Business Foundation Extended Project: BMW Market Analysis Report

This report provides a comprehensive analysis of BMW's market position within the UK automobile industry. It begins with an introduction to the importance of maintaining market share and competitive advantage, followed by an overview of market trends in the automobile sector, highlighting the UK's attractiveness for car companies. The report then delves into BMW's background, competitors (Audi, Mercedes-Benz, Volkswagen), and strategies for gaining competitive advantage, including geographic and demographic segmentation, and Porter's generic strategies (cost leadership, differentiation, and focus). It explores other relevant aspects of the company such as supply chain, pricing strategy, brand value, marketing mix, and human resources. Finally, the report applies Porter's Five Forces to assess the competitive dynamics of the industry, considering factors like rivalry, supplier and customer power, and threats from new entrants and substitutes. The conclusion emphasizes the significance of positioning strategies for competitive advantage.

Business Foundation
Extended Project

Table of Contents
Introduction........................................................................................................................................3
Market trends in automobile sectors...........................................................................................3
Gaining competitive advantage....................................................................................................4
Other relevant aspects of the company......................................................................................5
Conclusion.........................................................................................................................................6
References.........................................................................................................................................8

Introduction
It is essential for a business organization is to maintain their market share and
competitive position in the market. This required various an appropriate and effective
implementation of marketing function. The present report based on BMW which is
one of the leading automobile corporation and provide a highly qualitative product to
its customers (Laefer, 2011). But in recent time there are large number of player
provide a tough competition to the company in order to sustain their position in the
market. This report will provide the various aspects of marketing major competitors
and positioning strategy of the company in order to meet its long term goals and
target. Business environment is dynamic in nature which create needs to be forecast
in order to minimize potential risk and also build competitive advantage. This report
based on BMW which is a luxury car manufacturer located in the Germany.
Market trends in automobile sectors
The automobile industry in UK one of the most attractive market for leading car
companies in the world. There are more than 30 business organization operate their
business in this sector such as Honda, Toyota, Hyundai, Suzuki, General Motors,
BMW etc. According to the government data Car market in UK is mass and attractive
as compare to other countries which provide a future opportunity for automakers to
start their business. In the recent years, the growth and development in the vehicle
industry is drastically increase. Today, world automobile giants such as BMW, Ford,
GM, Tata, Nissan, Toyota etc. set up their plants. This industry plays a vital role in
the job creation and growth rate for the UK. The Automotive sectors contribute more
than 10 percent of overall trade which is too significant and generate $60 billion
approx. in last year.
Background of the company: BMW one of the leading frim in the car manufacturing
located in German. They produce premium cars, sports cars, motorcycles and
bicycles. The revenue of the company is more than $100 billion and operate their
production facility in USA, Europe, India, China, Brazil and so on (Yunus, Moingeon

and Lehmann-Ortega, 2010). The having more than 120000 highly skilled staff
across the world which provide competitive position in the market.
Competitors: BMW is basically providing a premium and luxury product for their
customer which are excellent in terms of design, performance, technology, and
safety. There products can be categorizing in to Sedan, Compact cars, SUV and
also in electric vehicle which provide gain competitive advantage in the market. The
overall market share of the cited firm is more than 8 percent which is quite good as
compare to other firms in the UK market. There is various car maker’s sale their
products in UK which having good presence in the premium car segment. In the
context of BMW market share was 8.2 percent in the last year and they sale approx.
1.68 million cars in the year 2015 which is quite higher as compare to the last year.
There is various car maker’s sale their products in UK which having good presence
in the premium car segment. In the context of BMW market share was 8.2 percent in
the last year and they sale approx. 1.68 million cars in the year 2015 which is quite
higher as compare to the last year. Volkswagen AG also sale 1.57 million which is
second spot in the country. Mercedes Benz one of the major competitor’s sale more
than 1.40 million vehicles which got 3rd position in term of market share and unit’s
sales.
On other hand, they also having various competitors which provide tough
competition to the cited firm. These are:
Audi: This is one of the biggest competitors of BMW and terms of product in market
share and range of products. This company also provide their car for each segment
such as sedan, SUV and economic segment as well.
Mercedes Benz: The total market share of this firm is more than 5 percent and they
also provide the same segment products to their customer. In the recent
development Mercedes Benz also produce hybrid cars and SUM which provide a
tough competition for the BMW X series cars.
Volkswagen: This is one of the leading group in car manufacturing where market
share is 3.5 percent in the year 2015. They also produce same range of products.

