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BMW SWOT Analysis

In this essay I will present a SWOT analysis of one of the largest carmakers, BMW, and identifythe capabilities that they have, which will enable them to sustain a competitive advantage in

automobile industry !irst there is introduction of general view of the automobile industry to

e"plain the comple"ity of it, and after that a BMW analysis

#utomobile Industry

In the period from $%%& to '&&$ automobile industry has undergone ma(or changes

)onsolidation was moving forward very rapidly and almost *%+ of the automobile market was

owned by si" international giant companies

uropean market specifically faced a furious competition, the high technological advancement

and the level of -uality achieved by most manufacturers radically decreased the opportunity for

product differentiation #lso, huge increase in productivity happened due to consolidation These

factors made price competition the prime strategy for )ustomers, environmental constraints and

petrol prices also helped in creating this insensitive environment and obliged many companies,

mainly midsi.ed players like BMW, to rethink their business strategy in order to survive

BMW overview

Bayerische Motoren Werke /roup 0BMW1 is one of the world2s leading lu"ury carmakers

!ounded and based in the /ermany, BMW employs 3'&,&&& workers in plants in /ermany

4S# and South #frica In $%5% 6erbert 7uandt bought BMW, when the company was infinancial difficulties, now they own 8*+ of the BMW shares

The powerful reliable performance and their lu"urious design made BMW 9The ultimate driving

machine: 4ntil $%%& BMW strategy was to focus on the high performance of its products ;ater

the high competition and the rapid development of its competitors forced BMW to think of

e"panding its range of products, to (oin the ranks of the auto industry super power In $%%8, the

/erman carmaker BMW bought

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Two ma(or strategic decisions were undertaken by BMW to deal with the e"ternal environment,

the first is the ac-uisition of s reputation for -uality, reliability and their dealer2s

attention to service

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warranty, including maintenance and service, in the price of the car, cutting out complaints that

occasional technological glitches made the brand e"tremely e"pensive to maintain

W#H=SSS

BMW roll out a new or updated model nearly every three months through '&&5 may shift

emphasis on getting a new model to market rather than focusing on issues that may develop with

e"isting models, issues such as software, and mechanical problems

Manufacturing costs

)ompared with other volume producers, BMW2s manufacturing costs are much higher, its

product development process more costly, and its purchasing costs are higher because its

suppliers are the industry2s best@ and the workforce among the industry2s most talented which is

stated as one of BMW2s strengths, but can be a weakness as having the ?best2 and ?most talented2

does not come cheap

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OAAO