consider it as an excellent car. Global
branding and localized marketing strategy will help BMW group to
meet customers’ needs when it will use modern ways to rebuild its
international positioning, so that it could find the best strategic
direction principles. Moreover, this strategy will help the group in
raising its competitive advantage and improving its strategic
positioning of the brand. The market research that BMW group have
done, results with solid foundation for the relationships between the
brand and products, brand and communication as well as products and
environment, and these relationships will help in solving market
problems. Based on these results a new brand strategy of BMW is
built (Formation and implementation). BMW knows deeply that it
should focus on the customer rather than the vehicles. So, according to
the blueprint of enterprise strategy, the core target market of the
BMW’s brand can be determined, where the scale and characteristics
of the different types of customers will be mastered by BMW group.
(ukessays, 2016)
Furthermore, the advertising strategy is a smart step from BMW by
doing advertising campaigns. Even though, competitors are big in the
North American Market (like Mercedes-Benz), so that BMW must
take the market share from these competitors. But according to survey
results (which has done by Ammirati Puris Lintas advertising
company) shows that there is no favorable impression for the brand of
BMW, since their cars have advanced requirements. So that’s why the
advertising strategy did not help BMW to attract the attention of
people by its interior design. For that reason it refers to a tagline that
help the advertising theme and positioning to achieve a great success
by attracting the new generation after highlighting the differences and
the advantages of the BMW group.
Recommendations
According to PESTEL, porter’s five forces and SWOT analysis, I
found that BMW is in a good situation, but even though it have some
points that needs to work on it, so that it can be an excellent car with
all requirements that a customer need. BMW employees are an
important resources for the company, they are a key factor for future
success to ensure future competitiveness. For that it should organize
various activities and trainings to boost employees’ confidence, which
strongly affects their work capacity, quality and production efficiency.
Since it have strong R&D capabilities, it can achieve higher quality of
vehicles, with unique customization and provided by the latest
technological features, so that its reliability will increase. (Hwee,
2015)By following the marketing strategies, BMW will be able to
share assets across geographical locations. So the production will
decrease; where cost drivers help the company to stay profitable while
serving the niche target market. And to cover the cost of these
investments slowly, R&D and production improvement will be
implemented across region by region. In terms of strategic flexible
planning and outstanding technological edge, help BMW to stay ahead
from its competitors. So it’s good for BMW to put more efforts in the
US: a steady market and lower production cost, since it has more
manufacturing facilities located in the US that will help reduce
additional shipping costs thus driving more profit. The company can
than focus on a new type of distribution or even a location of a facility
within the Asian market borders. (Chambers, n. d. ) Based on my
research, I found that BMW to maintain its prestige brand identity and
communication with customers, it needs to continue focusing on its
differentiation strategy. It can understand customer behavior and
invest in market research. So it’s also good for the group to attempt to
attract new consumers to the brand by creating a larger brand
portfolio, since a small brand portfolio has considered as a weakness
for it. Moreover, through new types of partnerships and
collaborations, BMW should continue to develop its business model;
which include: share technology through cyber security and
communication, and innovations for producing small engines based on
low emission technologies. Attract new highly qualified talents to the
company it is another strategy that help in transferring knowledge and
continue innovating vehicles and new production methods.
(Chambers, n. d.) (Hwee, 2015) (ukessays, 2016) (Fleischmann &
Sonja Ferber, 2006)
PESTEL Analysis
To study and to understand a market, we should use PESTEL analysis.
So let’s take a look on the PESTEL analysis for BMW:
Political Environment
BMW reacted by producing automobiles of at least 85% recyclable
and up to 95% recoverable. The taxes and government policies are
crucial to BMW’s success of automobile demand in the global market.
Economic environment
BMW is exposed to high currency risk from US dollar, British Pound
and Chinese Renminbi.
BMW develops “greener” automobiles like hybrid cars. Technological
environment BMW uses technology to gain competitive advantage in
the production of engines, hence winning many glorious engineering
awards in the industry.
BMW to explore a new production direction by incorporating “green”
technology into its business strategy. • BMW will continue its
emphasis on developing new clean technologies for constant
innovation and enhancement of its products.
Environmental
BMW observed the changing trend of customers’ preferences and
support for “green” products, and therefore responded by increasing
its focus on manufacturing more fuel-efficient automobiles. Table 1
BMW PESTEL analysis (Hwee, 2015) According to PESTEL
analysis, which describes a framework of macro-environmental
factors used to analysis the impact on BMW group that should be
aware from new regulations and tax policies, which are crucial
political factor; from economic factors, which they have the most
direct effect on BMW profitability; from technological and
environmental, since new technologies will contribute to sustainable
solutions for “greener” products. These factors have both negative and
positive impact on BMW group, although the group should know how
to deal with the negative effects and to make it positive for the
company.
Porter’s Five Forces
To know what choice BMW should choose, to assess its attractiveness
and to have an effective strategic decision making, we should refer to
porter’s five forces framework. According to porter’s five forces
analysis, the strong brand identity and R&D experience of BMW will
help it to remain competitive in the future. And since the luxury
automotive industry is assessed to become more competitive in the
future, it puts BMW under pressure to continually improve its
competitive advantage to stay ahead from the competition. The threat
of new entrants and substitutes may both reach a moderate level in the
future as they may be new entrants and innovations in the industry;
and if they can successfully establish in the industry. So BMW should
expect to lose market share.
SWOT Analysis Matrix
To understand the current situation of BMW group, we should take a
look on its SWOT analysis, which refers to: SW (internal factors) and
OT (external factors). Strengths? Strong brand image. ? Niche product
(MINI, Roll-Royce…)? Qualified employees. Strong relationships
with suppliers. ? Strong R&D capabilities.
Weaknesses
Small brand portfolio.
Low cost products of its competitors.
High cost structure.
Opportunities
Used of advanced technology.
Poised to benefit from the growing demand for cars in BRIC
countries. Incising demand for hybrid electric cars (green technology)
Flexibility in development and manufacturing.
Low interest rates.
Benefit from strong brand image, niche product and high quality
suppliers to increase demand for cars in BRIC countries.
Ability to respond for “green technology”, because of the strong R&D
capabilities and the qualified employees.
Benefit from low interest rates to decrease the cost structure, so that it
will have ow cost products. |
The usage of advanced technology and the flexibility in development
help to improve the brand portfolio.
Threats
Strong completion in the luxury segment of cars.
Increase in fuel cost.
Environment protection regulations.
Strong brand image can help to have a high brand loyalty, which is
important to cut-off the competition.
Respond for “green technology” will protect the environment and
follow the regulations.
Benefit from strong relationships with suppliers to settle down the
potential rise from fuel costs.
Reducing cost structure in order to combat raw material cost rising.
Make cheap cars to make more profits than competitors, so that it can
increase the competitive advantage.
BMW is in a positive situation more than negative, and since the
conditions of the market are not just changing slowly it has to focus
correctly and change according to market conditions.
BMW is in a positive situation more than negative, and since the
conditions of the market are not just changing slowly it has to
focus correctly and change according to market conditions.
The SWOT analysis used to highlights where the company need to
change. We can see that the best opportunity for BMW is the
opportunity of exploring their “green” image further; the company has
earned a reputation for its performance of active safety and passive
safety include Fully Integrated Road Safety Technology, since it
attaches great importance to the safety and environmental issues. So
the need for reaction on the exploration of opportunities must be
evaluated as high. (Chambers, n.d. ) EvaluationBMW found that some
situations will be more understood after problems happened, and to
meet the European or other country’s needs, BMW should comply
with several requirements ( reliability, safety, quality and advanced
technology), so that people will consider it as an excellent car. Global
branding and localized marketing strategy will help BMW group to
meet customers’ needs when it will use modern ways to rebuild its
international positioning, so that it could find the best strategic
direction principles. Moreover, this strategy will help the group in
raising its competitive advantage and improving its strategic
positioning of the brand. The market research that BMW group have
done, results with solid foundation for the relationships between the
brand and products, brand and communication as well as products and
environment, and these relationships will help in solving market
problems. Based on these results a new brand strategy of BMW is
built (Formation and implementation). BMW knows deeply that it
should focus on the customer rather than the vehicles. So, according to
the blueprint of enterprise strategy, the core target market of the
BMW’s brand can be determined, where the scale and characteristics
of the different types of customers will be mastered by BMW group.
(ukessays, 2016)
Furthermore, the advertising strategy is a smart step from BMW by
doing advertising campaigns. Even though, competitors are big in the
North American Market (like Mercedes-Benz), so that BMW must
take the market share from these competitors. But according to survey
results (which has done by Ammirati Puris Lintas advertising
company) shows that there is no favorable impression for the brand of
BMW, since their cars have advanced requirements. So that’s why the
advertising strategy did not help BMW to attract the attention of
people by its interior design. For that reason it refers to a tagline that
help the advertising theme and positioning to achieve a great success
by attracting the new generation after highlighting the differences and
the advantages of the BMW group.
Recommendations
According to PESTEL, porter’s five forces and SWOT analysis, I
found that BMW is in a good situation, but even though it have some
points that needs to work on it, so that it can be an excellent car with
all requirements that a customer need. BMW employees are an
important resources for the company, they are a key factor for future
success to ensure future competitiveness. For that it should organize
various activities and trainings to boost employees’ confidence, which
strongly affects their work capacity, quality and production efficiency.
Since it have strong R&D capabilities, it can achieve higher quality of
vehicles, with unique customization and provided by the latest
technological features, so that its reliability will increase. (Hwee,
2015)By following the marketing strategies, BMW will be able to
share assets across geographical locations. So the production will
decrease; where cost drivers help the company to stay profitable while
serving the niche target market. And to cover the cost of these
investments slowly, R&D and production improvement will be
implemented across region by region. In terms of strategic flexible
planning and outstanding technological edge, help BMW to stay ahead
from its competitors. So it’s good for BMW to put more efforts in the
US: a steady market and lower production cost, since it has more
manufacturing facilities located in the US that will help reduce
additional shipping costs thus driving more profit. The company can
than focus on a new type of distribution or even a location of a facility
within the Asian market borders. (Chambers, n. d. ) Based on my
research, I found that BMW to maintain its prestige brand identity and
communication with customers, it needs to continue focusing on its
differentiation strategy. It can understand customer behavior and
invest in market research. So it’s also good for the group to attempt to
attract new consumers to the brand by creating a larger brand
portfolio, since a small brand portfolio has considered as a weakness
for it. Moreover, through new types of partnerships and
collaborations, BMW should continue to develop its business model;
which include: share technology through cyber security and
communication, and innovations for producing small engines based on
low emission technologies. Attract new highly qualified talents to the
company it is another strategy that help in transferring knowledge and
continue innovating vehicles and new production methods.
(Chambers, n. d.) (Hwee, 2015) (ukessays, 2016) (Fleischmann &
Sonja Ferber, 2006)
PESTEL Analysis
To study and to understand a market, we should use PESTEL analysis.
So let’s take a look on the PESTEL analysis for BMW:
Political Environment
BMW reacted by producing automobiles of at least 85% recyclable
and up to 95% recoverable. The taxes and government policies are
crucial to BMW’s success of automobile demand in the global market.
Economic environment
BMW is exposed to high currency risk from US dollar, British Pound
and Chinese Renminbi.
BMW develops “greener” automobiles like hybrid cars. Technological
environment BMW uses technology to gain competitive advantage in
the production of engines, hence winning many glorious engineering
awards in the industry.
BMW to explore a new production direction by incorporating “green”
technology into its business strategy. • BMW will continue its
emphasis on developing new clean technologies for constant
innovation and enhancement of its products.
Environmental
BMW observed the changing trend of customers’ preferences and
support for “green” products, and therefore responded by increasing
its focus on manufacturing more fuel-efficient automobiles. Table 1
BMW PESTEL analysis (Hwee, 2015) According to PESTEL
analysis, which describes a framework of macro-environmental
factors used to analysis the impact on BMW group that should be
aware from new regulations and tax policies, which are crucial
political factor; from economic factors, which they have the most
direct effect on BMW profitability; from technological and
environmental, since new technologies will contribute to sustainable
solutions for “greener” products. These factors have both negative and
positive impact on BMW group, although the group should know how
to deal with the negative effects and to make it positive for the
company.
Porter’s Five Forces
To know what choice BMW should choose, to assess its attractiveness
and to have an effective strategic decision making, we should refer to
porter’s five forces framework. According to porter’s five forces
analysis, the strong brand identity and R&D experience of BMW will
help it to remain competitive in the future. And since the luxury
automotive industry is assessed to become more competitive in the
future, it puts BMW under pressure to continually improve its
competitive advantage to stay ahead from the competition. The threat
of new entrants and substitutes may both reach a moderate level in the
future as they may be new entrants and innovations in the industry;
and if they can successfully establish in the industry. So BMW should
expect to lose market share.
SWOT Analysis Matrix
To understand the current situation of BMW group, we should take a
look on its SWOT analysis, which refers to: SW (internal factors) and
OT (external factors). Strengths? Strong brand image. ? Niche product
(MINI, Roll-Royce…)? Qualified employees. Strong relationships
with suppliers. ? Strong R&D capabilities.
Weaknesses
Small brand portfolio.
Low cost products of its competitors.
High cost structure.
Opportunities
Used of advanced technology.
Poised to benefit from the growing demand for cars in BRIC
countries. Incising demand for hybrid electric cars (green technology)
Flexibility in development and manufacturing.
Low interest rates.
Benefit from strong brand image, niche product and high quality
suppliers to increase demand for cars in BRIC countries.
Ability to respond for “green technology”, because of the strong R&D
capabilities and the qualified employees.
Benefit from low interest rates to decrease the cost structure, so that it
will have ow cost products. |
The usage of advanced technology and the flexibility in development
help to improve the brand portfolio.
