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SWOT analysis of BMW 3 series analyses the brand/company with its strengths,
weaknesses, opportunities & threats. In BMW 3 series SWOT Analysis, the strengths and
weaknesses are the internal factors whereas opportunities and threats are the external
factors.
SWOT Analysis is a proven management framework which enables a brand like BMW 3
series to benchmark its business & performance as compared to the competitors and
industry. As of 2020, BMW 3 series is one of the leading brands in the automobiles
sector.
Detailed SWOT Analysis of BMW 3 series along with Marketing Analysis &
Competition:
The table below lists the SWOT (Strengths, Weaknesses, Opportunities, Threats), top
BMW 3 series competitors and elaborates BMW 3 series market segmentation, target
group, positioning & Unique Selling Proposition (USP).
Table of Contents +
BMW 3 series SWOT, Competitors, Marketing STP & Brand analysis Table
Sector Automobiles
The brandguide table above concludes the BMW 3 series SWOT analysis along with its
marketing and brand parameters.
Political Factors:
The political factors in the BMW PESTLE Analysis can be explained as follows:
BMW is one the leading luxury car manufacturers of the world. There are two major political
factors which have recently affected BMW. Firstly, the escalation of the trade war between
U.S.A. and China. And, secondly, the rising political uncertainty in the Europe largely
because of Britain’s decision of taking an exit from the European Union. Since, higher taxes
were imposed on the goods traded between U.S.A. and China; it weakened the stock markets
and hence causing a decline in the stock prices in the automobile industry. Apart from the
trade tension between the two countries, higher duties were imposed on U.S.A. on the import
of Steel and Aluminum by the European Union. Also, Brexit i.e. Britain’s exit from the EU
can have a negative impact on the company as it will increase trade restrictions causing
increase in the costs and decrease in the volume. Moreover, the increase in trade restriction
by U.S.A. can also cause the other countries to increase their tariffs on the goods traded with
U.S.A. This can cause a decrease in the vehicles exported from the U.S.A. which will affect
BMW negatively.
Image: pixabay
Economic Factors:
Below are the economic factors in the PESTLE Analysis of BMW:
Apart from the European Union, a major chunk BMW’s revenue comes from China and The
United States of Nation. So, any uncertainty prevailing in these countries can adversely affect
BMW. The increased investment done by BMW for the electrification of their drivetrain
systems (which is responsible for providing power to the wheels) can increase its costs
significantly. Also, the company aims to expand its production centers. Due to these factors,
the company expects a significant reduction in its profits before taxes from 10675 million
Euros to 9815 million Euros. Due to the recent investments, BMW’s Return on capital
Employed (ROCE) in 2018 has also decreased as compared with 2017. Another point for
concern for BMW is that the automobile sector is not expected to grow in 2019 as well.
U.S.A. and China are likely to observe a negative growth i.e. 1.6% & 2.4% respectively.
Social Factors:
Following are the social factors impacting BMW PESTLE Analysis:
The BMW Group has a presence in more than 140 nations. The BMW group has 3 divisions
i.e. the automotive segment, the motorcycles and the financial services. A major chunk of
BMW’s revenues come from its automotive segment with all its brands catering to the
premium segment. BMW is focused on increasing its customer satisfaction. Apart from
increasing customer satisfaction from its vehicles itself, BMW aims to provide extra services
to improve their experience. The introduction of its BMW CarData service has allowed its
customers to get services as per the requirements generated from the data captured. The
Cardata service, thus, provides its customers with tailored solutions. BMW’s Mini makes use
of the service “BMW Connected” to enhance its customer’s experience.
Technological Factors:
The technological factors in the PESTLE Analysis of BMW are mentioned below:
BMW Group realizes the importance to integrate technology in its vehicles and also in the
services that it provides. BMU has opened an Autonomous Driving Campus in Germany
recently which will be a facilitator in designing of the automated vehicles. The Campus has
created around 1300 jobs for the people belonging to the IT sector. With the help of these
people, BMW aims to explore technologies like artificial intelligence and integrate them in its
solutions. Also, a new facility has also been opened in Beijing, China. Apart from the
automation, this facility will also help in developing new digital services and working on the
new age designs. With the company focusing on digitalization, it remains prone to Cyber
attacks. Although the risks related to cyber crimes can never be mitigated, but BMW should
continuously work towards implementing more secure techniques for the protection of their
and customer’s data.