Gaining competitive advantage
There are various tools and techniques which can be used by the BMW in order to
gain competitive advantage in the market (Grönroos and Helle, 2010). In this way,
the cited firm need to develop segment their overall market, target its customer and
develop positioning strategy in order to meet its aims and objectives in an effective
manner.
Geographic segmentation: In this segmentation, BMW required that to categorize its
market in to domestic and international level. For example, they can divide global
market in the basis of continent as Asia Pacific, Europe. Latin America etc.
Demographic segmentation: This is another segment where marketing manager of
BMW can divide the overall market on the basis of following aspects:
Age: BMW can divide its customer on the basis of their age and develop positioning
strategy. They can offer sport car product to the customer whose age between 24-28
years old, SUV products to 30 to 35 years old and Sedan for 35 to 45 years old.
Income groups: This is one of the suitable segment where company required that to
offer its products to its customer on the basis of their income (Janssen, 2015). They
can provide premium and customized cars to its high income groups and economic
products to its medium income groups.
Occupation: There are variety of customer which can be divided in to professional
and executive. There are various products of BMW such as X series car for their
business professions and they also having M series model for executive segment. It
helps to increase their sales and crease competitive advantage in the market.
Porters generic strategy: This is one of the most suitable approach to generate sales
and revenue and gain competitive advantage in the market. there is various strategy
which can be used by the BMW. These are:
Cost leadership: In this approach a company required to offer its product below to
the industry which helps to increase sales and profit and develop competitive
advantage. In the context of BMW, which having a strong research and development
base and they also investing more than $4 billion each every which is quite higher
than any other firms (Sanchez and Ricart, 2010). They need to develop advanced

technology which can be offered at the lower in the premium car segment and
increase its market share.
Differentiation: A unique product plays a vital role in generating competitive
advantage. Therefore, BMW required that to develop different product in terms of
quality, features, design, technology and safety. The cited firm having strong
performance of their engine which increase the performance level of its products
(How this BMW corporate accelerator sought to steer away from innovation labs'
pitfalls, 2017). Therefore, their loyal customers are wants to buy their products due to
uniqueness design and technology.
Focus: This is another strategy where BMW required to focus on their customers and
design their products accordingly. In this way, BMW conduct market survey on
regular basis and conduct feedback which helps to know their choice. For example,
in the recent time, there are large number of people who wants to eco-friendly
products which consume less fuel. Therefore, company is developing such product
and tries to gain competitive advantage in order to meet its short and long term
targets.
Other relevant aspects of the company
Supply chain: For a car manufacturer supply chain is an integral part for a just like
sales, marketing, product development, manufacturing stability, profit. Because, their
profit based on its operational efficiency and logistics (Osseiran and et. al., 2014).
They use variety of technology in their production process such as integrated
information system which provide up to date information about the product and its
part, availability in the production facility etc.
Pricing strategy: There are various pricing can be used by BMW which are described
in marketing mix tool of the company. it also provides competitive advantage and
generate revenue for the business organization.
Brand value: Today, branding become a corporate strategy for each and every
company. therefore, they spending billions of dollars and create brand value in the
respective industry. In the context of BMW spending billions of dollars on their
marketing campaign to create brand awareness in the market. for example, in the
UK the brand ambassador is Alessandro Zanardi who belongs to the motor sports.