Threats
Strong completion in the luxury segment of cars.
Increase in fuel cost.
Environment protection regulations.
Strong brand image can help to have a high brand loyalty, which is
important to cut-off the competition.
Respond for “green technology” will protect the environment and
follow the regulations.
Benefit from strong relationships with suppliers to settle down the
potential rise from fuel costs.
Reducing cost structure in order to combat raw material cost rising.
Make cheap cars to make more profits than competitors, so that it can
increase the competitive advantage.
BMW is in a positive situation more than negative, and since the
conditions of the market are not just changing slowly it has to focus
correctly and change according to market conditions.
BMW is in a positive situation more than negative, and since the
conditions of the market are not just changing slowly it has to
focus correctly and change according to market conditions.
The SWOT analysis used to highlights where the company need to
change. We can see that the best opportunity for BMW is the
opportunity of exploring their “green” image further; the company has
earned a reputation for its performance of active safety and passive
safety include Fully Integrated Road Safety Technology, since it
attaches great importance to the safety and environmental issues. So
the need for reaction on the exploration of opportunities must be
evaluated as high. (Chambers, n.d. ) EvaluationBMW found that some
situations will be more understood after problems happened, and to
meet the European or other country’s needs, BMW should comply
with several requirements ( reliability, safety, quality and advanced
technology), so that people will consider it as an excellent car. Global
branding and localized marketing strategy will help BMW group to
meet customers’ needs when it will use modern ways to rebuild its
international positioning, so that it could find the best strategic
direction principles. Moreover, this strategy will help the group in
raising its competitive advantage and improving its strategic
positioning of the brand. The market research that BMW group have
done, results with solid foundation for the relationships between the
brand and products, brand and communication as well as products and
environment, and these relationships will help in solving market
problems. Based on these results a new brand strategy of BMW is
built (Formation and implementation). BMW knows deeply that it
should focus on the customer rather than the vehicles. So, according to
the blueprint of enterprise strategy, the core target market of the
BMW’s brand can be determined, where the scale and characteristics
of the different types of customers will be mastered by BMW group.
(ukessays, 2016)
Furthermore, the advertising strategy is a smart step from BMW by
doing advertising campaigns. Even though, competitors are big in the
North American Market (like Mercedes-Benz), so that BMW must
take the market share from these competitors. But according to survey
results (which has done by Ammirati Puris Lintas advertising
company) shows that there is no favorable impression for the brand of
BMW, since their cars have advanced requirements. So that’s why the
advertising strategy did not help BMW to attract the attention of
people by its interior design. For that reason it refers to a tagline that
help the advertising theme and positioning to achieve a great success
by attracting the new generation after highlighting the differences and
the advantages of the BMW group.
Recommendations
According to PESTEL, porter’s five forces and SWOT analysis, I
found that BMW is in a good situation, but even though it have some
points that needs to work on it, so that it can be an excellent car with
all requirements that a customer need. BMW employees are an
important resources for the company, they are a key factor for future
success to ensure future competitiveness. For that it should organize
various activities and trainings to boost employees’ confidence, which
strongly affects their work capacity, quality and production efficiency.
Since it have strong R&D capabilities, it can achieve higher quality of
vehicles, with unique customization and provided by the latest
technological features, so that its reliability will increase. (Hwee,
2015)By following the marketing strategies, BMW will be able to
share assets across geographical locations. So the production will
decrease; where cost drivers help the company to stay profitable while
serving the niche target market. And to cover the cost of these
investments slowly, R&D and production improvement will be
implemented across region by region. In terms of strategic flexible
planning and outstanding technological edge, help BMW to stay ahead
from its competitors. So it’s good for BMW to put more efforts in the
US: a steady market and lower production cost, since it has more
manufacturing facilities located in the US that will help reduce
additional shipping costs thus driving more profit. The company can
than focus on a new type of distribution or even a location of a facility
within the Asian market borders. (Chambers, n. d. ) Based on my
research, I found that BMW to maintain its prestige brand identity and
communication with customers, it needs to continue focusing on its
differentiation strategy. It can understand customer behavior and
invest in market research. So it’s also good for the group to attempt to
attract new consumers to the brand by creating a larger brand
portfolio, since a small brand portfolio has considered as a weakness
for it. Moreover, through new types of partnerships and
collaborations, BMW should continue to develop its business model;
which include: share technology through cyber security and
communication, and innovations for producing small engines based on
low emission technologies. Attract new highly qualified talents to the
company it is another strategy that help in transferring knowledge and
continue innovating vehicles and new production methods.
(Chambers, n. d.) (Hwee, 2015) (ukessays, 2016) (Fleischmann &
Sonja Ferber, 2006)
PESTEL Analysis
To study and to understand a market, we should use PESTEL analysis.
So let’s take a look on the PESTEL analysis for BMW:
Political Environment
BMW reacted by producing automobiles of at least 85% recyclable
and up to 95% recoverable. The taxes and government policies are
crucial to BMW’s success of automobile demand in the global market.
Economic environment
BMW is exposed to high currency risk from US dollar, British Pound
and Chinese Renminbi.
BMW develops “greener” automobiles like hybrid cars. Technological
environment BMW uses technology to gain competitive advantage in
the production of engines, hence winning many glorious engineering
awards in the industry.
BMW to explore a new production direction by incorporating “green”
technology into its business strategy. • BMW will continue its
emphasis on developing new clean technologies for constant
innovation and enhancement of its products.
Environmental
BMW observed the changing trend of customers’ preferences and
support for “green” products, and therefore responded by increasing
its focus on manufacturing more fuel-efficient automobiles. Table 1
BMW PESTEL analysis (Hwee, 2015) According to PESTEL
analysis, which describes a framework of macro-environmental
factors used to analysis the impact on BMW group that should be
aware from new regulations and tax policies, which are crucial
political factor; from economic factors, which they have the most
direct effect on BMW profitability; from technological and
environmental, since new technologies will contribute to sustainable
solutions for “greener” products. These factors have both negative and
positive impact on BMW group, although the group should know how
to deal with the negative effects and to make it positive for the
company.
Porter’s Five Forces
To know what choice BMW should choose, to assess its attractiveness
and to have an effective strategic decision making, we should refer to
porter’s five forces framework. According to porter’s five forces
analysis, the strong brand identity and R&D experience of BMW will
help it to remain competitive in the future. And since the luxury
automotive industry is assessed to become more competitive in the
future, it puts BMW under pressure to continually improve its
competitive advantage to stay ahead from the competition. The threat
of new entrants and substitutes may both reach a moderate level in the
future as they may be new entrants and innovations in the industry;
and if they can successfully establish in the industry. So BMW should
expect to lose market share.
SWOT Analysis Matrix
To understand the current situation of BMW group, we should take a
look on its SWOT analysis, which refers to: SW (internal factors) and
OT (external factors). Strengths? Strong brand image. ? Niche product
(MINI, Roll-Royce…)? Qualified employees. Strong relationships
with suppliers. ? Strong R&D capabilities.
Weaknesses
Small brand portfolio.
Low cost products of its competitors.
High cost structure.
Opportunities
Used of advanced technology.
Poised to benefit from the growing demand for cars in BRIC
countries. Incising demand for hybrid electric cars (green technology)
Flexibility in development and manufacturing.
Low interest rates.
Benefit from strong brand image, niche product and high quality
suppliers to increase demand for cars in BRIC countries.
Ability to respond for “green technology”, because of the strong R&D
capabilities and the qualified employees.
Benefit from low interest rates to decrease the cost structure, so that it
will have ow cost products. |
The usage of advanced technology and the flexibility in development
help to improve the brand portfolio.
Threats
Strong completion in the luxury segment of cars.
Increase in fuel cost.
Environment protection regulations.
Strong brand image can help to have a high brand loyalty, which is
important to cut-off the competition.
Respond for “green technology” will protect the environment and
follow the regulations.
Benefit from strong relationships with suppliers to settle down the
potential rise from fuel costs.
Reducing cost structure in order to combat raw material cost rising.
Make cheap cars to make more profits than competitors, so that it can
increase the competitive advantage.
BMW is in a positive situation more than negative, and since the
conditions of the market are not just changing slowly it has to focus
correctly and change according to market conditions.
BMW is in a positive situation more than negative, and since the
conditions of the market are not just changing slowly it has to
focus correctly and change according to market conditions.
The SWOT analysis used to highlights where the company need to
change. We can see that the best opportunity for BMW is the
opportunity of exploring their “green” image further; the company has
earned a reputation for its performance of active safety and passive
safety include Fully Integrated Road Safety Technology, since it
attaches great importance to the safety and environmental issues. So
the need for reaction on the exploration of opportunities must be
evaluated as high. (Chambers, n.d. ) EvaluationBMW found that some
situations will be more understood after problems happened, and to
meet the European or other country’s needs, BMW should comply
with several requirements ( reliability, safety, quality and advanced
technology), so that people will consider it as an excellent car. Global
branding and localized marketing strategy will help BMW group to
meet customers’ needs when it will use modern ways to rebuild its
international positioning, so that it could find the best strategic
direction principles. Moreover, this strategy will help the group in
raising its competitive advantage and improving its strategic
positioning of the brand. The market research that BMW group have
done, results with solid foundation for the relationships between the
brand and products, brand and communication as well as products and
environment, and these relationships will help in solving market
problems. Based on these results a new brand strategy of BMW is
built (Formation and implementation). BMW knows deeply that it
should focus on the customer rather than the vehicles. So, according to
the blueprint of enterprise strategy, the core target market of the
BMW’s brand can be determined, where the scale and characteristics
of the different types of customers will be mastered by BMW group.
(ukessays, 2016)
Furthermore, the advertising strategy is a smart step from BMW by
doing advertising campaigns. Even though, competitors are big in the
North American Market (like Mercedes-Benz), so that BMW must
take the market share from these competitors. But according to survey
results (which has done by Ammirati Puris Lintas advertising
company) shows that there is no favorable impression for the brand of
BMW, since their cars have advanced requirements. So that’s why the
advertising strategy did not help BMW to attract the attention of
people by its interior design. For that reason it refers to a tagline that
help the advertising theme and positioning to achieve a great success
by attracting the new generation after highlighting the differences and
the advantages of the BMW group.
Recommendations
According to PESTEL, porter’s five forces and SWOT analysis, I
found that BMW is in a good situation, but even though it have some
points that needs to work on it, so that it can be an excellent car with
all requirements that a customer need. BMW employees are an
important resources for the company, they are a key factor for future
success to ensure future competitiveness. For that it should organize
various activities and trainings to boost employees’ confidence, which
strongly affects their work capacity, quality and production efficiency.
Since it have strong R&D capabilities, it can achieve higher quality of
vehicles, with unique customization and provided by the latest
technological features, so that its reliability will increase. (Hwee,
2015)By following the marketing strategies, BMW will be able to
share assets across geographical locations. So the production will
decrease; where cost drivers help the company to stay profitable while
serving the niche target market. And to cover the cost of these
investments slowly, R&D and production improvement will be
implemented across region by region. In terms of strategic flexible
planning and outstanding technological edge, help BMW to stay ahead
from its competitors. So it’s good for BMW to put more efforts in the
US: a steady market and lower production cost, since it has more
manufacturing facilities located in the US that will help reduce
additional shipping costs thus driving more profit. The company can
than focus on a new type of distribution or even a location of a facility
within the Asian market borders. (Chambers, n. d. ) Based on my
research, I found that BMW to maintain its prestige brand identity and
communication with customers, it needs to continue focusing on its
differentiation strategy. It can understand customer behavior and
invest in market research. So it’s also good for the group to attempt to
attract new consumers to the brand by creating a larger brand
portfolio, since a small brand portfolio has considered as a weakness
for it. Moreover, through new types of partnerships and
collaborations, BMW should continue to develop its business model;
which include: share technology through cyber security and
communication, and innovations for producing small engines based on
low emission technologies. Attract new highly qualified talents to the
company it is another strategy that help in transferring knowledge and
continue innovating vehicles and new production methods.
(Chambers, n. d.) (Hwee, 2015) (ukessays, 2016) (Fleischmann &
Sonja Ferber, 2006)
PESTEL Analysis
To study and to understand a market, we should use PESTEL analysis.
So let’s take a look on the PESTEL analysis for BMW:
Political Environment
BMW reacted by producing automobiles of at least 85% recyclable
and up to 95% recoverable. The taxes and government policies are
crucial to BMW’s success of automobile demand in the global market.
Economic environment
BMW is exposed to high currency risk from US dollar, British Pound
and Chinese Renminbi.
BMW develops “greener” automobiles like hybrid cars. Technological
environment BMW uses technology to gain competitive advantage in
the production of engines, hence winning many glorious engineering
awards in the industry.
BMW to explore a new production direction by incorporating “green”
technology into its business strategy. • BMW will continue its
emphasis on developing new clean technologies for constant
innovation and enhancement of its products.
Environmental
BMW observed the changing trend of customers’ preferences and
support for “green” products, and therefore responded by increasing
its focus on manufacturing more fuel-efficient automobiles. Table 1
BMW PESTEL analysis (Hwee, 2015) According to PESTEL
analysis, which describes a framework of macro-environmental
factors used to analysis the impact on BMW group that should be
aware from new regulations and tax policies, which are crucial
political factor; from economic factors, which they have the most
direct effect on BMW profitability; from technological and
environmental, since new technologies will contribute to sustainable
solutions for “greener” products. These factors have both negative and
positive impact on BMW group, although the group should know how
to deal with the negative effects and to make it positive for the
company.