Legal Factors:
Following are the legal factors in the BMW PESTLE Analysis:
BMW Group has been subject to various legal problems all over the globe. In the year 2017,
more than 100 of BMW’s customers complained about the engine failures while driving.
About 30 of them had taken this matter to the court as well. Also, in the year 2018, more than
3, 00,000 cars manufactured between 2007 & 2011 were called back as they were also prone
to complete engine failures while driving. Till date, about 90 of the BMW’s customers have
also complained about the mysterious fires in their parked BMW’s. The South Korean
Government charged a hefty fine of about $9.9 million to the BMW Group for allegedly
hiding the problems related with the fires in its engines.
Environmental Factors:
In the BMW PESTLE Analysis, the environmental elements affecting its business are as
below:
The BMW Group has always been an organization famous for contributing towards the
sustainability. The group has been contributing towards the UN Environment Program since
2001. In fact, the Group was the first in the automobile sector which came out with the post
of an Environment Officer. BMW group has also reduced its carbon footprint by reducing the
C02 emissions of its European vehicles by 42%. Also, with the introduction of electric
vehicles, the CO2 emissions have further dropped. The BMW i3 is fully electric with zero
carbon emissions. While their hybrid models have C02 emission as less as 45g/km.
To conclude, the above BMW PESTLE Analysis highlights the various elements which
impact its business performance. This understanding helps to evaluate the criticality of
external business factors for any brand.
Browse analysis of more brands and companies similar to BMW PESTLE Analysis. This
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Place:
BMW is a global brand with operations in more than 150 countries.
Production Network of BMW:
BMW is headquartered at Munich. Its production network had 31 locations
in 14 countries as of 2017. It includes 19 BMW Group plants, five joint
ventures, four partner plants and three contract production plants. The 19
BMW Group plants include 13 automobile and engine plants, two BMW
motorcycle plants, three sites for component production, pressed parts and
tools and one supply centre. Apart from its 31 production and assembly
plants, BMW has 16 research and development locations worldwide. It also
has 43 Sales subsidiaries and Financial Services locations worldwide. (annual
report, 2017.)
Sales & Service Network of BMW:
BMW has dealerships of each of its brands in several countries around the
world. It has a global dealership which includes 3,400 BMW, 1,580 MINI and
140 Rolls-Royce dealerships. BMW Group’s branches and authorised
dealerships handle sales in Germany. Outside of Germany, subsidiary
companies and some independent import companies handle sales. At more
than 1500 locations, BMWi dealership and agency network covers sales and
service. BMW motorcycles sell in more than 90 countries. More than 1200
dealerships and importers sell BMW motorcycles in these countries. In more
than 19 countries BMW provides financial services under the ‘Alphabet’
banner. The worldwide sales, service and financial network of BMW plays a
strong role in maintaining its global presence and providing services to its
customers. Customer service has grown highly important in the 21st
century and how a brand offers after sales services affects its image and
reputation.
Price:
BMW is a premium brand that follows a premium pricing strategy. It
competes with the other premium car brands like Audi, Aston Martin,
Mercedez Benz & Volvo. The premium pricing strategy of the brand
supports its premium image. However, BMW invests in technology and has
brought a large range of cars, SUVs and small MINI cars to the market.
These cars are attractive in look and are also loaded with technology. Most
of the cars by BMW are priced in the $35,000 – $100,000 range.
Rolls Royce cars are made for the ultra Luxury segment. Apart from their
luxurious looks, these cars too have the best in class technology. All BMW
cars from BMW to MINI and Rolls Royce are just as appealing as they are
luxurious. The Rolls Royce cars are priced much higher than average BMW
cars at above $300,000.
