SWOT analysis of BMW

Jurevicius of Strategic Management Insig t

Written on 18 Feb 2013 by Ovidijus

http://www.strategicmanagementinsight.com/swot-analyses/bmw-swot-analysis.html This is the Bayerische Motoren Werke (BMW) AG W!T analysis "or #$%&. 'or more in"ormation on how to (o W!T analysis please re"er to o)r article.

Company background
*ame Bayerische Motoren Werke AG +n()stries ser,e( A)tomoti,e Geographic Worl(wi(e areas ser,e( -ea(.)arters Germany /)rrent /0! *orbert 1eitho"er 1e,en)e 2 34.565 billion (#$%#) 7ro"it 2 8.%## billion (#$%#) 0mployees %$89534 (#$%#) /hrysler Gro)p ::/9 ;aimler AG9 'or( Motor /o.9 General Motors /ompany9 Main -on(a Motor /ompany9 *issan Motor9 Tata Motors9 :t(.9 Toyota Motor /ompetitors /orporation9 <olkswagen AG an( many other a)tomoti,e companies. BMW is an a)tomobile an( motorcycle man)"act)rer base( in M)nich9 Germany. The company sells BMW9 1olls-1oyce an( Mini cars an( BMW Motorra( an( -)s.,arna motorcycles. +n #$%#9 'orbes anno)nce( BMW as the most rep)table b)siness in the worl(. =o) can "in( more in"ormation abo)t the b)siness in its o""icial website or Wikipe(ia>s article.

SWOT
BMW SWOT analysis 2013
Strengt s %. Bran( rep)tation #. 0n,ironment "rien(ly ,ehicles &. ?)ality pro()cts 6. -ighly skille( work"orce 8. /orporate ocial 1esponsibility (/ 1) 4. trong bran( presence in /hina Weaknesses %. -igh cost str)ct)re #. Weak bran( port"olio &. 7erception o" high prices 6. Too "ew ac.)isitions an( strategic partnerships

Opportunities %. +ncreasing ")el prices #. 7ositi,e attit)(e towar(s @greenA ,ehicles &. 0Bpan( bran( port"olio 6. /hanging c)stomer nee(s

T reats %. +ntense competition #. 1ising raw material prices &. ;ecreasing ")el prices 6. Growing e)ro eBchange rate

Strengt s
%. Brand reputation! BMW bran( is the thir( most ,al)able a)tomoti,e in()stry bran( in the worl( ,al)e( at C#D billion. +n #$%#9 'orbes has also liste( BMW as the most rep)table b)siness in the worl(. #. "n#ironment friendly #e icles! The company tries to (e,elop en,ironment "rien(ly cars by making them more e""icient. +t o""ers nearly #$ mo(els that emit /!# as low as %6$g/km. To make BMW cars more en,ironment "rien(ly "irm>s engineers (e,elop new types o" ")els9 s)ch as hy(rogen9 too. &. $uality products! BMW is ,al)e( on its engineering capabilities9 skille( work"orce an( .)ality pro()cts. BMW recalls their cars less o"ten an( at lower n)mbers than most o" its competitors (o. 6. %ig ly skilled &orkforce! ?)ality cars re.)ire premi)m materials an( skille( work"orce an( BMW employs only the most skille( workers to pro()ce its ,ehicles. BMW sets )p its assembly plants at the co)ntries9 s)ch as E A an( Germany9 where there is only the most skille( ,ehicle assemblers. 8. Corporate Social 'esponsibility (CS')! BMW is strongly committe( to the en,ironment protection9 employee an( comm)nity well-being an( s)stainability programs. The company in,ests large s)ms in employee health management9 programs promoting balance( work li"e9 s)stainability re.)irements "or its s)ppliers an( pro()cing Fero waste at its plants. 4. Strong brand presence in C ina! !,er the last "ew years9 BMW has seen strong sales growth in /hina9 the largest a)tomoti,e market in the worl(. +n #$%#9 BMW sol( &#49666 ,ehicles there.