Porter’s Five Forces
To know what choice BMW should choose, to assess its attractiveness
and to have an effective strategic decision making, we should refer to
porter’s five forces framework. According to porter’s five forces
analysis, the strong brand identity and R&D experience of BMW will
help it to remain competitive in the future. And since the luxury
automotive industry is assessed to become more competitive in the
future, it puts BMW under pressure to continually improve its
competitive advantage to stay ahead from the competition. The threat
of new entrants and substitutes may both reach a moderate level in the
future as they may be new entrants and innovations in the industry;
and if they can successfully establish in the industry. So BMW should
expect to lose market share.
SWOT Analysis Matrix
To understand the current situation of BMW group, we should take a
look on its SWOT analysis, which refers to: SW (internal factors) and
OT (external factors). Strengths? Strong brand image. ? Niche product
(MINI, Roll-Royce…)? Qualified employees. Strong relationships
with suppliers. ? Strong R&D capabilities.
Weaknesses
Small brand portfolio.
Low cost products of its competitors.
High cost structure.
Opportunities
Used of advanced technology.
Poised to benefit from the growing demand for cars in BRIC
countries. Incising demand for hybrid electric cars (green technology)
Flexibility in development and manufacturing.
Low interest rates.
Benefit from strong brand image, niche product and high quality
suppliers to increase demand for cars in BRIC countries.
Ability to respond for “green technology”, because of the strong R&D
capabilities and the qualified employees.
Benefit from low interest rates to decrease the cost structure, so that it
will have ow cost products. |
The usage of advanced technology and the flexibility in development
help to improve the brand portfolio.
Threats
Strong completion in the luxury segment of cars.
Increase in fuel cost.
Environment protection regulations.
Strong brand image can help to have a high brand loyalty, which is
important to cut-off the competition.
Respond for “green technology” will protect the environment and
follow the regulations.
Benefit from strong relationships with suppliers to settle down the
potential rise from fuel costs.
Reducing cost structure in order to combat raw material cost rising.
Make cheap cars to make more profits than competitors, so that it can
increase the competitive advantage.
BMW is in a positive situation more than negative, and since the
conditions of the market are not just changing slowly it has to focus
correctly and change according to market conditions.
BMW is in a positive situation more than negative, and since the
conditions of the market are not just changing slowly it has to
focus correctly and change according to market conditions.
The SWOT analysis used to highlights where the company need to
change. We can see that the best opportunity for BMW is the
opportunity of exploring their “green” image further; the company has
earned a reputation for its performance of active safety and passive
safety include Fully Integrated Road Safety Technology, since it
attaches great importance to the safety and environmental issues. So
the need for reaction on the exploration of opportunities must be
evaluated as high. (Chambers, n.d. ) EvaluationBMW found that some
situations will be more understood after problems happened, and to
meet the European or other country’s needs, BMW should comply
with several requirements ( reliability, safety, quality and advanced
technology), so that people will consider it as an excellent car. Global
branding and localized marketing strategy will help BMW group to
meet customers’ needs when it will use modern ways to rebuild its
international positioning, so that it could find the best strategic
direction principles. Moreover, this strategy will help the group in
raising its competitive advantage and improving its strategic
positioning of the brand. The market research that BMW group have
done, results with solid foundation for the relationships between the
brand and products, brand and communication as well as products and
environment, and these relationships will help in solving market
problems. Based on these results a new brand strategy of BMW is
built (Formation and implementation). BMW knows deeply that it
should focus on the customer rather than the vehicles. So, according to
the blueprint of enterprise strategy, the core target market of the
BMW’s brand can be determined, where the scale and characteristics
of the different types of customers will be mastered by BMW group.
(ukessays, 2016)
Furthermore, the advertising strategy is a smart step from BMW by
doing advertising campaigns. Even though, competitors are big in the
North American Market (like Mercedes-Benz), so that BMW must
take the market share from these competitors. But according to survey
results (which has done by Ammirati Puris Lintas advertising
company) shows that there is no favorable impression for the brand of
BMW, since their cars have advanced requirements. So that’s why the
advertising strategy did not help BMW to attract the attention of
people by its interior design. For that reason it refers to a tagline that
help the advertising theme and positioning to achieve a great success
by attracting the new generation after highlighting the differences and
the advantages of the BMW group.
Recommendations
According to PESTEL, porter’s five forces and SWOT analysis, I
found that BMW is in a good situation, but even though it have some
points that needs to work on it, so that it can be an excellent car with
all requirements that a customer need. BMW employees are an
important resources for the company, they are a key factor for future
success to ensure future competitiveness. For that it should organize
various activities and trainings to boost employees’ confidence, which
strongly affects their work capacity, quality and production efficiency.
Since it have strong R&D capabilities, it can achieve higher quality of
vehicles, with unique customization and provided by the latest
technological features, so that its reliability will increase. (Hwee,
2015)By following the marketing strategies, BMW will be able to
share assets across geographical locations. So the production will
decrease; where cost drivers help the company to stay profitable while
serving the niche target market. And to cover the cost of these
investments slowly, R&D and production improvement will be
implemented across region by region. In terms of strategic flexible
planning and outstanding technological edge, help BMW to stay ahead
from its competitors. So it’s good for BMW to put more efforts in the
US: a steady market and lower production cost, since it has more
manufacturing facilities located in the US that will help reduce
additional shipping costs thus driving more profit. The company can
than focus on a new type of distribution or even a location of a facility
within the Asian market borders. (Chambers, n. d. ) Based on my
research, I found that BMW to maintain its prestige brand identity and
communication with customers, it needs to continue focusing on its
differentiation strategy. It can understand customer behavior and
invest in market research. So it’s also good for the group to attempt to
attract new consumers to the brand by creating a larger brand
portfolio, since a small brand portfolio has considered as a weakness
for it. Moreover, through new types of partnerships and
collaborations, BMW should continue to develop its business model;
which include: share technology through cyber security and
communication, and innovations for producing small engines based on
low emission technologies. Attract new highly qualified talents to the
company it is another strategy that help in transferring knowledge and
continue innovating vehicles and new production methods.
(Chambers, n. d.) (Hwee, 2015) (ukessays, 2016) (Fleischmann &
Sonja Ferber, 2006)
PESTEL Analysis
To study and to understand a market, we should use PESTEL analysis.
So let’s take a look on the PESTEL analysis for BMW:
Political Environment
BMW reacted by producing automobiles of at least 85% recyclable
and up to 95% recoverable. The taxes and government policies are
crucial to BMW’s success of automobile demand in the global market.
Economic environment
BMW is exposed to high currency risk from US dollar, British Pound
and Chinese Renminbi.
BMW develops “greener” automobiles like hybrid cars. Technological
environment BMW uses technology to gain competitive advantage in
the production of engines, hence winning many glorious engineering
awards in the industry.
BMW to explore a new production direction by incorporating “green”
technology into its business strategy. • BMW will continue its
emphasis on developing new clean technologies for constant
innovation and enhancement of its products.
Environmental
BMW observed the changing trend of customers’ preferences and
support for “green” products, and therefore responded by increasing
its focus on manufacturing more fuel-efficient automobiles. Table 1
BMW PESTEL analysis (Hwee, 2015) According to PESTEL
analysis, which describes a framework of macro-environmental
factors used to analysis the impact on BMW group that should be
aware from new regulations and tax policies, which are crucial
political factor; from economic factors, which they have the most
direct effect on BMW profitability; from technological and
environmental, since new technologies will contribute to sustainable
solutions for “greener” products. These factors have both negative and
positive impact on BMW group, although the group should know how
to deal with the negative effects and to make it positive for the
company.
Porter’s Five Forces
To know what choice BMW should choose, to assess its attractiveness
and to have an effective strategic decision making, we should refer to
porter’s five forces framework. According to porter’s five forces
analysis, the strong brand identity and R&D experience of BMW will
help it to remain competitive in the future. And since the luxury
automotive industry is assessed to become more competitive in the
future, it puts BMW under pressure to continually improve its
competitive advantage to stay ahead from the competition. The threat
of new entrants and substitutes may both reach a moderate level in the
future as they may be new entrants and innovations in the industry;
and if they can successfully establish in the industry. So BMW should
expect to lose market share.
SWOT Analysis Matrix
To understand the current situation of BMW group, we should take a
look on its SWOT analysis, which refers to: SW (internal factors) and
OT (external factors). Strengths? Strong brand image. ? Niche product
(MINI, Roll-Royce…)? Qualified employees. Strong relationships
with suppliers. ? Strong R&D capabilities.
Weaknesses
Small brand portfolio.
Low cost products of its competitors.
High cost structure.
Opportunities
Used of advanced technology.
Poised to benefit from the growing demand for cars in BRIC
countries. Incising demand for hybrid electric cars (green technology)
Flexibility in development and manufacturing.
Low interest rates.
Benefit from strong brand image, niche product and high quality
suppliers to increase demand for cars in BRIC countries.
Ability to respond for “green technology”, because of the strong R&D
capabilities and the qualified employees.
Benefit from low interest rates to decrease the cost structure, so that it
will have ow cost products. |
The usage of advanced technology and the flexibility in development
help to improve the brand portfolio.
Threats
Strong completion in the luxury segment of cars.
Increase in fuel cost.
Environment protection regulations.
Strong brand image can help to have a high brand loyalty, which is
important to cut-off the competition.
Respond for “green technology” will protect the environment and
follow the regulations.
Benefit from strong relationships with suppliers to settle down the
potential rise from fuel costs.
Reducing cost structure in order to combat raw material cost rising.
Make cheap cars to make more profits than competitors, so that it can
increase the competitive advantage.
BMW is in a positive situation more than negative, and since the
conditions of the market are not just changing slowly it has to focus
correctly and change according to market conditions.
BMW is in a positive situation more than negative, and since the
conditions of the market are not just changing slowly it has to
focus correctly and change according to market conditions.
The SWOT analysis used to highlights where the company need to
change. We can see that the best opportunity for BMW is the
opportunity of exploring their “green” image further; the company has
earned a reputation for its performance of active safety and passive
safety include Fully Integrated Road Safety Technology, since it
attaches great importance to the safety and environmental issues. So
the need for reaction on the exploration of opportunities must be
evaluated as high. (Chambers, n.d. ) EvaluationBMW found that some
situations will be more understood after problems happened, and to
meet the European or other country’s needs, BMW should comply
with several requirements ( reliability, safety, quality and advanced
technology), so that people will consider it as an excellent car. Global
branding and localized marketing strategy will help BMW group to
meet customers’ needs when it will use modern ways to rebuild its
international positioning, so that it could find the best strategic
direction principles. Moreover, this strategy will help the group in
raising its competitive advantage and improving its strategic
positioning of the brand. The market research that BMW group have
done, results with solid foundation for the relationships between the
brand and products, brand and communication as well as products and
environment, and these relationships will help in solving market
problems. Based on these results a new brand strategy of BMW is
built (Formation and implementation). BMW knows deeply that it
should focus on the customer rather than the vehicles. So, according to
the blueprint of enterprise strategy, the core target market of the
BMW’s brand can be determined, where the scale and characteristics
of the different types of customers will be mastered by BMW group.
(ukessays, 2016)
Furthermore, the advertising strategy is a smart step from BMW by
doing advertising campaigns. Even though, competitors are big in the
North American Market (like Mercedes-Benz), so that BMW must
take the market share from these competitors. But according to survey
results (which has done by Ammirati Puris Lintas advertising
company) shows that there is no favorable impression for the brand of
BMW, since their cars have advanced requirements. So that’s why the
advertising strategy did not help BMW to attract the attention of
people by its interior design. For that reason it refers to a tagline that
help the advertising theme and positioning to achieve a great success
by attracting the new generation after highlighting the differences and
the advantages of the BMW group.
Recommendations
According to PESTEL, porter’s five forces and SWOT analysis, I
found that BMW is in a good situation, but even though it have some
points that needs to work on it, so that it can be an excellent car with
all requirements that a customer need. BMW employees are an
important resources for the company, they are a key factor for future
success to ensure future competitiveness. For that it should organize
various activities and trainings to boost employees’ confidence, which
strongly affects their work capacity, quality and production efficiency.
Since it have strong R&D capabilities, it can achieve higher quality of
vehicles, with unique customization and provided by the latest
technological features, so that its reliability will increase. (Hwee,
2015)By following the marketing strategies, BMW will be able to
share assets across geographical locations. So the production will
decrease; where cost drivers help the company to stay profitable while
serving the niche target market. And to cover the cost of these
investments slowly, R&D and production improvement will be
implemented across region by region. In terms of strategic flexible
planning and outstanding technological edge, help BMW to stay ahead
from its competitors. So it’s good for BMW to put more efforts in the
US: a steady market and lower production cost, since it has more
manufacturing facilities located in the US that will help reduce
additional shipping costs thus driving more profit. The company can
than focus on a new type of distribution or even a location of a facility
within the Asian market borders. (Chambers, n. d. ) Based on my
research, I found that BMW to maintain its prestige brand identity and
communication with customers, it needs to continue focusing on its
differentiation strategy. It can understand customer behavior and
invest in market research. So it’s also good for the group to attempt to
attract new consumers to the brand by creating a larger brand
portfolio, since a small brand portfolio has considered as a weakness
for it. Moreover, through new types of partnerships and
collaborations, BMW should continue to develop its business model;
which include: share technology through cyber security and
communication, and innovations for producing small engines based on
low emission technologies. Attract new highly qualified talents to the
company it is another strategy that help in transferring knowledge and
continue innovating vehicles and new production methods.
(Chambers, n. d.) (Hwee, 2015) (ukessays, 2016) (Fleischmann &
Sonja Ferber, 2006)
PESTEL Analysis
To study and to understand a market, we should use PESTEL analysis.
So let’s take a look on the PESTEL analysis for BMW:
Political Environment
BMW reacted by producing automobiles of at least 85% recyclable
and up to 95% recoverable. The taxes and government policies are
crucial to BMW’s success of automobile demand in the global market.
