BMW

Topics: Strategic management, Automotive industry, BMW Pages: 14 (2854 words) Published: April 27, 2015

Strategic Analysis of BMW AG

1.1 Evaluation of strategic factors affecting BMW strategy
To understand factors that influence on the competitiveness of BMW the SWOT analysis is applicable.

Strength
Weakness
• Strong Brand Reputation
• High cost policy
• Trained and highly skilled workforce
• Inefficient brand portfolio
• High quality products
• High product prices
• Corporate Social Responsibility
• Inefficient level of acquisition and
• Contribution to the environment
strategic partnerships
Opportunities
Threats
• "Green Vehicles"
• Severe competition
• Growing fuel prices
• Increasing raw materials prices
• Enrich business portfolio
• Dropping fuel prices
• Regulations concerning level of emissions
• Increasing exchange rate of euro

Analysis of controllable factors

Strengths
Strong Brand Reputation can be considered as the main strengths of BMW. Through many years marketing executive has been grown the brand image, so now BMW is perceived as the third most expensive brand in automotive market and is valued at $29 billion. Trained and highly skilled workforce is the asset in which BMW invests heavily. For, assembly of quality cars demands for quality materials and extremely skilled workforce. Therefore, BMW cars are manufactured only in the areas where the most skilled car manufacturers work like Germany and USA. High quality product is the strength for which people valued BMW. The level of recalled cars produced by BMW much more less comparing to its rivals. CSR activities of BMW are really impressive. The care manufacturing company provides large investments in various CRS programs, like sustainability requirements for its suppliers, health management of employees, balanced work life and zero waste at its plants. Contribution to the environmentis one of the main goals of the company, for, about 20 car models assembled by BMW emit carbon dioxide as low as 140g/km. Moreover, BMW engineers create new kinds of fuels, for instance, hydrogen (Jurevicius, 2013).

Weaknesses
High cost policy is the reflection of the cost associated with production and employees retention. Therefore, the oust structure of BMW cars is much higher comparing to Toyota, GM, and Volkswagen. Inefficient brand portfolio might probably have negative implication on the future growth prospects. The portfolio of BMW is limited to BMW, MINI and Rollce-Royce.Besides, these three brand demotions perform well in their segments, bul inefficient portfolio may increase the level of business vulnerability to possible economic crises.

High product prices driven by BMW targeted segment. As company produces luxury cars it spends a lot on the materials, expert workforce and on the brand image to Consequently, these expenditures increase automobile prices which are extremely high in comparison with competitors. Inefficient level of acquisition and strategic partnerships may result in delayed growth, for only 10% of the BMW growth is associated with accusation the rest 90% are organic one. Therefore, if automobile concern wants to grow, then there must be more acquisitions and strategic partnerships (Dudovskiy, 2014).

Analysis of uncontrollable factors

Opportunities
"Green Vehicles" demand may grow in the future. The preferences of people have been shifted to more environmentally friendly products; therefore, consumers will be more likely to acquire hydrogen fueled or hybrid cars as they emit less pollution. Growing fuel prices will force customers te look for cheaper ваЬвёШе&, it creates a new market of hybrid and hydrogen fueled cars assembled by BMW Enrichment of business portfolio is the next strategic step for BMW. Thus, company will get opportunity to introduce more models Regulations concerning level of emission could positively influence on the BMW's position in the industry. For, other car manufacturers will have to invest in R&D programs while BMW will...
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