Pricing strategy of a brand has a major effect on its marketing too. BMW’s
pricing strategy is related to its premium image. It appeals to the premium
customer segment. The purchasing power of the middle class and the
upper middle class has grown post recession. This has led to growth in
sales of luxury vehicles and SUVs. However, premium pricing can
sometimes become an obstacle to sales. RollS Royce sales fell this year.
BMW AG on the other hand recorded better sales. Product innovation and
marketing also play an important role in mitigating the negative effect
premium prices can have on a brand’s sales. Sales of the BMW and MINI
cars have grown continuously during the last four years despite the
premium pricing strategy of BMW group.
Promotions:
Marketing and promotions are now a critical part of every vehicle brand’s
sales strategy. BMW’s selling expenses include sales, marketing and
advertising expenses. In 2017, total selling expenses of BMW reached 6.2
Billion Euros which was at 6 Billion the previous year. BMW uses several
channels for the promotion of its brand and products including traditional
and digital channels. Its strong image as a global player and a luxury brand
also plays an important role in the marketing of the brand. Its famous
slogan ‘Sheer Driving Pleasure’ indicates the distinct experience that BMW
has created for its customers. BMW’s marketing strategy includes video
marketing, print advertising as well as other forms of advertising and
promotions including motor shows, print advertising and sponsorships.
BMW has built a distinct image as a vehicle brand. It featured on Fortune’s
world’s most admired companies list again in 2018 at 19th position and it is
on the top among the vehicle brands. In 2017, BMW was at 21st position on
the same list. As a responsible vehicle brand, BMW has achieved several
more awards. Overall, level of recognition of the vehicle company is very
high. Known as the favourite drive of the rich and the spoilt, BMW makes
hearts thump with its brilliant models. The BMW logo is easily discernible
among the crowd of brands in the vehicle industry.
It is a famous brand and including its own website, its products are
discussed on the internet on media and vehicle blogs too. New releases by
BMW, MINI or Rolls Royce attract a lot of media buzz. In the U.S., it
sponsors and supports a wide range of educational, civic and cultural
programs. It also supports several charity and not for profit organizations
as a part of its social responsibility program. Social media is now an
important channel of marketing for BMW. The company uses videos heavily
as apart of its marketing strategy. It has uploaded around 850 videos to
YouTube which include educational and promotional videos. BMW has
maintained an active presence on the other social media channels too
including Twitter and Facebook. The company uses these channels for
promotions and customer engagement. Social media has supported the
marketing efforts of several brands strongly. Its growing use worldwide has
brought businesses closer to their audience. BMW is using it proactively to
stay connected with its global audience.
Conclusion:
BMW is a famous global brand of vehicles with sales and operations across
more than 150 countries. Its financial performance during the previous
several years has remained strong. Revenue of BMW went up to €98.3
Billion in 2017 rising from €94.2 Billion in 2016. In the recent years, BMW
has grown its focus on electrification. It is continuously expanding its fleet
of electric cars and has ambitious plans for the period of 2018-2025. As a
luxury vehicle brand, BMW has acquired immense popularity. The number
of competitors in the market is high. BMW has to spend heavily on R&D as
well as marketing and sales. For its customers, BMW has brought a
luxurious driving experience. It is continuously innovating to make these
vehicles safer and more convenient for its customers. Moreover, BMW is
focusing on making its premium ride sharing services a success in key
markets across the globe. The future of mobility rests on technological
innovation. From automated riding to AI for higher interconnectedness,
several things will make the battle all the more intense for vehicle brands.
However, BMW has got a strong production, sales as well as R&D network
and several other major strengths too. Based on these factors, ride might
remain easier for the auto-brand in the future.
Sources:
BMW Annual Report 2017
https://www.bmwusa.com/explore/connecteddrive.html
http://fortune.com/worlds-most-admired-companies/list
https://www.mbaskool.com/brandguide/automobiles/4892-bmw.html
https://www.bmwusfactory.com/community/corporate-
sponsorships/corporate-sponsorship/
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