Economic environment
BMW is exposed to high currency risk from US dollar, British Pound
and Chinese Renminbi.
BMW develops “greener” automobiles like hybrid cars. Technological
environment BMW uses technology to gain competitive advantage in
the production of engines, hence winning many glorious engineering
awards in the industry.
BMW to explore a new production direction by incorporating “green”
technology into its business strategy. • BMW will continue its
emphasis on developing new clean technologies for constant
innovation and enhancement of its products.
Environmental
BMW observed the changing trend of customers’ preferences and
support for “green” products, and therefore responded by increasing
its focus on manufacturing more fuel-efficient automobiles. Table 1
BMW PESTEL analysis (Hwee, 2015) According to PESTEL
analysis, which describes a framework of macro-environmental
factors used to analysis the impact on BMW group that should be
aware from new regulations and tax policies, which are crucial
political factor; from economic factors, which they have the most
direct effect on BMW profitability; from technological and
environmental, since new technologies will contribute to sustainable
solutions for “greener” products. These factors have both negative and
positive impact on BMW group, although the group should know how
to deal with the negative effects and to make it positive for the
company.
Porter’s Five Forces
To know what choice BMW should choose, to assess its attractiveness
and to have an effective strategic decision making, we should refer to
porter’s five forces framework. According to porter’s five forces
analysis, the strong brand identity and R&D experience of BMW will
help it to remain competitive in the future. And since the luxury
automotive industry is assessed to become more competitive in the
future, it puts BMW under pressure to continually improve its
competitive advantage to stay ahead from the competition. The threat
of new entrants and substitutes may both reach a moderate level in the
future as they may be new entrants and innovations in the industry;
and if they can successfully establish in the industry. So BMW should
expect to lose market share.
SWOT Analysis Matrix
To understand the current situation of BMW group, we should take a
look on its SWOT analysis, which refers to: SW (internal factors) and
OT (external factors). Strengths? Strong brand image. ? Niche product
(MINI, Roll-Royce…)? Qualified employees. Strong relationships
with suppliers. ? Strong R&D capabilities.
Weaknesses
Small brand portfolio.
Low cost products of its competitors.
High cost structure.
Opportunities
Used of advanced technology.
Poised to benefit from the growing demand for cars in BRIC
countries. Incising demand for hybrid electric cars (green technology)
Flexibility in development and manufacturing.
Low interest rates.
Benefit from strong brand image, niche product and high quality
suppliers to increase demand for cars in BRIC countries.
Ability to respond for “green technology”, because of the strong R&D
capabilities and the qualified employees.
Benefit from low interest rates to decrease the cost structure, so that it
will have ow cost products. |
The usage of advanced technology and the flexibility in development
help to improve the brand portfolio.
Threats
Strong completion in the luxury segment of cars.
Increase in fuel cost.
Environment protection regulations.
Strong brand image can help to have a high brand loyalty, which is
important to cut-off the competition.
Respond for “green technology” will protect the environment and
follow the regulations.
Benefit from strong relationships with suppliers to settle down the
potential rise from fuel costs.
Reducing cost structure in order to combat raw material cost rising.
Make cheap cars to make more profits than competitors, so that it can
increase the competitive advantage.
BMW is in a positive situation more than negative, and since the
conditions of the market are not just changing slowly it has to focus
correctly and change according to market conditions.
BMW is in a positive situation more than negative, and since the
conditions of the market are not just changing slowly it has to
focus correctly and change according to market conditions.
The SWOT analysis used to highlights where the company need to
change. We can see that the best opportunity for BMW is the
opportunity of exploring their “green” image further; the company has
earned a reputation for its performance of active safety and passive
safety include Fully Integrated Road Safety Technology, since it
attaches great importance to the safety and environmental issues. So
the need for reaction on the exploration of opportunities must be
evaluated as high. (Chambers, n.d. ) EvaluationBMW found that some
situations will be more understood after problems happened, and to
meet the European or other country’s needs, BMW should comply
with several requirements ( reliability, safety, quality and advanced
technology), so that people will consider it as an excellent car. Global
branding and localized marketing strategy will help BMW group to
meet customers’ needs when it will use modern ways to rebuild its
international positioning, so that it could find the best strategic
direction principles. Moreover, this strategy will help the group in
raising its competitive advantage and improving its strategic
positioning of the brand. The market research that BMW group have
done, results with solid foundation for the relationships between the
brand and products, brand and communication as well as products and
environment, and these relationships will help in solving market
problems. Based on these results a new brand strategy of BMW is
built (Formation and implementation). BMW knows deeply that it
should focus on the customer rather than the vehicles. So, according to
the blueprint of enterprise strategy, the core target market of the
BMW’s brand can be determined, where the scale and characteristics
of the different types of customers will be mastered by BMW group.
(ukessays, 2016)
Furthermore, the advertising strategy is a smart step from BMW by
doing advertising campaigns. Even though, competitors are big in the
North American Market (like Mercedes-Benz), so that BMW must
take the market share from these competitors. But according to survey
results (which has done by Ammirati Puris Lintas advertising
company) shows that there is no favorable impression for the brand of
BMW, since their cars have advanced requirements. So that’s why the
advertising strategy did not help BMW to attract the attention of
people by its interior design. For that reason it refers to a tagline that
help the advertising theme and positioning to achieve a great success
by attracting the new generation after highlighting the differences and
the advantages of the BMW group.
Recommendations
According to PESTEL, porter’s five forces and SWOT analysis, I
found that BMW is in a good situation, but even though it have some
points that needs to work on it, so that it can be an excellent car with
all requirements that a customer need. BMW employees are an
important resources for the company, they are a key factor for future
success to ensure future competitiveness. For that it should organize
various activities and trainings to boost employees’ confidence, which
strongly affects their work capacity, quality and production efficiency.
Since it have strong R&D capabilities, it can achieve higher quality of
vehicles, with unique customization and provided by the latest
technological features, so that its reliability will increase. (Hwee,
2015)By following the marketing strategies, BMW will be able to
share assets across geographical locations. So the production will
decrease; where cost drivers help the company to stay profitable while
serving the niche target market. And to cover the cost of these
investments slowly, R&D and production improvement will be
implemented across region by region. In terms of strategic flexible
planning and outstanding technological edge, help BMW to stay ahead
from its competitors. So it’s good for BMW to put more efforts in the
US: a steady market and lower production cost, since it has more
manufacturing facilities located in the US that will help reduce
additional shipping costs thus driving more profit. The company can
than focus on a new type of distribution or even a location of a facility
within the Asian market borders. (Chambers, n. d. ) Based on my
research, I found that BMW to maintain its prestige brand identity and
communication with customers, it needs to continue focusing on its
differentiation strategy. It can understand customer behavior and
invest in market research. So it’s also good for the group to attempt to
attract new consumers to the brand by creating a larger brand
portfolio, since a small brand portfolio has considered as a weakness
for it. Moreover, through new types of partnerships and
collaborations, BMW should continue to develop its business model;
which include: share technology through cyber security and
communication, and innovations for producing small engines based on
low emission technologies. Attract new highly qualified talents to the
company it is another strategy that help in transferring knowledge and
continue innovating vehicles and new production methods.
(Chambers, n. d.) (Hwee, 2015) (ukessays, 2016) (Fleischmann &
Sonja Ferber, 2006)
PESTEL Analysis
To study and to understand a market, we should use PESTEL analysis.
So let’s take a look on the PESTEL analysis for BMW:
Political Environment
BMW reacted by producing automobiles of at least 85% recyclable
and up to 95% recoverable. The taxes and government policies are
crucial to BMW’s success of automobile demand in the global market.
Economic environment
BMW is exposed to high currency risk from US dollar, British Pound
and Chinese Renminbi.
BMW develops “greener” automobiles like hybrid cars. Technological
environment BMW uses technology to gain competitive advantage in
the production of engines, hence winning many glorious engineering
awards in the industry.
BMW to explore a new production direction by incorporating “green”
technology into its business strategy. • BMW will continue its
emphasis on developing new clean technologies for constant
innovation and enhancement of its products.
Environmental
BMW observed the changing trend of customers’ preferences and
support for “green” products, and therefore responded by increasing
its focus on manufacturing more fuel-efficient automobiles. Table 1
BMW PESTEL analysis (Hwee, 2015) According to PESTEL
analysis, which describes a framework of macro-environmental
factors used to analysis the impact on BMW group that should be
aware from new regulations and tax policies, which are crucial
political factor; from economic factors, which they have the most
direct effect on BMW profitability; from technological and
environmental, since new technologies will contribute to sustainable
solutions for “greener” products. These factors have both negative and
positive impact on BMW group, although the group should know how
to deal with the negative effects and to make it positive for the
company.
Porter’s Five Forces
To know what choice BMW should choose, to assess its attractiveness
and to have an effective strategic decision making, we should refer to
porter’s five forces framework. According to porter’s five forces
analysis, the strong brand identity and R&D experience of BMW will
help it to remain competitive in the future. And since the luxury
automotive industry is assessed to become more competitive in the
future, it puts BMW under pressure to continually improve its
competitive advantage to stay ahead from the competition. The threat
of new entrants and substitutes may both reach a moderate level in the
future as they may be new entrants and innovations in the industry;
and if they can successfully establish in the industry. So BMW should
expect to lose market share.
SWOT Analysis Matrix
To understand the current situation of BMW group, we should take a
look on its SWOT analysis, which refers to: SW (internal factors) and
OT (external factors). Strengths? Strong brand image. ? Niche product
(MINI, Roll-Royce…)? Qualified employees. Strong relationships
with suppliers. ? Strong R&D capabilities.
Weaknesses
Small brand portfolio.
Low cost products of its competitors.
High cost structure.
Opportunities
Used of advanced technology.
Poised to benefit from the growing demand for cars in BRIC
countries. Incising demand for hybrid electric cars (green technology)
Flexibility in development and manufacturing.
Low interest rates.
Benefit from strong brand image, niche product and high quality
suppliers to increase demand for cars in BRIC countries.
Ability to respond for “green technology”, because of the strong R&D
capabilities and the qualified employees.
Benefit from low interest rates to decrease the cost structure, so that it
will have ow cost products. |
The usage of advanced technology and the flexibility in development
help to improve the brand portfolio.
Threats
Strong completion in the luxury segment of cars.
Increase in fuel cost.
Environment protection regulations.
Strong brand image can help to have a high brand loyalty, which is
important to cut-off the competition.
Respond for “green technology” will protect the environment and
follow the regulations.
Benefit from strong relationships with suppliers to settle down the
potential rise from fuel costs.
Reducing cost structure in order to combat raw material cost rising.
Make cheap cars to make more profits than competitors, so that it can
increase the competitive advantage.
BMW is in a positive situation more than negative, and since the
conditions of the market are not just changing slowly it has to focus
correctly and change according to market conditions.
BMW is in a positive situation more than negative, and since the
conditions of the market are not just changing slowly it has to
focus correctly and change according to market conditions.
The SWOT analysis used to highlights where the company need to
change. We can see that the best opportunity for BMW is the
opportunity of exploring their “green” image further; the company has
earned a reputation for its performance of active safety and passive
safety include Fully Integrated Road Safety Technology, since it
attaches great importance to the safety and environmental issues. So
the need for reaction on the exploration of opportunities must be
evaluated as high. (Chambers, n.d. ) EvaluationBMW found that some
situations will be more understood after problems happened, and to
meet the European or other country’s needs, BMW should comply
with several requirements ( reliability, safety, quality and advanced
technology), so that people will consider it as an excellent car. Global
branding and localized marketing strategy will help BMW group to
meet customers’ needs when it will use modern ways to rebuild its
international positioning, so that it could find the best strategic
direction principles. Moreover, this strategy will help the group in
raising its competitive advantage and improving its strategic
positioning of the brand. The market research that BMW group have
done, results with solid foundation for the relationships between the
brand and products, brand and communication as well as products and
environment, and these relationships will help in solving market
problems. Based on these results a new brand strategy of BMW is
built (Formation and implementation). BMW knows deeply that it
should focus on the customer rather than the vehicles. So, according to
the blueprint of enterprise strategy, the core target market of the
BMW’s brand can be determined, where the scale and characteristics
of the different types of customers will be mastered by BMW group.
(ukessays, 2016)
Furthermore, the advertising strategy is a smart step from BMW by
doing advertising campaigns. Even though, competitors are big in the
North American Market (like Mercedes-Benz), so that BMW must
take the market share from these competitors. But according to survey
results (which has done by Ammirati Puris Lintas advertising
company) shows that there is no favorable impression for the brand of
BMW, since their cars have advanced requirements. So that’s why the
advertising strategy did not help BMW to attract the attention of
people by its interior design. For that reason it refers to a tagline that
help the advertising theme and positioning to achieve a great success
by attracting the new generation after highlighting the differences and
the advantages of the BMW group.
Recommendations
According to PESTEL, porter’s five forces and SWOT analysis, I
found that BMW is in a good situation, but even though it have some
points that needs to work on it, so that it can be an excellent car with
all requirements that a customer need. BMW employees are an
important resources for the company, they are a key factor for future
success to ensure future competitiveness. For that it should organize
various activities and trainings to boost employees’ confidence, which
strongly affects their work capacity, quality and production efficiency.