Weaknesses
%. %ig cost structure! 7ro()cing .)ality cars an( hiring skille( work"orce res)lts in high costs "or the b)siness. BMW cost str)ct)re is higher than o" its biggest competitors s)ch as Toyota9 GM an( <olkswagen. #. Weak brand portfolio! BMW Gro)p man)"act)res an( sells only & bran(s: BMW9 M+*+ an( 1olls-1oyce. Altho)gh these bran(s per"orm well in their segments9 they are )nable

to ser,e larger market nee(s. There"ore9 BMW has to intro()ce more bran(s to its port"olio to meet (i,erse cons)mer nee(s. &. %ig prices! BMW man)"act)res l)B)ry cars that re.)ire best .)ality materials9 skille( work"orce an( a great bran( image. All this res)lts at a higher car prices that are o"ten consi(ere( as too pricey compare( to other car prices. 6. Too fe& ac*uisitions and strategic partners ips! D$G o" BMW growth is organic an( only %$G is "rom ac.)isitions. Witho)t ac.)isitions9 the company "in(s it har( to grow e,en with eBcl)si,e engineering capabilities. Th)s9 i" the company wants to grow signi"icantly9 it has to ac.)ire more bran(s an( enter into more strategic partnerships.

Opportunities
%. +ncreasing fuel prices! +ncreasing ")el prices open )p large markets "or BMW hybri( an( hy(rogen cars as cons)mers shi"t towar(s cheaper ")el types. #. ,ositi#e attitude to&ards -green. #e icles! To(ay cons)mers are more aware o" the negati,e e""ects (air poll)tion) ca)se( by cars ")ele( by petrol an( (iesel. :arge .)antities o" /!# emissions intensi"y greenho)se e""ect an( negati,ely impact the li"e on earth. Th)s9 cons)mers are more likely to b)y new hybri( an( hy(rogen ")ele( cars that emit less or no /!# at all. &. "/pand brand portfolio! +n or(er to grow at a higher rate9 BMW sho)l( eBpan( its bran( port"olio to meet more nee(s an( to satis"y larger cons)mer market. The company co)l( intro()ce new mo(els that aren>t c)rrently incl)(e( in its range. 6. 0e& emission standards! A new wa,e "or stricter reg)lations on ,ehicle emission stan(ar(s wo)l( positi,ely a""ect BMW position in a)tomoti,e in()stry. The "irm pro()ces one the most ecological ,ehicles an( has intro()ce( hy(rogen ")els that emit Fero /!#. *ew ,ehicle emission reg)lations wo)l( mean $ a((itional in,estment "or BMW while its competitors wo)l( ha,e to in,est large s)ms o" money to comply with reg)lations an( lose a share o" pro"its.

T reats
%. +ntense competition! BMW "aces increasing competition "rom its (irect competitors an( now ten(s to compete on price rather than (i""erentiation. Moreo,er9 the markets "or l)B)ry cars are sat)rate( in the (e,elope( economies9 th)s intensi"ying competition. #. 'ising ra& material prices! 1ising prices "or raw metals will li"t the costs "or a)to man)"act)rers an( res)lt in s.)eeFe( pro"its. &. 1ecreasing fuel prices! ;)e to increasing eBtraction o" shale gas9 ")t)re ")el prices sho)l( (rop an( make electric9 hybri( an( hy(rogen cars less attracti,e. This creates h)ge losses "or BMW most ambitio)s proHects9 hy(rogen ")ele( an( electric cars. 6. 2ro&ing euro e/c ange rate! BMW earns part o" its pro"its o)tsi(e the e)ro Fone. 0Bchange rate "l)ct)ations threaten BMW pro"its i" the e)ro will start appreciating against other c)rrencies.

Sources
%. BMW Gro)p (#$%&). +nsights: The /orporation. A,ailable at: http://www.bmw.com/com/en/insights/corporation/o,er,iew.html #. +nterbran( (#$%&). Best Global Bran(s #$%#. A,ailable at: http://www.interbran(.com/en/best-global-bran(s/#$%#/Best-Global-Bran(s-#$%#.aspB &. 1e)ters (#$%&). BMW says /hina gro)p sales s)rge 3& pct in ;ecember. A,ailable at: http://www.re)ters.com/article/#$%&/$%/$5/bmw-china-i(E :80D/5#E1#$%&$%$5 6. BMW Gro)p (#$%&). /orporate ocial 1esponsibility at BMW Gro)p. A,ailable at: http://www.bmwgro)p.com/bmwgro)pIpro(/e/$I$IwwwIbmwgro)pIcom/in,estorIrela tions/ irIser,ices/Ip("/sriIcapitalImarketsI(ay/$#I ocialIresponsibilityIatItheIBMWIGro)p I'e)chtmayr.p(" 8. Wikipe(ia (#$%&). BMW. A,ailable at: http://en.wikipe(ia.org/wiki/BMWJ0n,ironmentalIrecor(