Strategic Analysis and Implementation for BMW - SBLC7011

This report conducts a comprehensive strategic analysis of BMW, a leading automotive manufacturer. It begins with an introduction to strategic management and its importance, then delves into BMW's strategic positioning and competitive advantages. The report utilizes various analytical frameworks, in...Read More

STRATEGIC
MANAGEMENT

Cover Content
Introduction
Strategic analysis
Pestle Analysis
Swot Analysis
Porter's Five Forces Model
Conclusion
References

Introduction
 Strategic management is a very important aspect which deals with identifying and
describing strategies or policies of a business concern for quick achievement of goals.
Also this process helps in performance enhancement and developing sustainability for a
longer period.
 Strategic management includes various steps such as planning, setting objectives,
analysis as well as monitoring of results. This PPT is based on BMW which is a
German auto-mobile sector company. It has its headquarters in Munich, Bavaria. This
report encloses strategies of BMW as well as its strategic and competitive advantage

Strategic Analysis
 BMW which is one of famous automotive brand in all over the world has implemented
various strategies in the last 5 years. Due to the high competition across the globe, it
executed dual emphasis strategy, considering the customer's obsession with the brand
and minimizing the cost to increase its sales BMW soon realised that growth can not be
achieved only by higher customer satisfaction, it should also focus on cost as well as
revenue to earn huge financial benefits by surviving in the long run. After some time,
there was a decrease in the demand for cars due to many economic factors prevailing at
that time in the market.

Pestle Analysis
 Political factors- As BMW is operating business in global market through its 17 production
unites in China, UK, India etc., BMW group has to co-ordinate and comply with various
regulations in each of the countries
 Economic factors-BMW an automotive global company, therefore, the inflation rates and the
financial crisis of a country affect its service facility and behaviour of the buyers. Exchange rate
is also an important factor affecting the revenues of BMW group.
 Social factors- These are the factors that affect the manufacturing of BMW greatly. Factors like
changes in culture and demographics. However, these changes do not affect consumer's buying
capacity but it will influence the auto-mobile industry.

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 Technological factors- BMW uses innovative technologies in order to become more
competitive in the market. This has increased the advantage for BMW by increasing the
profit margin.
 Environmental factors- The climate change significantly impact the business of
BMW. These factors will affect the transportation due to emission of harmful gas, non-
recycling components etc.
 Legal factors- These factors are crucial to the business environment as the interest of
the customers, behaviour and satisfaction primarily depends upon such factors. This
could lead BMW to go through different issues that can affect business of the company.

Swot Analysis
Strengths The group has three brands under it namely BMW, MINI and Rolls Royce.
These are the premium cars manufactured by the group It also manufactures
bike and engines of aircraft and marine vessels.
Weaknesses The company has very few strategic alliances and collaborations. Even though
it expand huge amount on R&D, alliance with other competitors become
necessary for making a strong market standing.
Opportunities BMW can increase its sales by introducing new series in the different existing
segment. Customers always look for diverse choices while buying a product.
Hence, this will give customers more choices to choose from.
Threats: There are many companies out there manufacturing inexpensive cars by
offering advanced features. This is a major threat to BMW. Apart from this,
the company has other rivals in the same segment of luxurious cars such as
Mercedes, Audi etc.

Porter's Five Forces Model
 Power of buyers- A customer go through all these elements before buying a product
and the decision is greatly influence by these. BMW has creates attractive catalogues
and Boucher to attract more people.
 Power of suppliers: Any delay from the supplier's side will delay the delivery of the
final product to the customer. This may increase the manufacturing cost. BMW is
concerned about the best services with excellence in products by keeping the cost low
and provide high quality parts

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 Threat of substitutes- BMW could face number of issues like government may impose
restriction for fuel emission and other environmental hazards due to its cars. However,
this risk is low because people prefer this brand over other premium cars brand.
 Power of competitors: BMW has already started to manufacture and launch
environment friendly and hybrid cars by embedding innovative technology. Whereas,
its competitors are way behind in case of hybrid cars.
 Threats to new entrants- Other than huge investment, highly qualified and skilled
employees, engineers, designers will also be required. BMW has one of the best
employees, engineers, technicians and designers, therefore this risk is low as only few
can compete BMW.

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 BMW Mission: “The BMW Group is the world's leading provider of premium
products and premium services for individual mobility.”
 BMW Vision: “To be the most successful premium manufacturer in the industry.”
 BMW's Strategic Capabilities:
 Engineering Excellence
 Value-added Workforce
 Brand Management
 Innovation
 Customer Focus

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 BMW is very well aware about the environment hazards therefore, it will invest more
into this area. This will increase its sales as this strategy will leave a positive impact in
the minds of people. Also, the company is looking to make more collaborations with
major cars manufactures to remain the leader in the auto-mobile industry and to
improve the brand image of it. The company can consider to add more smaller cars into
this segment. As there are buyers, who might be interested and look for variety in the
this class, so they will get more options to choose from. This will ultimately, increase
the customer base by providing such cars at cheaper price

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 The group (BMW) is financially sound and produces huge number of cars every year
across the world (Baines and et. al., 2012). From the analysis of past and current
strategies along with the future strategies will require number of resources at big level
to achieve the objectives of it. The company has plans to increase the number of
collaborations in the form of joint ventures.
 Funding: BMW will be putting millions of euros into start-ups to develop innovation
and become a leading company in this industry.
 Human Resource: Also, the number of personnel's will be high as the company has a
target to launch at least 25 e-vehicle models by 2025 .

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 Infrastructure: It shows that, the production units is done at large scale. The company
is proposing to launch new models with better quality and also to increase the number
of cars manufactured in the units.
 Technology: Due to its importance in a car, the company shall take utmost care while
making the budgets for allocating the funds
 Suppliers: Therefore, BMW should choose them wisely by considering the fact to keep
the costs minimum.
 Information: BMW will have to ascertain the details about the customers buying
patterns, their needs and demands, choices in the brand, their future demand etc.

Conclusion
 From the above PPT, it has been concluded that, that, strategic management plays a
vital role in the success of an organisation. Using this, organisation can make a proper
coordination between all of it's components easily. Strategic planning help an
organisation to make steps for achieving their aims and goals. It is necessary for an
organisation to monitor their strategies so that they can make changes in order to
achieve it successfully. Also with this, organisation has to make changes in the level of
their resources so that they can accomplish their future targets and make the financial
position stronger.

References
 Goffin, K. and Mitchell, R., 2016. Innovation management: effective strategy and
implementation. Macmillan International Higher Education.
 Gaubinger, K., Rabl, M., Swan, S. and Werani, T., 2015. Innovation and product
management. Innovation and product management: A holistic and practical approach
to uncertainty reduction, pp.83-113.
 Shabbir, M., 2015. Innovation and competitiveness lead to industrial trade.
 Mahr, D. and Lievens, A., 2012. Virtual lead user communities: Drivers of knowledge
creation for innovation. Research policy. 41(1). pp.167-177.