Since it have strong R&D capabilities, it can achieve higher quality of
vehicles, with unique customization and provided by the latest
technological features, so that its reliability will increase. (Hwee,
2015)By following the marketing strategies, BMW will be able to
share assets across geographical locations. So the production will
decrease; where cost drivers help the company to stay profitable while
serving the niche target market. And to cover the cost of these
investments slowly, R&D and production improvement will be
implemented across region by region. In terms of strategic flexible
planning and outstanding technological edge, help BMW to stay ahead
from its competitors. So it’s good for BMW to put more efforts in the
US: a steady market and lower production cost, since it has more
manufacturing facilities located in the US that will help reduce
additional shipping costs thus driving more profit. The company can
than focus on a new type of distribution or even a location of a facility
within the Asian market borders. (Chambers, n. d. ) Based on my
research, I found that BMW to maintain its prestige brand identity and
communication with customers, it needs to continue focusing on its
differentiation strategy. It can understand customer behavior and
invest in market research. So it’s also good for the group to attempt to
attract new consumers to the brand by creating a larger brand
portfolio, since a small brand portfolio has considered as a weakness
for it. Moreover, through new types of partnerships and
collaborations, BMW should continue to develop its business model;
which include: share technology through cyber security and
communication, and innovations for producing small engines based on
low emission technologies. Attract new highly qualified talents to the
company it is another strategy that help in transferring knowledge and
continue innovating vehicles and new production methods.
(Chambers, n. d.) (Hwee, 2015) (ukessays, 2016) (Fleischmann &
Sonja Ferber, 2006)
PESTEL Analysis
To study and to understand a market, we should use PESTEL analysis.
So let’s take a look on the PESTEL analysis for BMW:
Political Environment
BMW reacted by producing automobiles of at least 85% recyclable
and up to 95% recoverable. The taxes and government policies are
crucial to BMW’s success of automobile demand in the global market.
Economic environment
BMW is exposed to high currency risk from US dollar, British Pound
and Chinese Renminbi.
BMW develops “greener” automobiles like hybrid cars. Technological
environment BMW uses technology to gain competitive advantage in
the production of engines, hence winning many glorious engineering
awards in the industry.
BMW to explore a new production direction by incorporating “green”
technology into its business strategy. • BMW will continue its
emphasis on developing new clean technologies for constant
innovation and enhancement of its products.
Environmental
BMW observed the changing trend of customers’ preferences and
support for “green” products, and therefore responded by increasing
its focus on manufacturing more fuel-efficient automobiles. Table 1
BMW PESTEL analysis (Hwee, 2015) According to PESTEL
analysis, which describes a framework of macro-environmental
factors used to analysis the impact on BMW group that should be
aware from new regulations and tax policies, which are crucial
political factor; from economic factors, which they have the most
direct effect on BMW profitability; from technological and
environmental, since new technologies will contribute to sustainable
solutions for “greener” products. These factors have both negative and
positive impact on BMW group, although the group should know how
to deal with the negative effects and to make it positive for the
company.
Porter’s Five Forces
To know what choice BMW should choose, to assess its attractiveness
and to have an effective strategic decision making, we should refer to
porter’s five forces framework. According to porter’s five forces
analysis, the strong brand identity and R&D experience of BMW will
help it to remain competitive in the future. And since the luxury
automotive industry is assessed to become more competitive in the
future, it puts BMW under pressure to continually improve its
competitive advantage to stay ahead from the competition. The threat
of new entrants and substitutes may both reach a moderate level in the
future as they may be new entrants and innovations in the industry;
and if they can successfully establish in the industry. So BMW should
expect to lose market share.
SWOT Analysis Matrix
To understand the current situation of BMW group, we should take a
look on its SWOT analysis, which refers to: SW (internal factors) and
OT (external factors). Strengths? Strong brand image. ? Niche product
(MINI, Roll-Royce…)? Qualified employees. Strong relationships
with suppliers. ? Strong R&D capabilities.
Weaknesses
Small brand portfolio.
Low cost products of its competitors.
High cost structure.
Opportunities
Used of advanced technology.
Poised to benefit from the growing demand for cars in BRIC
countries. Incising demand for hybrid electric cars (green technology)
Flexibility in development and manufacturing.
Low interest rates.
Benefit from strong brand image, niche product and high quality
suppliers to increase demand for cars in BRIC countries.
Ability to respond for “green technology”, because of the strong R&D
capabilities and the qualified employees.
Benefit from low interest rates to decrease the cost structure, so that it
will have ow cost products. |
The usage of advanced technology and the flexibility in development
help to improve the brand portfolio.
Threats
Strong completion in the luxury segment of cars.
Increase in fuel cost.
Environment protection regulations.
Strong brand image can help to have a high brand loyalty, which is
important to cut-off the competition.
Respond for “green technology” will protect the environment and
follow the regulations.
Benefit from strong relationships with suppliers to settle down the
potential rise from fuel costs.
Reducing cost structure in order to combat raw material cost rising.
Make cheap cars to make more profits than competitors, so that it can
increase the competitive advantage.
BMW is in a positive situation more than negative, and since the
conditions of the market are not just changing slowly it has to focus
correctly and change according to market conditions.
BMW is in a positive situation more than negative, and since the
conditions of the market are not just changing slowly it has to
focus correctly and change according to market conditions.
The SWOT analysis used to highlights where the company need to
change. We can see that the best opportunity for BMW is the
opportunity of exploring their “green” image further; the company has
earned a reputation for its performance of active safety and passive
safety include Fully Integrated Road Safety Technology, since it
attaches great importance to the safety and environmental issues. So
the need for reaction on the exploration of opportunities must be
evaluated as high. (Chambers, n.d. ) EvaluationBMW found that some
situations will be more understood after problems happened, and to
meet the European or other country’s needs, BMW should comply
with several requirements ( reliability, safety, quality and advanced
technology), so that people will consider it as an excellent car. Global
branding and localized marketing strategy will help BMW group to
meet customers’ needs when it will use modern ways to rebuild its
international positioning, so that it could find the best strategic
direction principles. Moreover, this strategy will help the group in
raising its competitive advantage and improving its strategic
positioning of the brand. The market research that BMW group have
done, results with solid foundation for the relationships between the
brand and products, brand and communication as well as products and
environment, and these relationships will help in solving market
problems. Based on these results a new brand strategy of BMW is
built (Formation and implementation). BMW knows deeply that it
should focus on the customer rather than the vehicles. So, according to
the blueprint of enterprise strategy, the core target market of the
BMW’s brand can be determined, where the scale and characteristics
of the different types of customers will be mastered by BMW group.
(ukessays, 2016)
Furthermore, the advertising strategy is a smart step from BMW by
doing advertising campaigns. Even though, competitors are big in the
North American Market (like Mercedes-Benz), so that BMW must
take the market share from these competitors. But according to survey
results (which has done by Ammirati Puris Lintas advertising
company) shows that there is no favorable impression for the brand of
BMW, since their cars have advanced requirements. So that’s why the
advertising strategy did not help BMW to attract the attention of
people by its interior design. For that reason it refers to a tagline that
help the advertising theme and positioning to achieve a great success
by attracting the new generation after highlighting the differences and
the advantages of the BMW group.
Recommendations
According to PESTEL, porter’s five forces and SWOT analysis, I
found that BMW is in a good situation, but even though it have some
points that needs to work on it, so that it can be an excellent car with
all requirements that a customer need. BMW employees are an
important resources for the company, they are a key factor for future
success to ensure future competitiveness. For that it should organize
various activities and trainings to boost employees’ confidence, which
strongly affects their work capacity, quality and production efficiency.
Since it have strong R&D capabilities, it can achieve higher quality of
vehicles, with unique customization and provided by the latest
technological features, so that its reliability will increase. (Hwee,
2015)By following the marketing strategies, BMW will be able to
share assets across geographical locations. So the production will
decrease; where cost drivers help the company to stay profitable while
serving the niche target market. And to cover the cost of these
investments slowly, R&D and production improvement will be
implemented across region by region. In terms of strategic flexible
planning and outstanding technological edge, help BMW to stay ahead
from its competitors. So it’s good for BMW to put more efforts in the
US: a steady market and lower production cost, since it has more
manufacturing facilities located in the US that will help reduce
additional shipping costs thus driving more profit. The company can
than focus on a new type of distribution or even a location of a facility
within the Asian market borders. (Chambers, n. d. ) Based on my
research, I found that BMW to maintain its prestige brand identity and
communication with customers, it needs to continue focusing on its
differentiation strategy. It can understand customer behavior and
invest in market research. So it’s also good for the group to attempt to
attract new consumers to the brand by creating a larger brand
portfolio, since a small brand portfolio has considered as a weakness
for it. Moreover, through new types of partnerships and
collaborations, BMW should continue to develop its business model;
which include: share technology through cyber security and
communication, and innovations for producing small engines based on
low emission technologies. Attract new highly qualified talents to the
company it is another strategy that help in transferring knowledge and
continue innovating vehicles and new production methods.
(Chambers, n. d.) (Hwee, 2015) (ukessays, 2016) (Fleischmann &
Sonja Ferber, 2006)
PESTEL Analysis
To study and to understand a market, we should use PESTEL analysis.
So let’s take a look on the PESTEL analysis for BMW:
Political Environment
BMW reacted by producing automobiles of at least 85% recyclable
and up to 95% recoverable. The taxes and government policies are
crucial to BMW’s success of automobile demand in the global market.
Economic environment
BMW is exposed to high currency risk from US dollar, British Pound
and Chinese Renminbi.
BMW develops “greener” automobiles like hybrid cars. Technological
environment BMW uses technology to gain competitive advantage in
the production of engines, hence winning many glorious engineering
awards in the industry.
BMW to explore a new production direction by incorporating “green”
technology into its business strategy. • BMW will continue its
emphasis on developing new clean technologies for constant
innovation and enhancement of its products.
Environmental
BMW observed the changing trend of customers’ preferences and
support for “green” products, and therefore responded by increasing
its focus on manufacturing more fuel-efficient automobiles. Table 1
BMW PESTEL analysis (Hwee, 2015) According to PESTEL
analysis, which describes a framework of macro-environmental
factors used to analysis the impact on BMW group that should be
aware from new regulations and tax policies, which are crucial
political factor; from economic factors, which they have the most
direct effect on BMW profitability; from technological and
environmental, since new technologies will contribute to sustainable
solutions for “greener” products. These factors have both negative and
positive impact on BMW group, although the group should know how
to deal with the negative effects and to make it positive for the
company.
Porter’s Five Forces
To know what choice BMW should choose, to assess its attractiveness
and to have an effective strategic decision making, we should refer to
porter’s five forces framework. According to porter’s five forces
analysis, the strong brand identity and R&D experience of BMW will
help it to remain competitive in the future. And since the luxury
automotive industry is assessed to become more competitive in the
future, it puts BMW under pressure to continually improve its
competitive advantage to stay ahead from the competition. The threat
of new entrants and substitutes may both reach a moderate level in the
future as they may be new entrants and innovations in the industry;
and if they can successfully establish in the industry. So BMW should
expect to lose market share.
SWOT Analysis Matrix
To understand the current situation of BMW group, we should take a
look on its SWOT analysis, which refers to: SW (internal factors) and
OT (external factors). Strengths? Strong brand image. ? Niche product
(MINI, Roll-Royce…)? Qualified employees. Strong relationships
with suppliers. ? Strong R&D capabilities.
Weaknesses
Small brand portfolio.
Low cost products of its competitors.
High cost structure.
Opportunities
Used of advanced technology.
Poised to benefit from the growing demand for cars in BRIC
countries. Incising demand for hybrid electric cars (green technology)
Flexibility in development and manufacturing.
Low interest rates.
Benefit from strong brand image, niche product and high quality
suppliers to increase demand for cars in BRIC countries.
Ability to respond for “green technology”, because of the strong R&D
capabilities and the qualified employees.
Benefit from low interest rates to decrease the cost structure, so that it
will have ow cost products. |
The usage of advanced technology and the flexibility in development
help to improve the brand portfolio.
Threats
Strong completion in the luxury segment of cars.
Increase in fuel cost.
Environment protection regulations.
Strong brand image can help to have a high brand loyalty, which is
important to cut-off the competition.
Respond for “green technology” will protect the environment and
follow the regulations.
Benefit from strong relationships with suppliers to settle down the
potential rise from fuel costs.
Reducing cost structure in order to combat raw material cost rising.
Make cheap cars to make more profits than competitors, so that it can
increase the competitive advantage.
BMW is in a positive situation more than negative, and since the
conditions of the market are not just changing slowly it has to focus
correctly and change according to market conditions.
BMW is in a positive situation more than negative, and since the
conditions of the market are not just changing slowly it has to
focus correctly and change according to market conditions.
The SWOT analysis used to highlights where the company need to
change. We can see that the best opportunity for BMW is the
opportunity of exploring their “green” image further; the company has
earned a reputation for its performance of active safety and passive
safety include Fully Integrated Road Safety Technology, since it
attaches great importance to the safety and environmental issues. So
the need for reaction on the exploration of opportunities must be
evaluated as high. (Chambers, n.d. ) EvaluationBMW found that some
situations will be more understood after problems happened, and to
meet the European or other country’s needs, BMW should comply
with several requirements ( reliability, safety, quality and advanced
technology), so that people will consider it as an excellent car. Global
branding and localized marketing strategy will help BMW group to
meet customers’ needs when it will use modern ways to rebuild its
international positioning, so that it could find the best strategic
direction principles. Moreover, this strategy will help the group in
raising its competitive advantage and improving its strategic
positioning of the brand. The market research that BMW group have
done, results with solid foundation for the relationships between the
brand and products, brand and communication as well as products and
environment, and these relationships will help in solving market
problems. Based on these results a new brand strategy of BMW is
built (Formation and implementation). BMW knows deeply that it
should focus on the customer rather than the vehicles. So, according to
the blueprint of enterprise strategy, the core target market of the
BMW’s brand can be determined, where the scale and characteristics
of the different types of customers will be mastered by BMW group.
