Environmental Analysis of Automobile Industry BMW

This report provides an environmental analysis of the automobile industry with a focus on BMW. It includes a SWOT analysis, PESTEL analysis, Porter's five forces model, and value chain analysis. The report also discusses the impact of political, economic, social, technological, legal, and environmental factors on BMW's operations.

Assessment 1
Environmental
Analysis of Auto-
mobile Industry

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK...............................................................................................................................................3
SWOT analysis............................................................................................................................3
PESTEL analysis:........................................................................................................................3
Porter's five forces mode.............................................................................................................3
Value chain analysis....................................................................................................................3
CONCLUSION ...............................................................................................................................3
REFERENCES................................................................................................................................5

INTRODUCTION
Global business environment refers to market environment which is an inclusive of
internal as well as external business market. Under the given report document, analysis of such
business environment will be facilitated. This will ensure success of organisational plans and will
enable better approach of activities being produced in the operational firm (Bharadwaj, 2018).
For the given report document, key considerations to operational working at BMW will be taken.
Respective company has its headquarters in Germany and was founded in 1916 by Karl Rapp,
Franz Josef Popp and Camillo Castiglioni. For the given report evaluation over various internal
as well as external tools will be taken into consideration relevant to operational of chosen
company (Arumugam, Kannabiran and Vinodh, 2020).
TASK
SWOT analysis
The SWOT analysis refers to the analysis of factors that can impact the business
operations of company. The managers of given firm uses such analysis into identify such factors
that helps into improvise their marketing strategy in regard to enhance their company operations.
Strength Weakness Brand image-BMW is a group who has
three brands under their name including
BMW, Rolls Royce, Mini. All these
brands are serving in premium segment
of market. Due to such effective
segments and variety of options
established the strong brand image of
company operations in UK market.
Company has several loyal customers
fan base that shows the strong market
appearance in UK market (Chaudhary,
2019). Effective technology-It is another
 Negative publicity- In the time of
pandemic company fired several
employees as well as reduced the
salaries. Because of such scenario
company was criticize by their
stakeholders which somehow impacted
their brand value.
 High debts- Company portfolio has
only luxury cars that mainly targets
higher class and middle income class
individuals. Due to COVID 19
company sales were drastically
declined which increase their debt.

organisation which is offering
continuous improvement as well as
technological advancement to their
customers. The mentioned brand
regularly focuses into adopting the new
and enhanced technology using in their
cars model. Such as in-built
navigations, AI assistant systems which
gives the company of competitive
advantage to their operations. Its
research and development team
innovates customer focused
technology that succours into adopt the
UK market.
Moreover company have the potential
to overcome such debt. But because of
these debt their operations are
somehow affecting (Chavez and
Sharma, 2018).
Opportunity Threat Eco mobility market- Markets are
slowly shifting towards the
environmental friendly mobility. Since
the company already has its hybrid
model in the market that attracted the
customers very much. Hence they have
the opportunity to further create such
types of more models with decent
prices that can helps them into attracts
customers in UK market. Autonomous vehicle demand- The
market demands are changing
immensely. Peoples are demanding for
autonomous vehicle. Hence the
company have the opportunity to
 Increasing government regulation-
UK government has enforced the
BREXIT law in its economy due to
which company can face trades
conflicts such as high cost of tariff
charges as well as lack of skilled
workers could be the main conflicts for
company operations.
 competitive market- The UK auto
mobile market is changing rapidly.
Several big giants company offering
unique features and models in its cars.
Since the mentioned company
operations can be impact due to their
strong presence. These brands can

