A SWOT Analysis of BMW Corporation

A SWOT Analysis of BMW Corporation

SWOT evaluation of BMW, a Munich-based auto and motorbike manufacturer founded in 1916, is the topic I’ve chosen for this assignment. They stand for Bayerische Motoren Werke by their initials. They are the world’s largest manufacturer of luxury vehicles and are renowned for its emphasis on excellent engineering, customer satisfaction, and safety (Cai et el., 2019). Their rivals include Volkswagen, Audi, General Motors, Jaguar Land Rover, Jeep, Mercedes, Tesla, and Toyota. Strengths It is ranked third by the reputable source Interbrand among the most valuable automobile brands worldwide. On Forbes’ list, it comes in second. BMW’s competitors here are only Mercedes and Toyota. BMW is one of the most well-known automakers, and they pride themselves on creating their cars to provide an unmatched driving experience in luxury motoring. This essay will perform the SWOT analysis of the BMW company, discuss the analysis result on threats and opportunities, and explain how to identify opportunities and overcome the threats.

Strengths

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The company’s reputation for dependability and consistency in delivering top-notch goods and giving consumers what they refer to as “the ultimate driving experience” is likely its biggest asset. Both revenue and profit have increased consistently. From €80.4 billion in 2014 to €92.2 billion in 2015, then to €97.5 billion in 2018 was the increase in revenue. Profit increased to €7.2 billion in 2018 from €5.8 billion in 2014. BMW’s emphasis on employee motivation and engagement, attained through training programs and various rewards, is another crucial organizational asset. They are dedicated to hiring the top personnel and are ranked 10th on Forbes’ list of the world. As a result, the number of employees increased from 122,244 in 2015 to 134,682 in 2018, with more than 15,000 working in research and development at sixteen facilities throughout fifteen nations. This shows the company’s significant expenditure in research and development, particularly concerning environmentally friendly car technologies such as fully electric and hybrid vehicles and autonomous vehicles. From 2013 to 2015, the first electric vehicle from BMW, released in 2013, was the third-best-selling vehicle globally. Additionally, the business only competed with Toyota when it unveiled the first of its several generations of plug-in hybrids in 2014. Few other manufacturers’ revenue sources are as regionally diverse as BMW’s, with the majority coming from China, where it has strong licensing agreements, rather than its native market of Germany with local automotive manufacturers, including the Brilliance Auto Group, which assembles and markets BMW automobiles (Anggoro et el., 2019). These relationships have helped to ensure the company’s consistent sales growth and the best employers.

Weaknesses

Low levels of product differentiation are possible due to the company’s portfolio of models, which includes premium cars, medium-sized to tiny cars, and a variety of crossovers. Any truck, bus, or other heavy- or light-duty commercial vehicle is not covered. The corporation must refrain from marketing to clients with lower incomes who are unlikely to be able to afford luxury vehicles because they sell their vehicles at premium prices. Therefore, the business depends on selling premium cars. Unfortunately, the high operating and production costs associated with the luxury vehicle market challenge BMW. Additionally, the business is heavily indebted due to its investments in cutting-edge technologies required to produce autonomous electric vehicles. As a result, between 2014 and 2015, its debt increased most dramatically.

 

Opportunities.

The desire for smaller cars and SUVs will rise in response to the inevitable rise in gas prices, while demand for larger cars and SUVs will fall. BMW’s lineup of medium and compact automobiles is well-positioned. Considering this, BMW must continue to build solid international alliances with regional producers. To compete with Tesla and its sizable fleet of cutting-edge vehicles now on the road, it must also continue investing heavily in the research and development of autonomous vehicle technology. In addition, it has a great opportunity due to the weakening of the euro exchange rate, especially in countries where it is the only currency. This currency exchange rate does not affect the profits and revenues of the company (Dobrin, 2021). The weakening of the euro affects other county exports, and therefore, it benefits the organization. The frequency and timing release of the new model significantly impact automotive companies to secure a large market share. There is a case to be made for more regular release of improved models, though, given the growing consumer expectations regarding in-car technology and the industry’s competitiveness. BMW is in a good position to accomplish this.

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Threats.

New legal requirements, quick technological advancements, and market saturation are a few of the major concerns BMW must contend with. For its classes of cars, there is an excess of production capacity worldwide. The market is already full (Sankhwar et el., 2018). These classes are becoming more competitive, and new players are entering the market. BMW must remain committed to upholding its prestigious brand and its good reputation for value. Because of how quickly technology is developing in areas like autonomous driving, BMW must forecast the future and invest in R&D to stay competitive. Finally, the company’s manufacturing costs will undoubtedly rise due to arbitrary new laws designed to reduce emissions of “greenhouse gases.”

