Competitor And SWOT Analysis Of BMW In An Essay.

Introduction to BMW and its Background

Question:

Discuss about the SWOT Analysis of the Organization.  

The aim of the following report is to make a profound and fruitful analysis of an organization’s competitors along with its strength and weakness. For the distinct purpose, the present paper has considered one of the world-renowned and best-selling luxury car manufacturing organizations – BMW. In order to accomplish the aim, the assignment would inaugurate with providing brief background information about the chosen organization and thereafter will attempt to make a competitor and SWOT analysis of the organization.  

Bayerische Motoren Werke AG (BMW) is known as one of best selling luxury automobile production company that has been founded in the year 1916. The organization is known as the predecessor of Rapp Motorenwerke and headquartered in Munich, Bavaria of Germany. The organization is chiefly celebrated for manufacturing and selling luxury vehicles, sport cars, motor cycles and bicycles around the world. According to the last year production and profit report, BMW has earned a gross figure of 92.175 billion euro. Presently, the organization is running with more than 122,244 employees whose combine efforts have supported the organization to manufacture and sell near about 2,430,507 vehicles in the year 2015 (Kumar 2016).

The impressive aspect about the organization is, BMW belongs to the membership of the National Environmental Achievement Track of U.S Environmental Protection Agency. The organization is praised for being one of the top most organizations for stewardship as well as performance. The organization’s responsibility to maintain high environmental sustainability should be granted as one of the potential aspects of strength for BMW (Styles and Goddard 2014). However, it is unfortunate that Mercedes-Benz and Lexus are two potential rivals whom the considered organization is finding hard to compete in the front of North America. Nevertheless, BMW still has its unique capability of innovation and the distinct power of technological advancement through which it can maintain the status of being one of the market leaders in the domain of automobile production and selling.         

In order to understand the strength of the competitors along with to have a cohesive understanding about the strategies of the rival organizations of BMW, an in depth analysis of four key aspects – objectives, assumptions, strategies and capabilities of the competitors of BMW is required to be done. The main competitors of BMW are Mercedes-Benz, Audi, Honda Motors, Porshe Automobile and Volkswagen (Csizmazia 2015).  

Competitors’ Objectives

• The objective of Mercedes-Benz is to accomplish a sustainable growth with an impressive profit margin through constantly increasing its value.
• The objective of Audi is found out to become the best brand for selling premium brand in the world (audi.com 2017).
• However, the corporate objectives of Honda motors are to have an impressive international growth by innovation and by making the target market happy.
• The goal of Volkswagen is to acquire a long-term return on its sale along with to generate the sale of the unit of near about 10 million vehicles a year. The organization desires to deploy innovation and technologies for accomplishing the motive.

Competitors’ Assumptions

The assumption or expectation of Volkswagen regarding its business aims is becoming one of the most attractive employers in the industry of automobile whereas Audi aspires to change the lifestyles of the customers by introducing unique design and incorporating innovative features in the vehicles. On the other hand, Honda Motors has expectation to develop business plans by assuming that the global economy and market situation will decline in the following year. However, rival organizations like Mercedes Benz and Porche desires to understand the changing demands of the target markets and fulfill their demands by doing thorough market research and product modification.

Competitor and SWOT Analysis of BMW

Mercedes Benz

The four key business strategies of Mercedes Benz are strengthening the core capabilities, growing globally, leading the field of technology and driving one-step ahead of the digitalization. The strategies of the organization are accompanied by the organization’s capabilities like continuous product innovation, financial stability, and worldwide facility of manufacturing and strong product portfolio (daimler.com 2017).

Volkswagen

 The core capabilities of the organization are widest automotive portfolio and a firm synergy among its brands. The strategy, which supports the capabilities of the organization is the strategy of diversification (volkswagenag.com 2017).

Audi    

The latest strategy that the organization is having is the “TOGHETHER - strategy 2025”, which is believed to assists the organization’s core competencies like brand name, unique design and technical innovation.

Honda Motors

However, Honda motors, which is one of the potential competitors of BMW has strong position in the automobile market of Asia and has strong dominance in the engine industry (Csizmazia 2015). The distinct strategy that the organization holds to become successful is the “Joy of selling” by creating encouraging experiences for the customers, fulfill the complicated demand and improve customer relationship.    