(ukessays, 2016)
Furthermore, the advertising strategy is a smart step from BMW by
doing advertising campaigns. Even though, competitors are big in the
North American Market (like Mercedes-Benz), so that BMW must
take the market share from these competitors. But according to survey
results (which has done by Ammirati Puris Lintas advertising
company) shows that there is no favorable impression for the brand of
BMW, since their cars have advanced requirements. So that’s why the
advertising strategy did not help BMW to attract the attention of
people by its interior design. For that reason it refers to a tagline that
help the advertising theme and positioning to achieve a great success
by attracting the new generation after highlighting the differences and
the advantages of the BMW group.
Recommendations
According to PESTEL, porter’s five forces and SWOT analysis, I
found that BMW is in a good situation, but even though it have some
points that needs to work on it, so that it can be an excellent car with
all requirements that a customer need. BMW employees are an
important resources for the company, they are a key factor for future
success to ensure future competitiveness. For that it should organize
various activities and trainings to boost employees’ confidence, which
strongly affects their work capacity, quality and production efficiency.
Since it have strong R&D capabilities, it can achieve higher quality of
vehicles, with unique customization and provided by the latest
technological features, so that its reliability will increase. (Hwee,
2015)By following the marketing strategies, BMW will be able to
share assets across geographical locations. So the production will
decrease; where cost drivers help the company to stay profitable while
serving the niche target market. And to cover the cost of these
investments slowly, R&D and production improvement will be
implemented across region by region. In terms of strategic flexible
planning and outstanding technological edge, help BMW to stay ahead
from its competitors. So it’s good for BMW to put more efforts in the
US: a steady market and lower production cost, since it has more
manufacturing facilities located in the US that will help reduce
additional shipping costs thus driving more profit. The company can
than focus on a new type of distribution or even a location of a facility
within the Asian market borders. (Chambers, n. d. ) Based on my
research, I found that BMW to maintain its prestige brand identity and
communication with customers, it needs to continue focusing on its
differentiation strategy. It can understand customer behavior and
invest in market research. So it’s also good for the group to attempt to
attract new consumers to the brand by creating a larger brand
portfolio, since a small brand portfolio has considered as a weakness
for it. Moreover, through new types of partnerships and
collaborations, BMW should continue to develop its business model;
which include: share technology through cyber security and
communication, and innovations for producing small engines based on
low emission technologies. Attract new highly qualified talents to the
company it is another strategy that help in transferring knowledge and
continue innovating vehicles and new production methods.
(Chambers, n. d.) (Hwee, 2015) (ukessays, 2016) (Fleischmann &
Sonja Ferber, 2006)
PESTEL Analysis
To study and to understand a market, we should use PESTEL analysis.
So let’s take a look on the PESTEL analysis for BMW:
Political Environment
BMW reacted by producing automobiles of at least 85% recyclable
and up to 95% recoverable. The taxes and government policies are
crucial to BMW’s success of automobile demand in the global market.
Economic environment
BMW is exposed to high currency risk from US dollar, British Pound
and Chinese Renminbi.
BMW develops “greener” automobiles like hybrid cars. Technological
environment BMW uses technology to gain competitive advantage in
the production of engines, hence winning many glorious engineering
awards in the industry.
BMW to explore a new production direction by incorporating “green”
technology into its business strategy. • BMW will continue its
emphasis on developing new clean technologies for constant
innovation and enhancement of its products.
Environmental
BMW observed the changing trend of customers’ preferences and
support for “green” products, and therefore responded by increasing
its focus on manufacturing more fuel-efficient automobiles. Table 1
BMW PESTEL analysis (Hwee, 2015) According to PESTEL
analysis, which describes a framework of macro-environmental
factors used to analysis the impact on BMW group that should be
aware from new regulations and tax policies, which are crucial
political factor; from economic factors, which they have the most
direct effect on BMW profitability; from technological and
environmental, since new technologies will contribute to sustainable
solutions for “greener” products. These factors have both negative and
positive impact on BMW group, although the group should know how
to deal with the negative effects and to make it positive for the
company.
Porter’s Five Forces
To know what choice BMW should choose, to assess its attractiveness
and to have an effective strategic decision making, we should refer to
porter’s five forces framework. According to porter’s five forces
analysis, the strong brand identity and R&D experience of BMW will
help it to remain competitive in the future. And since the luxury
automotive industry is assessed to become more competitive in the
future, it puts BMW under pressure to continually improve its
competitive advantage to stay ahead from the competition. The threat
of new entrants and substitutes may both reach a moderate level in the
future as they may be new entrants and innovations in the industry;
and if they can successfully establish in the industry. So BMW should
expect to lose market share.
SWOT Analysis Matrix
To understand the current situation of BMW group, we should take a
look on its SWOT analysis, which refers to: SW (internal factors) and
OT (external factors). Strengths? Strong brand image. ? Niche product
(MINI, Roll-Royce…)? Qualified employees. Strong relationships
with suppliers. ? Strong R&D capabilities.
Weaknesses
Small brand portfolio.
Low cost products of its competitors.
High cost structure.
Opportunities
Used of advanced technology.
Poised to benefit from the growing demand for cars in BRIC
countries. Incising demand for hybrid electric cars (green technology)
Flexibility in development and manufacturing.
Low interest rates.
Benefit from strong brand image, niche product and high quality
suppliers to increase demand for cars in BRIC countries.
Ability to respond for “green technology”, because of the strong R&D
capabilities and the qualified employees.
Benefit from low interest rates to decrease the cost structure, so that it
will have ow cost products. |
The usage of advanced technology and the flexibility in development
help to improve the brand portfolio.
Threats
Strong completion in the luxury segment of cars.
Increase in fuel cost.
Environment protection regulations.
Strong brand image can help to have a high brand loyalty, which is
important to cut-off the competition.
Respond for “green technology” will protect the environment and
follow the regulations.
Benefit from strong relationships with suppliers to settle down the
potential rise from fuel costs.
Reducing cost structure in order to combat raw material cost rising.
Make cheap cars to make more profits than competitors, so that it can
increase the competitive advantage.
BMW is in a positive situation more than negative, and since the
conditions of the market are not just changing slowly it has to focus
correctly and change according to market conditions.
BMW is in a positive situation more than negative, and since the
conditions of the market are not just changing slowly it has to
focus correctly and change according to market conditions.
The SWOT analysis used to highlights where the company need to
change. We can see that the best opportunity for BMW is the
opportunity of exploring their “green” image further; the company has
earned a reputation for its performance of active safety and passive
safety include Fully Integrated Road Safety Technology, since it
attaches great importance to the safety and environmental issues. So
the need for reaction on the exploration of opportunities must be
evaluated as high. (Chambers, n.d. ) EvaluationBMW found that some
situations will be more understood after problems happened, and to
meet the European or other country’s needs, BMW should comply
with several requirements ( reliability, safety, quality and advanced
technology), so that people will consider it as an excellent car. Global
branding and localized marketing strategy will help BMW group to
meet customers’ needs when it will use modern ways to rebuild its
international positioning, so that it could find the best strategic
direction principles. Moreover, this strategy will help the group in
raising its competitive advantage and improving its strategic
positioning of the brand. The market research that BMW group have
done, results with solid foundation for the relationships between the
brand and products, brand and communication as well as products and
environment, and these relationships will help in solving market
problems. Based on these results a new brand strategy of BMW is
built (Formation and implementation). BMW knows deeply that it
should focus on the customer rather than the vehicles. So, according to
the blueprint of enterprise strategy, the core target market of the
BMW’s brand can be determined, where the scale and characteristics
of the different types of customers will be mastered by BMW group.
(ukessays, 2016)
Furthermore, the advertising strategy is a smart step from BMW by
doing advertising campaigns. Even though, competitors are big in the
North American Market (like Mercedes-Benz), so that BMW must
take the market share from these competitors. But according to survey
results (which has done by Ammirati Puris Lintas advertising
company) shows that there is no favorable impression for the brand of
BMW, since their cars have advanced requirements. So that’s why the
advertising strategy did not help BMW to attract the attention of
people by its interior design. For that reason it refers to a tagline that
help the advertising theme and positioning to achieve a great success
by attracting the new generation after highlighting the differences and
the advantages of the BMW group.
Recommendations
According to PESTEL, porter’s five forces and SWOT analysis, I
found that BMW is in a good situation, but even though it have some
points that needs to work on it, so that it can be an excellent car with
all requirements that a customer need. BMW employees are an
important resources for the company, they are a key factor for future
success to ensure future competitiveness. For that it should organize
various activities and trainings to boost employees’ confidence, which
strongly affects their work capacity, quality and production efficiency.
Since it have strong R&D capabilities, it can achieve higher quality of
vehicles, with unique customization and provided by the latest
technological features, so that its reliability will increase. (Hwee,
2015)By following the marketing strategies, BMW will be able to
share assets across geographical locations. So the production will
decrease; where cost drivers help the company to stay profitable while
serving the niche target market. And to cover the cost of these
investments slowly, R&D and production improvement will be
implemented across region by region. In terms of strategic flexible
planning and outstanding technological edge, help BMW to stay ahead
from its competitors. So it’s good for BMW to put more efforts in the
US: a steady market and lower production cost, since it has more
manufacturing facilities located in the US that will help reduce
additional shipping costs thus driving more profit. The company can
than focus on a new type of distribution or even a location of a facility
within the Asian market borders. (Chambers, n. d. ) Based on my
research, I found that BMW to maintain its prestige brand identity and
communication with customers, it needs to continue focusing on its
differentiation strategy. It can understand customer behavior and
invest in market research. So it’s also good for the group to attempt to
attract new consumers to the brand by creating a larger brand
portfolio, since a small brand portfolio has considered as a weakness
for it. Moreover, through new types of partnerships and
collaborations, BMW should continue to develop its business model;
which include: share technology through cyber security and
communication, and innovations for producing small engines based on
low emission technologies. Attract new highly qualified talents to the
company it is another strategy that help in transferring knowledge and
continue innovating vehicles and new production methods.
(Chambers, n. d.) (Hwee, 2015) (ukessays, 2016) (Fleischmann &
Sonja Ferber, 2006)
PESTEL Analysis
To study and to understand a market, we should use PESTEL analysis.
So let’s take a look on the PESTEL analysis for BMW:
Political Environment
BMW reacted by producing automobiles of at least 85% recyclable
and up to 95% recoverable. The taxes and government policies are
crucial to BMW’s success of automobile demand in the global market.
Economic environment
BMW is exposed to high currency risk from US dollar, British Pound
and Chinese Renminbi.
BMW develops “greener” automobiles like hybrid cars. Technological
environment BMW uses technology to gain competitive advantage in
the production of engines, hence winning many glorious engineering
awards in the industry.
BMW to explore a new production direction by incorporating “green”
technology into its business strategy. • BMW will continue its
emphasis on developing new clean technologies for constant
innovation and enhancement of its products.
Environmental
BMW observed the changing trend of customers’ preferences and
support for “green” products, and therefore responded by increasing
its focus on manufacturing more fuel-efficient automobiles. Table 1
BMW PESTEL analysis (Hwee, 2015) According to PESTEL
analysis, which describes a framework of macro-environmental
factors used to analysis the impact on BMW group that should be
aware from new regulations and tax policies, which are crucial
political factor; from economic factors, which they have the most
direct effect on BMW profitability; from technological and
environmental, since new technologies will contribute to sustainable
solutions for “greener” products. These factors have both negative and
positive impact on BMW group, although the group should know how
to deal with the negative effects and to make it positive for the
company.
Porter’s Five Forces
To know what choice BMW should choose, to assess its attractiveness
and to have an effective strategic decision making, we should refer to
porter’s five forces framework. According to porter’s five forces
analysis, the strong brand identity and R&D experience of BMW will
help it to remain competitive in the future. And since the luxury
automotive industry is assessed to become more competitive in the
future, it puts BMW under pressure to continually improve its
competitive advantage to stay ahead from the competition. The threat
of new entrants and substitutes may both reach a moderate level in the
future as they may be new entrants and innovations in the industry;
and if they can successfully establish in the industry. So BMW should
expect to lose market share.
SWOT Analysis Matrix
To understand the current situation of BMW group, we should take a
look on its SWOT analysis, which refers to: SW (internal factors) and
OT (external factors). Strengths? Strong brand image. ? Niche product
(MINI, Roll-Royce…)? Qualified employees. Strong relationships
with suppliers. ? Strong R&D capabilities.
Weaknesses
Small brand portfolio.
Low cost products of its competitors.
High cost structure.
Opportunities
Used of advanced technology.
Poised to benefit from the growing demand for cars in BRIC
countries. Incising demand for hybrid electric cars (green technology)
Flexibility in development and manufacturing.
Low interest rates.
Benefit from strong brand image, niche product and high quality
suppliers to increase demand for cars in BRIC countries.
Ability to respond for “green technology”, because of the strong R&D
capabilities and the qualified employees.
Benefit from low interest rates to decrease the cost structure, so that it
will have ow cost products. |
The usage of advanced technology and the flexibility in development
help to improve the brand portfolio.
Threats
Strong completion in the luxury segment of cars.
Increase in fuel cost.
Environment protection regulations.
Strong brand image can help to have a high brand loyalty, which is
important to cut-off the competition.
Respond for “green technology” will protect the environment and
follow the regulations.
Benefit from strong relationships with suppliers to settle down the
potential rise from fuel costs.
Reducing cost structure in order to combat raw material cost rising.
Make cheap cars to make more profits than competitors, so that it can
increase the competitive advantage.
BMW is in a positive situation more than negative, and since the
conditions of the market are not just changing slowly it has to focus
correctly and change according to market conditions.
BMW is in a positive situation more than negative, and since the
conditions of the market are not just changing slowly it has to
focus correctly and change according to market conditions.
