This paper explores the strategies and environmental influences (both Internal and External) of a German car giant BMW, Bayerische Motoren Werke, which has established itself in the niche luxury car market. It has Headquarter in Munich, Germany, with presence all over the world. The luxury car includes both traditional luxury cars and functional luxury cars. BMW is one of the most successful car companies in Europe and worldwide. Despite experiencing the overall sales slump particularly in the German and the Western European Markets, the Group has been able to improve its market share and even increased deliveries to their customers in the vehicle, as well as in the motorcycle sector. The company has built brand equity over the years through the continuous branding efforts for high quality products. Direct competitors of BMW are luxury car manufacturers from Japan, the U.S., and other European Union countries. Globally, BMW’s biggest U.S. competitors are Ford, Cadillac, Lincoln, Buick, and Chrysler. And Japanese competitors include Lexus, Honda, and Toyota. BMW competes locally (in Germany) and globally with other EU companies such as Mercedes Benz, Audi and Jaguar.
No two organizations in the world could be alike so the environmental influences of BMW could be described through;
1. Internal Environment
2. External Environment
The macro-environment or external environment of the organization is further broken down into;
A. Immediate Environment
B. General or Task Environment.
The above phenomena of environmental factors are described by the PESTEL analysis, which helps to analyse external environment i.e. General Environment. Figure 1 shows the Organization, Internal Environment and its factors.
Figure 2 represents two further outer circles, which is Immediate Environment and General/Task Environment.
Bernhardt, Kenneth L., Cases in Marketing Management, 6th Edition, Richard D. Irwin, 1994, 754 pages (coauthored with Thomas C. Kinnear).
PESTEL is an acronym for Political, Economic, Social, Technological, Legal and Environmental factors. As no business could exist and operate in a vacuum, rather as a part and parcel of the environment in which it finds itself. The PESTLE Analysis is used as a generic 'orientation' tool to find out about an organization or product the effect of external environment forces on an organization’s internal environment forces. It has been originally designed as a business environmental scan, the PEST or PESTLE analysis is an analysis of the external macro environment (big picture) in which a business operates. These factors are beyond the control or influence of a business, however the business needs to be aware of when developing product development, business or strategy planning.
Therefore it is vital to take into account PESTLE factors for the following main reasons: • By making effective use of PESTLE analysis, the business has to ensure that what the business is doing is aligned positively with the powerful forces of change that are affecting our working environment. Effective Change Management enables business to take advantage of inevitable change rather than to oppose it.
• Effective use of PESTLE analysis facilitates the business not to take action which could lead to failure for reasons beyond your control
• PESTLE is particularly valuable when starting a new product or service. Use of PESTLE helps breaking free of assumptions, and helps the business to quickly adapt to the realities of the new environment
The factors that affect the BMW car industry are:
• Government, foreign policies and taxes are very critical for the automobile industry. The government policies help us to decide the chances of success in the global market. • Implementation of new schemes in the US and Europe automobile industry wherein regulations were led to...