Table of Content Page Nos.
2.1.1 PESTEL Analysis (Macro-environment)3
2.1.2 Porter 5 Forces (Micro-environment)5
2.2.2 Core Competences7
2.2.3 Value Chain8
2.3.1 Stakeholder map9
3.0 SWOT Analysis10
Analysis of Team’s Experience12
TO: The Board of Directors
FROM: GGSB Consultancy
DATE: 29th of February 2012
SUBJECT: BMW Business Strategy
In this report we will analyse BMW Group and the business strategies they used in order to gain competitive advantage and powerful presence in the market. We will discuss the impact of key factors that affected the company’s automobile industry by using appropriate strategy frameworks and SFA analysis. BMW Group is one of the leading car manufacturers worldwide, including other operations such as motorcycles, software products and financial services. BMW Group’s new business strategy is to strengthen its position within the global automobile industry market by increasing sales to more than two million automobiles per year. To achieve this objective the company will invest in new technologies and automobile concepts whilst developing new areas of activities. The new strategy will help BMW Group create new opportunities and become more efficient thus take a lead over competitors and increase their future success (www.bmweducation.co.uk). We will use SFA analysis to evaluate the strategic development and to analyse the suitability, feasibility and acceptability of the BMW Group strategy. 2.0 SFA Analysis
2.1.1 PESTEL Analysis (Macro-environment)
Political factors- The European political climate affected the company’s strategy to expand its sales and launch new models every three months up until 2005. The company had to expand to Asian and US markets, where they found a wider range of buyers and lower labour costs. BMW had to adhere to EU laws concerning carbon emissions produced, by investing in “greener technologies” Economic factors - The global economy has experienced a significant downturn; equity prices had fallen and sales in the automobile market declined. European companies also suffered from low demand and oversupply thus falling into serious crisis and loss of revenues. In 2003 BMW turnover decreased 2.1 per cent over 2002 due to the strength of the Euro over the US Dollar. Gross margins were down by 2.8 per cent due to growing expenditures in product and market development. Increasing prices of oil and raw materials was also a huge factor affecting the costs thus sales of BMW. Road taxes increased, which Governments imposed in order to reduce cars’ emissions. Consequently, larger cars are now more expensive, because they pollute more, hence having an effect on their sales. (http://www.oup.com/uk) Social factors- BMW Group must take into account the cultural differences, customer’s preferences, values, income, and other social aspects to be successful in all markets. Managers have to conduct market research about customers’ preferences and expectations for BMW’s future products. Considering cultural and social differences BMW positions and prices differently its automobiles accordingly to the market. The company has established strong relationships with its customers and after-sale services, which is a significant advantage for the improvement of future activities. Each country has different cultural aspects thus it is important to consider each one and the ways in which it could affect their strategy (http://www.oup.com/uk) Technological factors – An essential element for BMW’s success is the constant technological innovation and highly qualified work force. To increase its sales through innovating new models, BMW had to invest...