Prior to evaluate the strength, weakness, threat and opportunities of BMW, it is required to mention here that the group of BMW consists of three particular brands – BMW, MINI and Rolls Royce. Most importantly, the organization is not only known for manufacturing luxurious cars as BMW has also mastered in manufacturing aircraft and marine engines. However, the following analysis will give a precise understanding about the strength and weakness along with the possible premises of threats and future opportunities for BMW.

Strength ·The power to manufacture cars in sophisticated style with unique and elegant interiors (Lee and Yang 2015) ·Diversification in business operations through having brands like MINI, Motorrad and Husqvarna ·Competent in producing hybrid as well as electric cars ·Early move in selling luxurious cars in the developing countries of South East Asia ·Production strength with more than 100,000 employees

Weakness ·Disappointing automotive brand portfolio ·Disappointing number of strategic alliances (Jussani et al. 2015) ·In comparison with other organizations, BMW has few product differentiation ·The organization is suffering with increasing amount of debt ·A huge monetary loss for the controversy of recalling cars due to non-abidance to the government Opportunity

Opportunity Opportunity to modify its current automotive portfolio ·Opportunity to improve its existing strategic alliances (Santos 2014) ·Opportunity to expand business into new business markets ·Opportunity to have revenue hike due to the rising demand for premium cars ·The organization has the opportunity to increase product differentiation

Threat ·Tough competition in the market with Mercedes-Benz, Honda and Volkswagen ·Rate of fuels are increasing, therefore there are high chances to lose customers ·The price consciousness of the target market ·Chances to inferior quality imitation ·Negative impact of the fluctuations in the exchange rate

From the above SWOT analysis, it can be contemplated that BMW can have a revenue hike in the coming future if the organization would increase its competency in producing hybrid as well as electric cars. Fortunately, the organization has already planned to launch models, which would run on various alternative fuels like natural gas. Most significant to contemplate here that BMW’s more than 100,000 employees, who are responsible for a production of 1.5 million cars, should be considered to be the organization’s key strength (Styles and Goddard 2014).  However, as per the SWOT, BMW has unimpressive product diversification as they are only having brands like MINI, Motorrad and Husqvarna. However, it can be said that in order to stay potential in the competition, the organization should work on one of its major competence, which is product innovation and technological advancement. However, the SWOT is indicative of the fact that BMW immediately needs to work on its automotive brand portfolio as well as should attempt to decrease the rate of present debt.

Nevertheless, one of the predominant threats of BMW is understandably the increasing rate of fuel. At the same time, it has been identified that younger generation are less bothered with brands and prefers to spend money on various electronic appliances. 

Conclusion:

From the above report, it can be deduced that the chief rival organizations those can edge over BMW are Mercedes Benz, Audi, Honda motor and Volkswagen. However, from the above paper, it is understandable that the core capabilities of BMW are technical innovation, employee strength and diversified product range, through which the enterprise can dominate its competitors.

References:

Corporate strategy. 2017. [online] Audi.com. Available at: https://www.audi.com/corporate/en/company/corporate-strategy.html [Accessed 16 Feb. 2017].

Csizmazia, R.A., 2015. Sharing Economy-Downstream Extension of the Value Chain of German Automotive Manufacturers and of their Competitors.

Jussani, A.C., Heer, A., Ibusuki, U. and de Moura Côrtes, C., 2015. Electric car and Porter’s five Forces: Marketing Positioning in the Automotive Industry (No. 2015-36-0486). SAE Technical Paper.

Kumar, K., 2016. Strategic Management On BMW.

Lee, H.J. and Yang, H., 2015, December. Potential competitor identification and competitor analysis by monitoring patent information. In ISPIM Innovation Symposium (p. 1). The International Society for Professional Innovation Management (ISPIM).

Santos, L.M.D., 2014. Efficiency optimization of the transportation supply chain activity: the maritime option for Volkswagen Autoeuropa (Doctoral dissertation).

Strategic focus areas. 2017. [online] Available at: https://www.daimler.com/company/strategy/objectives.html [Accessed 16 Feb. 2017].

Strategy. 2017. [online] Volkswagenag.com. Available at: https://www.volkswagenag.com/en/group/strategy.html [Accessed 16 Feb. 2017].

Styles, C. and Goddard, J., 2014. Spinning the wheel of strategic innovation. Business Strategy Review, 25(4), pp.76-80.

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