Marketing: This is one of the crucial strategy for a company in order to develop
competitive advantage in the market. These are:
 Product: It is related with product and service offered by the company and
helps to create competitive position over competitors. In the context of BMW
where the large number of products in very segment such as Sedan, SUV,
electronic cars, compact car etc. They also categorise its products in to the
income level of the customer groups so that increase its market share (Lee,
Phaal and Lee, 2013).
 Price: BMW using premium pricing for its product due to they having high
quality and luxury products as compare to other firms.
 Place: Today, company having various production facilities in different
countries such as India, China, Europe, America, Brazil etc. Promotion: There are various marketing tools and techniques used by the
cited firm such as electronic media, social media and print media.
Human resource: Employees are the valuable asset for each and every company
because they contribute in attaining organizational goals and target (Kryvinska,
2012). BMW having more than 120000 staff which highly skilled. Because, cited firm
providing training and development on regular basis of which enhanced their
productivity and efficiency and meet its short and long term targets.
Porter Theory
There are following forces can be including:
 Rivalry from existing players
 Bargaining power of suppliers
 Bargaining power of customer
 Threats of new entrants
 Threat of substitute products
Rivalry from existing players: This is one of the major force which influence a

business and its current and future performance. In the context of BMW, there are
already large number of existing competitors which includes Audi, Honda, Porsche, Jaguar,
Land rover, Mercedes Benz etc. They share approx. 4%, 3%, 2.5%, 2%, 5.5% respectively.
Bargaining power of suppliers: BMW having more than 12000 suppliers across the
world which supply various components of products and services. These products
are not unique which reducing the bargaining power of suppliers.
Bargaining power of customer: There are large number of companies which proving
the same category of product but this segment is premium which not increase the
bargaining power of customers.
Threats from new entrants: This is one of the most significant element in the Porter
theory. Today, in the automobile sector, there are various new companies such as
Tesla Motors which provide its products with high quality products with innovative
design.
Threat of substitute products: In the present era, the awareness of customers
regarding public transport such as buses, subways etc. are reducing the sale of
these products which is not good for the company.
Conclusion
As per the above mentioned the role of positioning strategy crucial in order to create
competitive advantage in the market. This report explained about the market trends
of automobile sector in the United Kingdom. there are various positioning and
targeting strategy which is essential for the cited firm. The last part of the report
discussed about the various aspects such as marketing, human resource, supply
china pricing strategy and so on. this report also provides the information regarding
major competitors of BMW and its adverse impact on competitive advantage of the
company.

References
Books and Journal
Laefer, D. F., 2011. Quantitative support for a qualitative foundation reuse
assessment tool. In Geo-Frontiers 2011: Advances in Geotechnical
Engineering. pp. 113-121.
Yunus, M., Moingeon, B. and Lehmann-Ortega, L., 2010. Building social business
models: Lessons from the Grameen experience. Long range planning. 43(2).
pp.308-325.
Grönroos, C. and Helle, P., 2010. Adopting a service logic in manufacturing:
Conceptual foundation and metrics for mutual value creation. Journal of
Service Management. 21(5). pp.564-590.
Janssen, M., 2015. Foundation support for media: a boon with strings attached.
Society. 52(6). pp.561-564.
Sanchez, P. and Ricart, J. E., 2010. Business model innovation and sources of value
creation in low‐income markets. European management review. 7(3).
pp.138-154.
Osseiran, A., and et. al., 2014. Scenarios for 5G mobile and wireless
communications: the vision of the METIS project. IEEE Communications
Magazine. 52(5). pp.26-35.
Kryvinska, N., 2012. Building consistent formal specification for the service enterprise
agility foundation. Journal of Service Science Research. 4(2). pp.235-269.
Lee, J. H., Phaal, R. and Lee, S. H., 2013. An integrated service-device-technology
roadmap for smart city development. Technological Forecasting and Social
Change. 80(2). pp.286-306.
Online
How this BMW corporate accelerator sought to steer away from innovation labs'
pitfalls, 2017. [Online]. Available through:
<http://www.thedrum.com/opinion/2017/01/31/how-bmw-corporate-
accelerator-sought-steer-away-innovation-labs-pitfalls>. [Accessed on 22st
September, 2017].