The SWOT analysis used to highlights where the company need to
change. We can see that the best opportunity for BMW is the
opportunity of exploring their “green” image further; the company has
earned a reputation for its performance of active safety and passive
safety include Fully Integrated Road Safety Technology, since it
attaches great importance to the safety and environmental issues. So
the need for reaction on the exploration of opportunities must be
evaluated as high. (Chambers, n.d. ) EvaluationBMW found that some
situations will be more understood after problems happened, and to
meet the European or other country’s needs, BMW should comply
with several requirements ( reliability, safety, quality and advanced
technology), so that people will consider it as an excellent car. Global
branding and localized marketing strategy will help BMW group to
meet customers’ needs when it will use modern ways to rebuild its
international positioning, so that it could find the best strategic
direction principles. Moreover, this strategy will help the group in
raising its competitive advantage and improving its strategic
positioning of the brand. The market research that BMW group have
done, results with solid foundation for the relationships between the
brand and products, brand and communication as well as products and
environment, and these relationships will help in solving market
problems. Based on these results a new brand strategy of BMW is
built (Formation and implementation). BMW knows deeply that it
should focus on the customer rather than the vehicles. So, according to
the blueprint of enterprise strategy, the core target market of the
BMW’s brand can be determined, where the scale and characteristics
of the different types of customers will be mastered by BMW group.
(ukessays, 2016)
Furthermore, the advertising strategy is a smart step from BMW by
doing advertising campaigns. Even though, competitors are big in the
North American Market (like Mercedes-Benz), so that BMW must
take the market share from these competitors. But according to survey
results (which has done by Ammirati Puris Lintas advertising
company) shows that there is no favorable impression for the brand of
BMW, since their cars have advanced requirements. So that’s why the
advertising strategy did not help BMW to attract the attention of
people by its interior design. For that reason it refers to a tagline that
help the advertising theme and positioning to achieve a great success
by attracting the new generation after highlighting the differences and
the advantages of the BMW group.
Recommendations
According to PESTEL, porter’s five forces and SWOT analysis, I
found that BMW is in a good situation, but even though it have some
points that needs to work on it, so that it can be an excellent car with
all requirements that a customer need. BMW employees are an
important resources for the company, they are a key factor for future
success to ensure future competitiveness. For that it should organize
various activities and trainings to boost employees’ confidence, which
strongly affects their work capacity, quality and production efficiency.
Since it have strong R&D capabilities, it can achieve higher quality of
vehicles, with unique customization and provided by the latest
technological features, so that its reliability will increase. (Hwee,
2015)By following the marketing strategies, BMW will be able to
share assets across geographical locations. So the production will
decrease; where cost drivers help the company to stay profitable while
serving the niche target market. And to cover the cost of these
investments slowly, R&D and production improvement will be
implemented across region by region. In terms of strategic flexible
planning and outstanding technological edge, help BMW to stay ahead
from its competitors. So it’s good for BMW to put more efforts in the
US: a steady market and lower production cost, since it has more
manufacturing facilities located in the US that will help reduce
additional shipping costs thus driving more profit. The company can
than focus on a new type of distribution or even a location of a facility
within the Asian market borders. (Chambers, n. d. ) Based on my
research, I found that BMW to maintain its prestige brand identity and
communication with customers, it needs to continue focusing on its
differentiation strategy. It can understand customer behavior and
invest in market research. So it’s also good for the group to attempt to
attract new consumers to the brand by creating a larger brand
portfolio, since a small brand portfolio has considered as a weakness
for it. Moreover, through new types of partnerships and
collaborations, BMW should continue to develop its business model;
which include: share technology through cyber security and
communication, and innovations for producing small engines based on
low emission technologies. Attract new highly qualified talents to the
company it is another strategy that help in transferring knowledge and
continue innovating vehicles and new production methods.
(Chambers, n. d.) (Hwee, 2015) (ukessays, 2016) (Fleischmann &
Sonja Ferber, 2006)
PESTEL Analysis
To study and to understand a market, we should use PESTEL analysis.
So let’s take a look on the PESTEL analysis for BMW:
Political Environment
BMW reacted by producing automobiles of at least 85% recyclable
and up to 95% recoverable. The taxes and government policies are
crucial to BMW’s success of automobile demand in the global market.
Economic environment
BMW is exposed to high currency risk from US dollar, British Pound
and Chinese Renminbi.
BMW develops “greener” automobiles like hybrid cars. Technological
environment BMW uses technology to gain competitive advantage in
the production of engines, hence winning many glorious engineering
awards in the industry.
BMW to explore a new production direction by incorporating “green”
technology into its business strategy. • BMW will continue its
emphasis on developing new clean technologies for constant
innovation and enhancement of its products.
Environmental
BMW observed the changing trend of customers’ preferences and
support for “green” products, and therefore responded by increasing
its focus on manufacturing more fuel-efficient automobiles. Table 1
BMW PESTEL analysis (Hwee, 2015) According to PESTEL
analysis, which describes a framework of macro-environmental
factors used to analysis the impact on BMW group that should be
aware from new regulations and tax policies, which are crucial
political factor; from economic factors, which they have the most
direct effect on BMW profitability; from technological and
environmental, since new technologies will contribute to sustainable
solutions for “greener” products. These factors have both negative and
positive impact on BMW group, although the group should know how
to deal with the negative effects and to make it positive for the
company.
Porter’s Five Forces
To know what choice BMW should choose, to assess its attractiveness
and to have an effective strategic decision making, we should refer to
porter’s five forces framework. According to porter’s five forces
analysis, the strong brand identity and R&D experience of BMW will
help it to remain competitive in the future. And since the luxury
automotive industry is assessed to become more competitive in the
future, it puts BMW under pressure to continually improve its
competitive advantage to stay ahead from the competition. The threat
of new entrants and substitutes may both reach a moderate level in the
future as they may be new entrants and innovations in the industry;
and if they can successfully establish in the industry. So BMW should
expect to lose market share.
SWOT Analysis Matrix
To understand the current situation of BMW group, we should take a
look on its SWOT analysis, which refers to: SW (internal factors) and
OT (external factors). Strengths? Strong brand image. ? Niche product
(MINI, Roll-Royce…)? Qualified employees. Strong relationships
with suppliers. ? Strong R&D capabilities.
Weaknesses
Small brand portfolio.
Low cost products of its competitors.
High cost structure.
Opportunities
Used of advanced technology.
Poised to benefit from the growing demand for cars in BRIC
countries. Incising demand for hybrid electric cars (green technology)
Flexibility in development and manufacturing.
Low interest rates.
Benefit from strong brand image, niche product and high quality
suppliers to increase demand for cars in BRIC countries.
Ability to respond for “green technology”, because of the strong R&D
capabilities and the qualified employees.
Benefit from low interest rates to decrease the cost structure, so that it
will have ow cost products. |
The usage of advanced technology and the flexibility in development
help to improve the brand portfolio.
Threats
Strong completion in the luxury segment of cars.
Increase in fuel cost.
Environment protection regulations.
Strong brand image can help to have a high brand loyalty, which is
important to cut-off the competition.
Respond for “green technology” will protect the environment and
follow the regulations.
Benefit from strong relationships with suppliers to settle down the
potential rise from fuel costs.
Reducing cost structure in order to combat raw material cost rising.
Make cheap cars to make more profits than competitors, so that it can
increase the competitive advantage.
BMW is in a positive situation more than negative, and since the
conditions of the market are not just changing slowly it has to focus
correctly and change according to market conditions.
BMW is in a positive situation more than negative, and since the
conditions of the market are not just changing slowly it has to
focus correctly and change according to market conditions.
The SWOT analysis used to highlights where the company need to
change. We can see that the best opportunity for BMW is the
opportunity of exploring their “green” image further; the company has
earned a reputation for its performance of active safety and passive
safety include Fully Integrated Road Safety Technology, since it
attaches great importance to the safety and environmental issues. So
the need for reaction on the exploration of opportunities must be
evaluated as high. (Chambers, n.d. ) EvaluationBMW found that some
situations will be more understood after problems happened, and to
meet the European or other country’s needs, BMW should comply
with several requirements ( reliability, safety, quality and advanced
technology), so that people will consider it as an excellent car. Global
branding and localized marketing strategy will help BMW group to
meet customers’ needs when it will use modern ways to rebuild its
international positioning, so that it could find the best strategic
direction principles. Moreover, this strategy will help the group in
raising its competitive advantage and improving its strategic
positioning of the brand. The market research that BMW group have
done, results with solid foundation for the relationships between the
brand and products, brand and communication as well as products and
environment, and these relationships will help in solving market
problems. Based on these results a new brand strategy of BMW is
built (Formation and implementation). BMW knows deeply that it
should focus on the customer rather than the vehicles. So, according to
the blueprint of enterprise strategy, the core target market of the
BMW’s brand can be determined, where the scale and characteristics
of the different types of customers will be mastered by BMW group.
(ukessays, 2016)
Furthermore, the advertising strategy is a smart step from BMW by
doing advertising campaigns. Even though, competitors are big in the
North American Market (like Mercedes-Benz), so that BMW must
take the market share from these competitors. But according to survey
results (which has done by Ammirati Puris Lintas advertising
company) shows that there is no favorable impression for the brand of
BMW, since their cars have advanced requirements. So that’s why the
advertising strategy did not help BMW to attract the attention of
people by its interior design. For that reason it refers to a tagline that
help the advertising theme and positioning to achieve a great success
by attracting the new generation after highlighting the differences and
the advantages of the BMW group.
Recommendations
According to PESTEL, porter’s five forces and SWOT analysis, I
found that BMW is in a good situation, but even though it have some
points that needs to work on it, so that it can be an excellent car with
all requirements that a customer need. BMW employees are an
important resources for the company, they are a key factor for future
success to ensure future competitiveness. For that it should organize
various activities and trainings to boost employees’ confidence, which
strongly affects their work capacity, quality and production efficiency.
Since it have strong R&D capabilities, it can achieve higher quality of
vehicles, with unique customization and provided by the latest
technological features, so that its reliability will increase. (Hwee,
2015)By following the marketing strategies, BMW will be able to
share assets across geographical locations. So the production will
decrease; where cost drivers help the company to stay profitable while
serving the niche target market. And to cover the cost of these
investments slowly, R&D and production improvement will be
implemented across region by region. In terms of strategic flexible
planning and outstanding technological edge, help BMW to stay ahead
from its competitors. So it’s good for BMW to put more efforts in the
US: a steady market and lower production cost, since it has more
manufacturing facilities located in the US that will help reduce
additional shipping costs thus driving more profit. The company can
than focus on a new type of distribution or even a location of a facility
within the Asian market borders. (Chambers, n. d. ) Based on my
research, I found that BMW to maintain its prestige brand identity and
communication with customers, it needs to continue focusing on its
differentiation strategy. It can understand customer behavior and
invest in market research. So it’s also good for the group to attempt to
attract new consumers to the brand by creating a larger brand
portfolio, since a small brand portfolio has considered as a weakness
for it. Moreover, through new types of partnerships and
collaborations, BMW should continue to develop its business model;
which include: share technology through cyber security and
communication, and innovations for producing small engines based on
low emission technologies. Attract new highly qualified talents to the
company it is another strategy that help in transferring knowledge and
continue innovating vehicles and new production methods.
(Chambers, n. d.) (Hwee, 2015) (ukessays, 2016) (Fleischmann &
Sonja Ferber, 2006)
PESTEL Analysis
To study and to understand a market, we should use PESTEL analysis.
So let’s take a look on the PESTEL analysis for BMW:
Political Environment
BMW reacted by producing automobiles of at least 85% recyclable
and up to 95% recoverable. The taxes and government policies are
crucial to BMW’s success of automobile demand in the global market.
Economic environment
BMW is exposed to high currency risk from US dollar, British Pound
and Chinese Renminbi.
BMW develops “greener” automobiles like hybrid cars. Technological
environment BMW uses technology to gain competitive advantage in
the production of engines, hence winning many glorious engineering
awards in the industry.
BMW to explore a new production direction by incorporating “green”
technology into its business strategy. • BMW will continue its
emphasis on developing new clean technologies for constant
innovation and enhancement of its products.
Environmental
BMW observed the changing trend of customers’ preferences and
support for “green” products, and therefore responded by increasing
its focus on manufacturing more fuel-efficient automobiles. Table 1
BMW PESTEL analysis (Hwee, 2015) According to PESTEL
analysis, which describes a framework of macro-environmental
factors used to analysis the impact on BMW group that should be
aware from new regulations and tax policies, which are crucial
political factor; from economic factors, which they have the most
direct effect on BMW profitability; from technological and
environmental, since new technologies will contribute to sustainable
solutions for “greener” products. These factors have both negative and
positive impact on BMW group, although the group should know how
to deal with the negative effects and to make it positive for the
company.
Porter’s Five Forces
To know what choice BMW should choose, to assess its attractiveness
and to have an effective strategic decision making, we should refer to
porter’s five forces framework. According to porter’s five forces
analysis, the strong brand identity and R&D experience of BMW will
help it to remain competitive in the future. And since the luxury
automotive industry is assessed to become more competitive in the
future, it puts BMW under pressure to continually improve its
competitive advantage to stay ahead from the competition. The threat
of new entrants and substitutes may both reach a moderate level in the
future as they may be new entrants and innovations in the industry;
and if they can successfully establish in the industry. So BMW should
expect to lose market share.
SWOT Analysis Matrix
To understand the current situation of BMW group, we should take a
look on its SWOT analysis, which refers to: SW (internal factors) and
OT (external factors). Strengths? Strong brand image. ? Niche product
(MINI, Roll-Royce…)? Qualified employees. Strong relationships
with suppliers. ? Strong R&D capabilities.
Weaknesses
Small brand portfolio.
Low cost products of its competitors.
High cost structure.
Opportunities
Used of advanced technology.
