* SBUs (Strategic Business Unit)
“The Munich-based company manufactures vehicles under several brand names, including BMW, Mini and Rolls Royce motor cars as well as, BMW motorcycles”. * PESTEL
“German VAT increases from 16 to 19%. Additionally, reforms put further burdens (e.g. increased health service contributions) on customers. This may reduce demand and could have an effect on the automobile industry. Political climate in Europe had a huge impact toward BMW who has to expand more production in the US and China”. “In late 2006, the European Commission announced that it would regulate the level of carbon dioxide (CO2) emissions from automobiles sold in the European Union (EU). Automakers are powerful actors who face considerable competitive pressures. German automakers were vehemently opposed to the EU’s proposed emissions targets. German automakers (BMW, Mercedes, and Volkswagen) tend to focus on producing larger, more powerful luxury cars. BMW’s fleet average was 184 g/km”. * Economic
“In particular, challenges arise from the co-occurrence of adverse currency factors (especially for BMW the weak dollar) and above-average raw material prices. Also, the increased petrol prices lead to a reduced car demand. The global economy experienced a sharp downturn in 2001 which lasted well into 2003, and this affected the motor demand. The equity prices had fallen until late in 2003, coupled with geopolitical tension and concern about oil supplies, added to the uncertainty about economic and political environments. This fuelled the decline in motor sale. In 2008 the economy of the developed countries as well as from the emerging markets experienced a dramatically decrease in growth. The automotive industry lost a huge part of its usual profits. These changes lead to a change in demand; costumers are not ready and not able to pay former prices for the cars. Some competitors of BMW decrease their price level already”. * Social
“The sharp rise in the teen-age percentage of total population experienced in recent years has been an important factor in the growing proportion of families who are multiple-car owners. This percentage has now almost reached its peak and is no longer making a strong contribution to the growth in multiple-car ownership. On the other hand, the proportion of married women who are employed will doubtless continue to rise for some time and will continue to exert an upward influence on the multiple-car component of total automobile demand”.
“In the automobile industry, companies are forced to invest huge sums into R&D measures to foster technological development and be cutting-edge. Currently, the focus lies in the fields of security and alternative energies, e.g. hydrogen, electricity. Technology has become a solution for prestige vehicles and automobile manufacturers employ the use of technology by adding gadgets into their motors. For example, add iDrive in its BMW 7-series. Advance technology is used by BMW to increase engineering.” * Environmental
“DuPont and the Society of Automotive Engineers sponsor survey that highlights environmental issues as the top challenges facing the automotive industry Fifty-four percent of respondents say that fuel efficient vehicles with reduced environmental impact are important to consumers. Forty one percent say enhanced safety and 37 percent say improved comfort and convenience are important to consumers. For the fifth consecutive year, alternatively powered vehicles are predicted to have the greatest impact on the industry. Sixty percent selected alternatively powered vehicles in 2008, while 15 percent selected safety features and 16 percent selected electrical/electronic advances”. * Legal
“Since the mid 1980's the EU commission has recognized the unique nature of the car distribution system and granted a Block Exemption in competition...
References: W, M, Pride. O, C, Ferrell (2007) ‘Foundations of Marketing’ 2nd edn Houghton Mifflin. P. 121
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