Competitive Advantages of BMW: A Business Strategy Report

This report provides a comprehensive analysis of BMW's competitive advantages in the automotive industry. It begins with a company overview, highlighting BMW's history and current market position. The core of the report focuses on BMW's competitive advantages, including its innovative technology, diverse product portfolio, and strong brand reputation. The report employs SWOT and PESTLE analyses to evaluate BMW's strengths, weaknesses, opportunities, and threats, as well as the political, economic, social, technological, environmental, and legal factors impacting its business. Key factors contributing to BMW's competitive position, such as supply chain management and human resource management, are discussed in detail. The report concludes with recommendations for the company, emphasizing the potential benefits of expanding its hybrid and electric car offerings. The analysis underscores BMW's strong market presence and strategic approach to maintaining its competitive edge in a dynamic industry.

COMPETITIVE ADVANTAGES
OF BMW

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
COMPANY OVERVIEW ..............................................................................................................1
COMPETITIVE ADVANTAGES..................................................................................................2
SWOT ANALYSIS.....................................................................................................................2
PESTLE ANALYSIS..................................................................................................................4
FACTOR RELATED TO COMPETITIVE POSITION.................................................................5
RECOMMENDATIONS.................................................................................................................6
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................8

INTRODUCTION
Competitive advantages is the situation in which the company sales its goods and
services at competitive price in more desirable manner. These entities generate high margin then
the rival companies in the market (Ershova and Kuznetsov, 2019). BMW is a brand known for
providing high comfort, style and fulfilled the needs of the customers in the changes
environment. In this report the discussion will be based on the overview of the company with the
some relevant facts. Further the report will be based on the competitive advantages of BMW in
the hybrid and electric cars sector and what efforts the company is doing to achieve it. At last the
company aspects will be discussed in the competitive position of BMW in the market. Further
this report will includes the strength and weakness analysis of the BMW
COMPANY OVERVIEW
BMW is multinational company of Germany which manufacture the auto mobiles like
hybrid and electric cars, mini cars, rolls-royce motor cars, manufactures motorcycles BMW
Motorcaded. BMW is also known as Cherisher motormen werke AG or Bavarian Motor Works,
the company was founded in 1916. BMW is the part of best three big companies of the Germany
luxury automobiles manufacturing, with Audi and Mercedes- Benz, these are the best three auto
mobiles selling luxury around the world. The company restructuring is based on the Rapp
motormen werke aircraft firm manufacturing in 1917. when the first world war was over in 1918,
the company was forced to close the production of the aircraft engines by the terms of Versailles
Armistice Treaty. Then in 1923, the company decided to shift its business to motorcycle
production through which the company started to gain its business position in the market of
Germany, which lifts its business to produce in the fields of auto mobiles in 1928-29(BMW
COMPANY, 2019).
the success of BMW started when it produced its first car was DIXI MARQUE which
was based on the Austin 7 and company took license from the Austin motor company which is
situated in Birmingham, England. In 1930, the company re-establish its fields in manufacturing
of aircraft engines for Luftwaffe. The company gained huge success by the time of second world
war and manufactured engine designs named as BMW 132 and BMW 801 which were engines
with air cooled radials in this way the company achieved its success from the times of its
introduction the market (Ершова and Кузнецов, 2019).
CURRENT OVERVIEW
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In 2012, the BMW company was listed as the most reputed company of the world
which was stated by on the Forbes.com. The company got ranking based on its aspects of people
willing to buy the product,or recommend, or prefer to work in the company, or the investment
driven by the company are based on the 60% perception and remaining 40% based on the
product quality. The company produced 1,845,186 auto mobiles and 117,109 motorcycles in the
year 2012 (Mihaela and Mosora, 2016).
BMW introduced its first electric car in Germany BMW i3 in the year 2013. the car id
made of carbon-fiber and its first hybrid sports car was BMW i8 which was released in year
2014 in the same year the compact version BMW X4 of SUV introduced. In 2016 the company
introduced its first hybrid versions of 7 series and in 3 series are G11 7 series 740e and F30 3
series of 330e respectively. In year 2017 the company reported the earning of EUR 8.620 billion,
with the annual turnover EUR 98.678 billion, which was an increased by 4.8% in previous year
financial year of the company (Hwee, 2015). Currently the company shares are traded at euro 77
per share and the market capital of the company was valued at US 55.3 billion in November,
2018.