Result of SWOT analysis

Threats and opportunities are essential to a SWOT analysis since they highlight your company’s strengths and shortcomings. They significantly help assess the company’s potential for success on the same strategy in the organizational strengths. Finding your market threat is made easier with the use of a vulnerability evaluation. These two are related since you frequently highlight company operational and marketing accomplishments while improving or minimizing weaknesses. SWOT analysis significantly results in opportunities such as the available opportunities, trends of advantage, and how to change strength to opportunity. In addition, the result of a SWOT analysis on threats includes identifying things that can harm the organization, exposing the weakness of the organization, and identifying what the competition leads (Karyono & Agustina, 2019). As a result of the analysis, the company will be able to use the opportunities to make more profit significantly. In addition, it will be able to work hard and be creative to introduce new strategies to avoid possible threats.

Prioritizing identified opportunities and overcoming threats

The stages to prioritizing your opportunities are as follows: Determine every opportunity. On each sticky note, place them there. Search for unique possibilities. After giving each one a score, map it. That can all be done simultaneously. To better understand, there are three axes: X stands for fit, Y for market attractiveness, and Z for opportunity size. Take the first opening and Give it a grade after you’re done with it as a group. Then, proceed to plot the remaining sticky notes. The fit axis should have three columns, and the attractiveness axis should have two rows. Divide your grid into parts. Your primary growth plan is anything that is extremely desirable in the upper right-hand quadrant and that you are now doing. They have the largest potential reward while posing the least risk. The so-called huge bets are the next area of emphasis. These tactical choices are both very appealing and a little out of the ordinary from what you’re doing right now. After pursuing your main development prospects, order these opportunities according to priority, moving progressively from right to left. You may transfer significant opportunities from the doing to the not doing side through an acquisition. And even if you’re taking the chance now, exercise care if it doesn’t seem appealing. For the organization to overcome the threats that are discussed above, the organization needs to do the following; to overcome the threats the organization should plan and be prepared for the threats, help-seeking from other organizations, mentors or knowledgeable individuals, request and accept support from other organizations, the organization should also have a positive mindset and think big to overcome the threat (Nichols et el., 2018).

In conclusion, the essay has performed the SWOT analysis of the Bronxville organization and discuss the result of the analysis on threats and opportunity and explain how to identify opportunity and overcome threats. China and North America are the two biggest auto markets in the world, and BMW is well-positioned in the luxury car market there. The future success of the business depends on raising both sales and earnings. It intends to achieve this by selling environmentally conscious, driverless automobiles so its customers can drive in the most opulent manner imaginable. BMW has a distinct competitive advantage over its rivals and is well-positioned to handle its upcoming challenges.

References

Anggoro, S., Purwanti, F., & Gunawan, B. I. (2019). Strategies for sustainable ecotourism development in the marine waters of Bontang City, Indonesia. Aquaculture, Aquarium, Conservation & Legislation, 12(5), 1779-1787. https://www.cabdirect.org/cabdirect/abstract/20203011067

Cai, Z., Wang, A., Zhang, W., Gruffke, M., & Schweppe, H. (2019). 0-days & mitigations: roadways to exploit and secure connected BMW cars. Black Hat USA, 2019, 39.

Dobrin, G. I. (2021). Analysis of risks and opportunities in the BMW Group. Journal of Public Administration, Finance and Law, 10(22), 164-168.

Karyono, O., & Agustina, K. (2019). Determining the priority strategy in the implementation of E-Government through a SWOT analysis model. Budapest International Research and Critics Institute-Journal (BIRCI-Journal) Vol, 2(2), 66-74. https://www.researchgate.net/publication/333004018_Determining_the_Priority_Strategy_in_the_Implementation_of_E-Government_Through_Swot_Analysis_Model

Nichols, R. K., Ryan, J. J. C. H., Mumm, H. C., Lonstein, W. D., Carter, C. M., Shay, J., … & Jackson, M. (2020). Chinese Advances in Stealth UAV Penetration Path Planning in Combat Environment [Nichols]. UNMANNED VEHICLE SYSTEMS & OPERATIONS ON AIR, SEA, LAND.

Sankhwar, P. L., Maurya, V. K., Mishra, D., Sankhwar, S. N., & More, N. S. (2018). Biomedical WasteEnvironmental Threats and Its Management. In Recent Advances in Environmental Management (pp. 465-481). CRC Press.

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For this assignment, write a paper in which you do the following:

Perform a SWOT analysis on an organization you are personally involved with. This could be your place of employment currently or in the past, a school, volunteer organization, church, etc.
Discuss the results of the SWOT analysis with emphasis on the opportunities and threats you’ve identified.
Explain how you would prioritize identified opportunities and how you plan to overcome any threats/obstacles you’ve identified.

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