creates new model with the help of
development team. Through this have
the advantage of new adopters of
technology. This can enhance their
revenue as well as sales which
ultimately succours into decreasing the
debt (Kumar, Mathiyazhagan and
Mathivathanan, 2020).
deploy BMW loyal customers by their
range of products (Mathiyazhagan,
Sudhakar and Bhalotia, 2018).
PESTEL analysis:
The above mentioned analysis perform by the company to address the external factors
that affecting the company operations. Mangers of given firm uses such analysis as a filtrations
which succours into identifies extrinsic scenarios. Through this market dynamics were classified
that helps into improve business practice of given firm (Severo, Dorion and Guimarães, 2017).
 Political- It is the one of the most common factor in which every company operations
were depends. The political factors plays a major role in company functions. Since the
UK has withdrawal its name with EU which arises several conflicts as an higher trade
Tariffs and trade inflexibly. Hence due to such policy the mentioned company can face
conflicts in operations. such as higher import duties on raw products as well as shortage
in skilled workers could be the problem for BMW in performing its task more
deliberately in UK market.
 Economic- Due to pandemic several peoples has faced the issue of financial crises as
well as they found the difficulties in their livelihoods. The Economy of UK is affected by
the pandemic which raised the problem of flow of income. Hence, this impacted the sales
of mentioned company also. Since the company major product portfolio has luxurious
and high cost cars which need high spend. The economy trends are not in positive
conditions that can afford to buy their products. Therefore company can face sales
declination in its operations (Sim and Sim, 2017).
 Social- The peoples of UK were majorly prefers quality products. The mentioned
company invest heavily on their research and department to understand the social needs

of customers in UK. Through which they formed such products that attracts the
population of mentioned economy.
 Technology- Technology is the major part that showing the mentioned company
credibility . BMW regularly focuses on enhancing their technology in regard to take the
competitive advantages. They implanted several automated robots in their manufacturing
line that creates the effective production process in its functions.
 legal- The mentioned company faced several legal factors including the interference of
government policies and their regularisation. Government has introduce various laws
regarding the companies operations and due to that BMW has been bounded inside these
guidelines by the government authorities.
 Environmental- Environmental factors plays a huge role in impacting the company's
operations. These factors include Weather & Climate, Sustainability in production,
location of manufacturing unit, and many other contexts.
Porter's five forces mode
The given model porter's five forces is a strategic model which is helpful for identifying
as well as analysing the competitive environment of the business firm being operating in an
operational region. From the analysis of the tool, managers of a corporate firm can derive better
competitive advantages when engaging their operations in competitive business environment
with presence of competitors. In relative context of BMW, the company being famous in auto-
mobile industry for delivering royal set of consumer their desirable models of cars. The
managers of the corporate firm takes considerations to competition, however, it seems to be
moderate in terms of being in royal car delivery services. For the purpose being managers of the
business firm takes key considerations to porter's five force model (Xu, Prybutok and Blankson,
2018); Competition in the industry: For the given element of the model, it seek considerations
to competition which is faced by corporate firm in terms of its operational market. In
context of BMW, this force affects business firm at high alert for competition in the
industry. This could be because of uncertain market environment and ever changing
behaviours of consumers of the business firm. Potential of new entrance: In the stated element evaluation in terms of threat to firm in
accordance to any new entrance is being recognised. In context of the chosen company,

company have relative low threat of new entrance. This is because as given company is a
high heights of success and it will be hard to compete for any new brand arise in business
market. Power of suppliers: The said power relates to power of suppliers of the business firm to
manipulate prices of raw materials being delivered to the business firm. In context of the
chosen company, relative power tends to low. For the reason being respective company
operates with 12,000 suppliers being located in more than 70 countries. Therefore, any
manipulation proposed by a supplier might shift demand of raw material to another
supplier. Power of customers: The given power states about engagement of customers of the
business firm in respect to manipulate the prices of products and services being offered
by the corporate firm. In context of the chosen company, this power tends to be
moderate. With relative factors of brand equity, technological innovation, product quality
and customer experience this power stay at moderate alert for the company.
 Threat of substitution: For the given element basis of discussions are being made in
respect to threat which is faced by corporate firm in terms of substitute products or
services being available in the region. In context of the chosen company, it faces high
threat to substitution. With upcoming of several rival brand in marketing including, Audi,
Toyota, Mercedes, Lexus etc. company faces high alert for this power.
Value chain analysis
Under the stated analysis, a corporate organisational firm can identify as well as create
value of activities being produced in the business firm. The stated analytical tool guides efforts
of an individual to create maximum efforts which are being produced from conducting range of
various activities of the operational firm. Through the analysis business manager gains advantage
of being in competitive advantage and seek for better brand image for a long term in operational
environment of the business firm. In relative context of BMW, managers of the firm in respect
to guide activities of the corporate firm in correct direction takes use of value chain analysis
(Zhili, Boqiang and Chunxu, 2019);
Primary activities
Inbound logistics: BMW groups has around 13,000 located internationally. In the
process being dedicated efforts are being made in respect to minimizing the transportation cost