COMPETITIVE ADVANTAGES
the advantages that company is getting in the market due to its superior qualities goodwill
and the brand reputation over the other rival companies in the market. For successful business
framework the company leaders should have strategies that can beat the competition in the
market. To analyse and gain the competition in the market the company can use tools like
SWOT, PESTLE, FIVE FORCES, etc. which can help the company to understand the
competition level in the market for the company. To understand how BMW have advantages in
the competition to achieve its objective with help of analytical tools used as swot and pestle
(Fortunato, 2015).
SWOT ANALYSIS
STRENGTHS
 The company is mainly known for its innovative and highly advance technology in the
world which made the company as the leading brand for cars.
 The company has diverse range of product portfolio in the SUV, luxury sedan and sports
car as well (Aritua, 2019).
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 The company manufactures the car with unique features in its style and the interior
designs are elegant features which attracts customers.
 The company is running from 1917 which creates the market presence for the company
known for the oldest manufactures and carried the legacy over the passing of the years.
 The employees in the company are nearly 100,000 and manufactures over 1.5 million
cars per annum (Krčo and et.al., 2019).
 The company globally trade with countries like India, USA, Brazil,Japan, etc.
 the company advertise its product in such a way that the consumers easily get attracted
towards the brand and gives sponsorships events on globally
WEAKNESSES
 The company faces strong competition from the rival companies which manufactures the
luxury cars and capturing on the market share.
 The company mainly focuses to produce the car for the rich section of the society and
ignores the minority who cannot afford to purchase the costly cars.
 The financial planning done by the company is not efficient as the company which the
company can invest its money more efficiently in the areas where it can gain more profit
(Winroth and Bennett, 2017).
 The company is not highly successful in different work culture of other firm, due to
merger the company faced failure in the merged firm work culture.
OPPORTUNITIES
 Online channel: The company can create new customers from the online platforms in few
years the company can have the opportunity to understand its customers and serve them
better in the future.
 Environmental policy: The company can manufacture the cars which effects less to
environment pollution from cars. Which will create the opportunity for the company to
produce new technology (Hofmann and Meinzer, 2018).
 Competition: competitors in the market increase the level of competition in the market
which leads the company to improve its product and services through which the company
moves towards the betterment in its product.
THREATS
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 local distributors: The local distributors in the market are increasing which are reducing
the demand for the purchase BMW hybrid and electric cars.
 Technology: the company face huge threat for the competitors who are using highly
advance technology in the market.
 Skilled employee : the company faces trouble in getting the skilled workforce who can
help the company to innovate the product (Freudendal-Pedersen, Kesselring and Servou,
2019).
PESTLE ANALYSIS
 POLITICAL: For BMW company the political stability in the country plays significant
role in its business operation which impacts the company to face risk in investment. The
government interference in the company expansion or imposing tax are more for BMW
to grow its business. When government of the country shows the flexibility in the
operating the business activity for the company then it will become easier for the
company to perform its various business activities like import of raw material, exporting,
etc (Ershova and Kuznetsov, 2019).
 ECONOMIC: The company has great impact on the economy as the has strong
distinction due to which the company affects the global rates of inflation. The financial
performances in the economy affects the behaviour of consumer and facilities for buyer.
When the economy of the country is higher it will help the company to grow in that
economy and can contribute in the growth of the country economy as well.
 SOCIAL: The manufacturing of the car styles, pattern, logo, status, etc. will impact the
changes and the culture of the people in buying behaviour. The company follows the
produce the fuel efficient car and create awareness for the harmful emissions by
automobiles. The company needs to fulfil the ethical values and the social
responsibilities because what ever it produces are for the people of the society (Hwee,
2015).
 TECHNOLOGICAL: the new technologies used by the company will impact the
company to compete with the rival companies in the market of automobiles
manufacturing. New designs and innovative technology will decrease the competition in
the market.
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 ENVIRONMENTAL: desire to protect the environment impacted the people and
created the awareness for the emission of toxic gas and non-recycling elements. People
wants eco friendly and fuel efficient vehicles. By producing the Eco friendly product will
increase the respect for the company and customers will prefer to buy the product
(Aritua, 2019).
 LEGAL: The company has to follow the norms and regulation while operating in various
other countries. The impact to develop various markets like European, US , etc. market. It
play the vital role in for the customer satisfaction and behaviour towards the BMW
products.
FACTOR RELATED TO COMPETITIVE POSITION
For the success of the BMW in the competitive market some of the relevant factors of
the company plays an significant role for the company to achieve its competitive position in the
market. In BMW the the two key factors are described .
