Bmw Case Study Analysis

Topics: BMW, Luxury vehicle, Mercedes-Benz Pages: 5 (1389 words) Published: September 28, 2011
BMW Group's Worldwide Mission Statement
"The mission statement up to the year 2020 is clearly defined: the BMW Group is the world's leading provider of premium products and premium services for individual mobility." BMW is one of the most widely know luxury class car manufacturers in the world. They have great branding strategy and technology but the entrance of Japanese manufacturers in the U.S. auto market creates a problem for BMW. Japanese companies have luxury cars that are lower in price and maintenance and they have the technology to compete with these German vehicles. BMW must take action to compete with the Japanese auto companies by putting great emphasis on quality service at a reasonable price to gain the competitive advantage. History of BMW

BMW is a manufacturer of aircraft engines, motorcycles and automobiles based in Munich, Germany. They are the leading auto exporter in Europe. BMW designed their first aircraft engine in 1917. In 1923, they developed their first motorcycle. In 1928, they entered into the automobile business. By the 1930’s, the company began producing touring cars and sports cars. They introduced a new motorcycle to the German market in 1948 after Allied forces dismantled the company’s main factories in 1945.They returned to producing automobiles in the 1950’s but sales were poor. They began competing with Mercedes Benz in the luxury car markets in the U.S. and Europe in the 1960’s by producing sports sedans and compact touring cars. BMW’s sales climbed in the 1980’s in the U.S. but then dropped due to competition from Toyota’s Lexus and Nissan’s Infinity. In 1992, BMW outsold Mercedes for the first time in Europe after the collapse of the Berlin Wall led to a boom in Europe’s car sales. In 1990, BMW began producing aircraft engines for business jets through a joint venture with Rolls-Royce. In 1992, they built their first automobile plant in the United States in Spartanburg, S.C. In 1994, they acquired 80% of a British manufacturer of small and luxury cars as well as the Land Rover SUV called the Rover Group. This acquisition brought BMW into new markets. SWOT Analysis

1. BMW’s brand is known throughout the world and their reputation for quality and reliability is undeniable. 2. BMW’s engineering history has been known for over 90 years as a producer of aircraft engines, motorcycles, and automobiles. 3. Factories in Germany are considered the most productive, their suppliers are the best in the industry, and their workforce is comprised of the most talented. 4. Building a customized BMW on their website and being able to go to the dealership and pick it up just as you want it is huge. 5. The ability to share components amongst similar-sized automobiles is a way that they are able to keep costs down. The 5 and 6 series are able to share components as well as the 1 and 3 series. Weaknesses:

1. High manufacturing costs makes product development costly and purchasing costs are higher because they must use the best parts available to produce high quality products. 2. The credit crisis in the U.S. has caused the BMW brand sales to go down 9.6% this year and sales are not expected to increase this year ending 16 consecutive years of growth. 3. Substituting quality for savings will make BMW a higher profit but sacrificing something that you have built your reputation on is definitely a weakness. Opportunities:

1. Customers demand change to more comfortable and less expensive cars. 2. Diversification.
3. Adding new technology to existing line.
1. Economic recession. Consumers are less likely to spend money on a luxury vehicle in a bad economy. 2. New and existing competition. Audi, Cadillac, Lexus and Mercedes are building new cars and continue to improve existing models. 3. Outsourcing development and production could lead to limited control of the final product which in turn could lose customer’s confidence in the product that they are purchasing....
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