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BMW is one of the leaders in the vehicle production market, producing cars and motorcycles. It was founded in 1916 and is based in Germany but is valued and purchased worldwide. For over a century, the company has built a strong reputation and is known for its high-quality approach to production, innovative technology, and superior customer experience. BMW produces millions of vehicles every year and is clearly one of the most valuable car-producing brands in the history of humanity. It produces vehicles for different audiences under five brands, including BMW, Mini Cooper, Rolls Royce, Motorrad, and Husquarna. Every company needs qualitative analysis to improve and stay competitive. This work aims to analyze BMW company’s advantages and disadvantages to form proper directions for development. BMW needs to move into new markets to expand its audience.
Bavarian Motor Work is a German company with headquarters in Munich. There. Their cars and motorcycles are manufactured in Germany, including factories in Dingolfing, Berlin, and Landshut, as well as in Austria, Great Britain, and China. It is considered the third-best car manufacturer in Germany (Shastri, 2021). BMW also planted its production in Chennai, India, in January 2007. BMW India is a subsidiary of the BMW Group that has already manufactured luxury cars, including Mini Coopers, for ten years. Bavarian Motor Work is “the largest luxury car automaker and the 12th largest automaker in the world” (Jurevicius, 2022, para 2). It produces more than two million cars yearly, with primary markets represented by China, France, Germany, Great Britain, and the United States of America (Jurevicius, 2022). There are more than 133 thousand employees that represent the company around the world (Shastri, 2021). In 2020, their annual revenue numbered almost a hundred billion euros, with a net profit of almost four billion euros (Shastri, 2021). However, in 2021 their net profit has quadrupled and reached sixteen billion euros (Jurevicius, 2022). It demonstrates their ability to face difficult situations and grow.
BMW’s main competitors are Mercedes-Benz, Nissan, Audi, Chrysler, and Aston Martin. It is crucial to know and understand the companies that compete with BMW to analyze the situation deeply and improve the strategy in the future. The Mercedes-Benz company is considered to be the number one competitor of BMW. The model variety of both companies is sufficient and covers many segments. The BMW engines are lighter, allowing their car owners to save fuel and drive more comfortably. BMW’s vehicles are also slightly more affordable than Mercedes’. At the same time, Mercedes-Benz is ranked eighth in the world’s most valuable car brands list with a valuation of forty-seven billion dollars, while BMW is thirteenth at forty-one billion dollars (McIntyre, 2018). Mercedes’ 2020 annual revenue numbered almost 155 billion euros with a four billion euros net profit (Leggett, 2022). Even though Mercedes-Benz’s revenue was almost twice more significant than BMW’s, its net profit was on the same level. These statistics demonstrate the strengths of BMW’s financial system and business strategy. However, there is an increasing debt that appeared because of BMW’s investments in electric vehicles and automated driving. It is more than fifty billion euros and still growing, which can slow down the future growth of the company.
It is crucial to analyze the company’s strengths and weaknesses to become better and develop. One of BMW’s strengths is its global reach and variety of products. The company consists of three automobile brands, as well as produces motorcycles and aircraft engines. However, its weakness is in the fact that they sell cars at a premium price that is not affordable for everyone. That reduces their sales in countries whose population is primarily middle class and poorer countries. BMW is strong in advertising their product and social media, using high-quality content to promote the company. Another advantage is the workforce that has made this company even better through the years, headed by CEO Oliver Zipse. The company has more than 100 thousand trained and skilled workers to represent the company in more than a hundred countries. The wide range of their portfolio is also a valuable strength of the company. BMW produces many categories of vehicles with various designs and remarkable quality. At the same time, its weakness is the electric cars which will only develop with time and get more of people’s attention. BMW needs a structured plan to stay competitive in this field.
There are opportunities that the company can face to improve its sales, secure its future, and stay competitive. Firstly, it is always appropriate to use technology and innovations to present newer models. Entry into new markets can become a fresh impulse for the company and make it even more valuable. For example, the movement toward the market of electric cars is vital because “every company needs to begin to plan the possibility that fossil fuels could be completely depleted” (Gable, 2020, p. 4). Another way the company can expand is the lower price segment of their cars. That way, BMW can make its product affordable for the middle class and widen its audience.
BMW can invest in countries with developing economies and their markets to position itself as an innovative country and gain more money in the future. According to the prescriptive approach to strategy, these opportunities and goals are vital for the company’s future. The prescriptive approach to strategy will be more appropriate because it helps to understand the future perspectives of the company using data from the market. However, some threats can affect the company’s plans, including COVID-19, which is still not fully understood by the world, massive competition, and increasing petroleum prices. These factors must be considered to continue BMW’s growth and improvement.
It is recommended that the BMW company pays more attention to the manufacture and promotion of electric vehicles because it is a fast-growing and prospective field. It is noticed that consumer preferences are changing, and people demonstrate “an increasing interest in electric vehicles” (Deloitte, 2020, para. 5). BMW needs to take into account current trends to stay on the market. BMW’s main complexity in this direction is the amount of money and other resources that need to be invested to achieve its goals. However, it can be seen that the company is moving toward this market and investing in electric car production, but the changes need to be made at the right time to keep the customers and increase its audience. It is significant that it needs to be achieved faster to eliminate possible problems for the company in the future. According to Burnes’ Framework of Change, BMW needs to focus on large-scale transformation, more precisely, structures and processes of their company’s work. The approach that is recommended for BMW to use is the Bold Stroke. Their work with employees is phenomenal but it is crucial for the company to enter new markets to survive and stay competitive.
To conclude, BMW is a giant in the car production prime segment, and it will be according to current tendencies, it will only grow and develop. The main courses the company needs to follow are those that lead to audience expansion, such as electric car production and the less expensive car segment. It is crucial to know the strengths and weaknesses and become better and stronger. The company is competently developed, and only the best is ahead with such goals.
References
Deloitte. (2020). 2020 global automotive consumer study. Web.
Gable, N. (2020). Are electric cars the future? English Department: Research for Change – Wicked Problems in Our World. Web.
Jurevicius, O. (2022). SWOT analysis of BMW 2022. Strategic Management. Web.
Leggett, D. (2022). Mercedes-Benz AG posts strong 2021 financial results. Just Auto. Web.
McIntyre, D. A. (2018). Automakers Toyota, Mercedes, and BMW top the list of the world’s most valuable car brands. USA Today. Web.
Shastri, A. (2021). Detailed SWOT analysis of BMW – Complete with company overview, history, and competitors. IIDE. Web.
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