and also develops standards on the basis of which effective sourcing of the raw materials of high
quality.
Operations: The given company deals in Motorcycle, Automotive, financial services and
other services. The relative company operate as one of the biggest manufacturing network in 30
sites and in 14 countries.
Outbound logistics: BMW Group global distribution network comprises about 3,310
BMW, 1,550 MINI and 140 Rolls-Royce dealerships. In China alone, around 60 BMW
dealerships were opened in 2015.
Marketing and sales: Relative company develops effective standards of through using
digital marketing techniques will be regulated. This ensures capturing wide market area and
ensure their effectiveness in terms of dealing with competitive market forces.
Services: Exceptional quality of service in general and the post-sale service in particular
is one of the core sources of BMW Group competitive advantage.
Support activities
Firm infrastructure: Managers of the corporate firm ensure development of attractive
firm infrastructure which ensure providing of better working culture in the business firm. This
enables better engagement with productive efforts and extract best efforts when being in
competitive business environment.
Technology development: Regular use of technological updates are being facilitated
within the organisational firm. This ensure better support to primary activities of the business
firm and guides effective efforts being produced to ensure success of organisational plans and
objectives.
CONCLUSION
From the analysis of above report document, it can be concluded that, managers of
respective corporate firm have greater acknowledgement to both internal and external business
environment being part of business environment. Furthermore, it can be said that managers of
given corporate firm by taking consideration to such business environment formulates effective
business plan that places business organisation in relative better competitive stage. Lastly, report
concludes over effective use of resources being guided by activities performed in firm to attain
desired goals and objectives of the business firm.

REFERENCES
Books and Journals
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Innovation in Advanced Automobile Technologies (pp. 11-21). Springer, Singapore.
Chaudhary, R., 2019. Green human resource management in Indian automobile industry. Journal
of Global Responsibility.
Chavez, R. and Sharma, M., 2018. Profitability and environmental friendliness of a closed-loop
supply chain for PET components: A case study of the Mexican automobile
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Kumar, N., Mathiyazhagan, K. and Mathivathanan, D., 2020. Modelling the interrelationship
between factors for adoption of sustainable lean manufacturing: a business case from
the Indian automobile industry. International Journal of Sustainable
Engineering, 13(2), pp.93-107.
Mathiyazhagan, K., Sudhakar, S. and Bhalotia, A., 2018. Modeling the criteria for selection of
suppliers towards green aspect: a case in Indian automobile industry. Opsearch, 55(1),
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Severo, E.A., Dorion, E.C.H. and Guimarães, J.C.F.D., 2017. Innovation and environmental
sustainability: analysis in Brazilian metal-mechanic industry. International Journal of
Innovation and Sustainable Development, 11(2-3), pp.230-248.
Sim, J. and Sim, J., 2017. Air emission and environmental impact assessment of Korean
automotive logistics. Journal of Cleaner Production, 159, pp.130-140.
Xu, L., Prybutok, V. and Blankson, C., 2018. An environmental awareness purchasing intention
model. Industrial Management & Data Systems.
Zhili, D., Boqiang, L. and Chunxu, G., 2019. Development path of electric vehicles in China
under environmental and energy security constraints. Resources, Conservation and
Recycling, 143, pp.17-26.