Poised to benefit from the growing demand for cars in BRIC
countries. Incising demand for hybrid electric cars (green technology)
Flexibility in development and manufacturing.
Low interest rates.
Benefit from strong brand image, niche product and high quality
suppliers to increase demand for cars in BRIC countries.
Ability to respond for “green technology”, because of the strong R&D
capabilities and the qualified employees.
Benefit from low interest rates to decrease the cost structure, so that it
will have ow cost products. |
The usage of advanced technology and the flexibility in development
help to improve the brand portfolio.
Threats
Strong completion in the luxury segment of cars.
Increase in fuel cost.
Environment protection regulations.
Strong brand image can help to have a high brand loyalty, which is
important to cut-off the competition.
Respond for “green technology” will protect the environment and
follow the regulations.
Benefit from strong relationships with suppliers to settle down the
potential rise from fuel costs.
Reducing cost structure in order to combat raw material cost rising.
Make cheap cars to make more profits than competitors, so that it can
increase the competitive advantage.
BMW is in a positive situation more than negative, and since the
conditions of the market are not just changing slowly it has to focus
correctly and change according to market conditions.
BMW is in a positive situation more than negative, and since the
conditions of the market are not just changing slowly it has to
focus correctly and change according to market conditions.
The SWOT analysis used to highlights where the company need to
change. We can see that the best opportunity for BMW is the
opportunity of exploring their “green” image further; the company has
earned a reputation for its performance of active safety and passive
safety include Fully Integrated Road Safety Technology, since it
attaches great importance to the safety and environmental issues. So
the need for reaction on the exploration of opportunities must be
evaluated as high. (Chambers, n.d. ) EvaluationBMW found that some
situations will be more understood after problems happened, and to
meet the European or other country’s needs, BMW should comply
with several requirements ( reliability, safety, quality and advanced
technology), so that people will consider it as an excellent car. Global
branding and localized marketing strategy will help BMW group to
meet customers’ needs when it will use modern ways to rebuild its
international positioning, so that it could find the best strategic
direction principles. Moreover, this strategy will help the group in
raising its competitive advantage and improving its strategic
positioning of the brand. The market research that BMW group have
done, results with solid foundation for the relationships between the
brand and products, brand and communication as well as products and
environment, and these relationships will help in solving market
problems. Based on these results a new brand strategy of BMW is
built (Formation and implementation). BMW knows deeply that it
should focus on the customer rather than the vehicles. So, according to
the blueprint of enterprise strategy, the core target market of the
BMW’s brand can be determined, where the scale and characteristics
of the different types of customers will be mastered by BMW group.
(ukessays, 2016)
Furthermore, the advertising strategy is a smart step from BMW by
doing advertising campaigns. Even though, competitors are big in the
North American Market (like Mercedes-Benz), so that BMW must
take the market share from these competitors. But according to survey
results (which has done by Ammirati Puris Lintas advertising
company) shows that there is no favorable impression for the brand of
BMW, since their cars have advanced requirements. So that’s why the
advertising strategy did not help BMW to attract the attention of
people by its interior design. For that reason it refers to a tagline that
help the advertising theme and positioning to achieve a great success
by attracting the new generation after highlighting the differences and
the advantages of the BMW group.
Recommendations
According to PESTEL, porter’s five forces and SWOT analysis, I
found that BMW is in a good situation, but even though it have some
points that needs to work on it, so that it can be an excellent car with
all requirements that a customer need. BMW employees are an
important resources for the company, they are a key factor for future
success to ensure future competitiveness. For that it should organize
various activities and trainings to boost employees’ confidence, which
strongly affects their work capacity, quality and production efficiency.
Since it have strong R&D capabilities, it can achieve higher quality of
vehicles, with unique customization and provided by the latest
technological features, so that its reliability will increase. (Hwee,
2015)By following the marketing strategies, BMW will be able to
share assets across geographical locations. So the production will
decrease; where cost drivers help the company to stay profitable while
serving the niche target market. And to cover the cost of these
investments slowly, R&D and production improvement will be
implemented across region by region. In terms of strategic flexible
planning and outstanding technological edge, help BMW to stay ahead
from its competitors. So it’s good for BMW to put more efforts in the
US: a steady market and lower production cost, since it has more
manufacturing facilities located in the US that will help reduce
additional shipping costs thus driving more profit. The company can
than focus on a new type of distribution or even a location of a facility
within the Asian market borders. (Chambers, n. d. ) Based on my
research, I found that BMW to maintain its prestige brand identity and
communication with customers, it needs to continue focusing on its
differentiation strategy. It can understand customer behavior and
invest in market research. So it’s also good for the group to attempt to
attract new consumers to the brand by creating a larger brand
portfolio, since a small brand portfolio has considered as a weakness
for it. Moreover, through new types of partnerships and
collaborations, BMW should continue to develop its business model;
which include: share technology through cyber security and
communication, and innovations for producing small engines based on
low emission technologies. Attract new highly qualified talents to the
company it is another strategy that help in transferring knowledge and
continue innovating vehicles and new production methods.
(Chambers, n. d.) (Hwee, 2015) (ukessays, 2016) (Fleischmann &
Sonja Ferber, 2006)
PESTEL Analysis
To study and to understand a market, we should use PESTEL analysis.
So let’s take a look on the PESTEL analysis for BMW:
Political Environment
BMW reacted by producing automobiles of at least 85% recyclable
and up to 95% recoverable. The taxes and government policies are
crucial to BMW’s success of automobile demand in the global market.
Economic environment
BMW is exposed to high currency risk from US dollar, British Pound
and Chinese Renminbi.
BMW develops “greener” automobiles like hybrid cars. Technological
environment BMW uses technology to gain competitive advantage in
the production of engines, hence winning many glorious engineering
awards in the industry.
BMW to explore a new production direction by incorporating “green”
technology into its business strategy. • BMW will continue its
emphasis on developing new clean technologies for constant
innovation and enhancement of its products.
Environmental
BMW observed the changing trend of customers’ preferences and
support for “green” products, and therefore responded by increasing
its focus on manufacturing more fuel-efficient automobiles. Table 1
BMW PESTEL analysis (Hwee, 2015) According to PESTEL
analysis, which describes a framework of macro-environmental
factors used to analysis the impact on BMW group that should be
aware from new regulations and tax policies, which are crucial
political factor; from economic factors, which they have the most
direct effect on BMW profitability; from technological and
environmental, since new technologies will contribute to sustainable
solutions for “greener” products. These factors have both negative and
positive impact on BMW group, although the group should know how
to deal with the negative effects and to make it positive for the
company.
Porter’s Five Forces
To know what choice BMW should choose, to assess its attractiveness
and to have an effective strategic decision making, we should refer to
porter’s five forces framework. According to porter’s five forces
analysis, the strong brand identity and R&D experience of BMW will
help it to remain competitive in the future. And since the luxury
automotive industry is assessed to become more competitive in the
future, it puts BMW under pressure to continually improve its
competitive advantage to stay ahead from the competition. The threat
of new entrants and substitutes may both reach a moderate level in the
future as they may be new entrants and innovations in the industry;
and if they can successfully establish in the industry. So BMW should
expect to lose market share.
SWOT Analysis Matrix
To understand the current situation of BMW group, we should take a
look on its SWOT analysis, which refers to: SW (internal factors) and
OT (external factors). Strengths? Strong brand image. ? Niche product
(MINI, Roll-Royce…)? Qualified employees. Strong relationships
with suppliers. ? Strong R&D capabilities.
Weaknesses
Small brand portfolio.
Low cost products of its competitors.
High cost structure.
Opportunities
Used of advanced technology.
Poised to benefit from the growing demand for cars in BRIC
countries. Incising demand for hybrid electric cars (green technology)
Flexibility in development and manufacturing.
Low interest rates.
Benefit from strong brand image, niche product and high quality
suppliers to increase demand for cars in BRIC countries.
Ability to respond for “green technology”, because of the strong R&D
capabilities and the qualified employees.
Benefit from low interest rates to decrease the cost structure, so that it
will have ow cost products. |
The usage of advanced technology and the flexibility in development
help to improve the brand portfolio.
Threats
Strong completion in the luxury segment of cars.
Increase in fuel cost.
Environment protection regulations.
Strong brand image can help to have a high brand loyalty, which is
important to cut-off the competition.
Respond for “green technology” will protect the environment and
follow the regulations.
Benefit from strong relationships with suppliers to settle down the
potential rise from fuel costs.
Reducing cost structure in order to combat raw material cost rising.
Make cheap cars to make more profits than competitors, so that it can
increase the competitive advantage.
BMW is in a positive situation more than negative, and since the
conditions of the market are not just changing slowly it has to focus
correctly and change according to market conditions.
BMW is in a positive situation more than negative, and since the
conditions of the market are not just changing slowly it has to
focus correctly and change according to market conditions.
The SWOT analysis used to highlights where the company need to
change. We can see that the best opportunity for BMW is the
opportunity of exploring their “green” image further; the company has
earned a reputation for its performance of active safety and passive
safety include Fully Integrated Road Safety Technology, since it
attaches great importance to the safety and environmental issues. So
the need for reaction on the exploration of opportunities must be
evaluated as high. (Chambers, n.d. ) EvaluationBMW found that some
situations will be more understood after problems happened, and to
meet the European or other country’s needs, BMW should comply
with several requirements ( reliability, safety, quality and advanced
technology), so that people will consider it as an excellent car. Global
branding and localized marketing strategy will help BMW group to
meet customers’ needs when it will use modern ways to rebuild its
international positioning, so that it could find the best strategic
direction principles. Moreover, this strategy will help the group in
raising its competitive advantage and improving its strategic
positioning of the brand. The market research that BMW group have
done, results with solid foundation for the relationships between the
brand and products, brand and communication as well as products and
environment, and these relationships will help in solving market
problems. Based on these results a new brand strategy of BMW is
built (Formation and implementation). BMW knows deeply that it
should focus on the customer rather than the vehicles. So, according to
the blueprint of enterprise strategy, the core target market of the
BMW’s brand can be determined, where the scale and characteristics
of the different types of customers will be mastered by BMW group.
(ukessays, 2016)
Furthermore, the advertising strategy is a smart step from BMW by
doing advertising campaigns. Even though, competitors are big in the
North American Market (like Mercedes-Benz), so that BMW must
take the market share from these competitors. But according to survey
results (which has done by Ammirati Puris Lintas advertising
company) shows that there is no favorable impression for the brand of
BMW, since their cars have advanced requirements. So that’s why the
advertising strategy did not help BMW to attract the attention of
people by its interior design. For that reason it refers to a tagline that
help the advertising theme and positioning to achieve a great success
by attracting the new generation after highlighting the differences and
the advantages of the BMW group.
Recommendations
According to PESTEL, porter’s five forces and SWOT analysis, I
found that BMW is in a good situation, but even though it have some
points that needs to work on it, so that it can be an excellent car with
all requirements that a customer need. BMW employees are an
important resources for the company, they are a key factor for future
success to ensure future competitiveness. For that it should organize
various activities and trainings to boost employees’ confidence, which
strongly affects their work capacity, quality and production efficiency.
Since it have strong R&D capabilities, it can achieve higher quality of
vehicles, with unique customization and provided by the latest
technological features, so that its reliability will increase. (Hwee,
2015)By following the marketing strategies, BMW will be able to
share assets across geographical locations. So the production will
decrease; where cost drivers help the company to stay profitable while
serving the niche target market. And to cover the cost of these
investments slowly, R&D and production improvement will be
implemented across region by region. In terms of strategic flexible
planning and outstanding technological edge, help BMW to stay ahead
from its competitors. So it’s good for BMW to put more efforts in the
US: a steady market and lower production cost, since it has more
manufacturing facilities located in the US that will help reduce
additional shipping costs thus driving more profit. The company can
than focus on a new type of distribution or even a location of a facility
within the Asian market borders. (Chambers, n. d. ) Based on my
research, I found that BMW to maintain its prestige brand identity and
communication with customers, it needs to continue focusing on its
differentiation strategy. It can understand customer behavior and
invest in market research. So it’s also good for the group to attempt to
attract new consumers to the brand by creating a larger brand
portfolio, since a small brand portfolio has considered as a weakness
for it. Moreover, through new types of partnerships and
collaborations, BMW should continue to develop its business model;
which include: share technology through cyber security and
communication, and innovations for producing small engines based on
low emission technologies. Attract new highly qualified talents to the
company it is another strategy that help in transferring knowledge and
continue innovating vehicles and new production methods.
(Chambers, n. d.) (Hwee, 2015) (ukessays, 2016) (Fleischmann &
Sonja Ferber, 2006)
References
1. Chambers, R. , n. d. BMW Strategic Management Analysis, s. l. :
s. n. Fleischmann, B. & Sonja Ferber, P. H. , 2006. Strategic
Planning of BMW’s Global Production Network. Interfaces,
36(3), p. 194–208.
2. Hwee, E. Q. C. , 2015. Building & Sustaining Strategy:
Bayerische Motoren Werke (BMW) – Automotive industry.
TMC Academic Journal,, 10(1), pp. 29-46. papamargariti, A. ,
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com/nmgot9yzjpzy/business-strategy-of-bmw-group/ [ Accessed
29 octobre 2014].
3. Pløen, R. R. , 2010. Valuation of BMW- - Financial & Strategic
Analysis, Århus: Department of Business Studies. Rodrigo,
2012. the write pass journal. [Online] Available at:
https://writepass. com/journal/2012/11/strategic-analysis-pestel-
porter-and-swot-of-bmw/[Accessed 17 novembre 2012].
4. Ukessays, 2016. The Global Business Strategy Of Bmw Group.
[Online] Available at: https://www. ukessays.
com/essays/marketing/the-global-business-strategy-of-bmw-
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