Supply chain management: BMW is confident about its product supply chain to meet
the growing demand for the hybrid and electric product to the people. The supply chain of the
company meet the demands on the global basis makes long term contacts. The company is
reducing the the portion of the raw material which are critical to use like use cobalt in the battery
cells (Freudendal-Pedersen, Kesselring and Servou, 2019). The company proposes to use the
recyclable cells and the production with the help of renewable energy power sources. The
recycled raw material can be used by the company again which will reduce the expenses of the
company to spend on purchasing of raw materials.
The company gets its raw materials from the European market which helps the company to get
better quality of the raw materials which increases the quality of the BMW cars and the
customers get the quality product which gives satisfaction to its consumers (Hofmann and
Meinzer, 2018).
Human resource management: the HRM department in the company plays the
significant role in the giving the competitive position of the company. Department hires the work
force who are highly skilled in the fields of the auto mobiles innovations an designs. With highly
innovative and creative ideas given by the employee increases the company potentiality top
compete in the market. The company is selling its product globally which means the company is
providing standard quality of the product to its customers and increase the reputation of the
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company in global market. The company influence the unemployed people to work as an
employee in the company as it becomes the dream job for the candidate to be the part of the
BMW company (Ershova and Kuznetsov, 2019). The HRM department gives various facilities to
motivate its employees in form of monetary and non monetary basis. With motivated employee
in the company work efficiently which in return increases the overall product qualities and the
services to the consumers.
RECOMMENDATIONS
From the above study of BMW it can be recommanded that the if firm launch the hybrid cars
than it will get huge beneficial for the company. Because the demand of the hybrid cars is going
in increase in the future definitely. BMW also have the opportunities to start a section of electric
car which is going to increase because of the increasing in the cost of the fuel. BMW have
competitive advantages because of its reputed brand and products. But company have few
problem which can be overcome like it produce the product for rich sections only and do not
considered the middle class and competitors pricing is low so it have big threats from them. If it
solve the problem and launch the hybrid and electric cars than it will definitely going to
successful. Firm also have opportunities to start online channel and the company can create new
customers from the online platforms in few years the company can have the opportunity to
understand its customers and serve them better in the future. Firm use this as a growth
opportunity in future. Also BMW can better is supply chain and reach to those area where firm
has not reached its products.
CONCLUSION
From the above study it can be concluded that BMW is the largest car selling company in
the world. The company started its business from 1917 in manufacturing of the aircraft engines.
After the first world war the treaty made the company to stop the production of the aircraft
engines. In second world war the company again started its business and began to expand its
fields in the production of motorcycle and cars which gave the success to the company in the
market of the Germany then company expanded its business globally and became the worlds
largest and high revenue earning company. With increasing brand reputation globally the
company also faced the competition in the manufacturing of the hybrid and electric cars. The
competitive advantages of the company analysed with the help of the swot and pestle through
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which the study tells the overall performance of the company and how it gained the advantages
in the competitive market.
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REFERENCES
Books and Journals
Aritua, B., 2019. The Rail Freight Challenge for Emerging Economies: How to Regain Modal
Share. The World Bank.
Ershova, A. E. and Kuznetsov, A. N., 2019. Strategy Competitive Development Of The
Company Bmw Group. Business Strategies.
Fortunato, J., 2015. Sponsorship and the Elaboration Likelihood Model: BMW's 2014 Winter
Olympic brand strategy. Journal of Brand Strategy. 4(1). pp.83-95.
Freudendal-Pedersen, M., Kesselring, S. and Servou, E., 2019. What is Smart for the Future
City? Mobilities and Automation. Sustainability. 11(1). pp.221.
Hofmann, M. and Meinzer, S., 2018. Preface: Intelligent & Autonomous Enterprise. In Digital
Marketplaces Unleashed(pp. 571-581). Springer, Berlin, Heidelberg.
Hwee, E. Q. C., 2015. Building & Sustaining Strategy: Bayerische Motoren Werke (BMW)–
Automotive Industry.
Krčo, S. and et.al., 2019. Digitization of Value Chains and Ecosystems. In Digital Business
Models (pp. 81-116). Palgrave Macmillan, Cham.
Mihaela, M. and Mosora, C., 2016. The Competition in the Automotive Market in Romania. The
Premium Segment. The Premium Segment (December 2, 2016). Romanian Competition
Journal, (1-2).
Winroth, M. and Bennett, D., 2017. International Production Networks in the Automotive
Industry: Drivers and Enablers.
Ершова, А.Э. and Кузнецов, А. Н., 2019. СТРАТЕГИЯ КОНКУРЕНТНОГО РАЗВИТИЯ
КОМПАНИИ BMW GROUP. Стратегии бизнеса, (5 (61)).
Online
BMW COMPANY. 2019. [online]. Available
through<https://www.bmwartcarcollection.com/about-bmw/>
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