BMW, or Bayerische Motoren Werke AG, is a German automobile manufacturer best known for its high-performance sports cars and motorbikes. Munich is the location of the company’s headquarters. It was founded in 1916 as Bayerische Flugzeug-Werke, a manufacturer of aviation engines (1). In July 1917, the company changed its name to Bayerische Motoren Werke, and it started manufacturing bikes in the early 1920s. BMW made its debut in the motor industry in 1928. By the end of the twentieth century, BMW had solidified its position as a luxury automotive manufacturer (2). It is well-known and related with the highest levels of luxury and comfort available today. Members of the Quandt family retained a large amount of control over this corporation. Their key markets are China, the US and Europe (1).
SWOT ANALYSIS of BMW
The internal strategic strengths and weaknesses of BMW shapes its capabilities and challenges. For example, the company’s global activities allow it to benefit from economies of scale, which helps it compete. The commercial opportunities and threats of BMW are based on the state of the automobile industry and the markets in which it competes. So, BMW must come up with ways and strategies to grow and keep the company safe before the competition does. If BMW doesn’t solve the problems raised in this SWOT Analysis of the company, it won’t be able to grow or stay alive in the long run.
Strengths of BMW
Dynamic System: BMW has more than a century of engine-building expertise. For its automotive manufacture, it is undoubtedly one of the most fascinating automobiles to drive. People know BMW as a company that focuses on the thrill of driving a high-performance vehicle. It is the world’s best-known car brand for its responsiveness and power, precision handling, and high safety standards. (4).
A Highly Successful Brand: BMW has grown into a prominent and financially successful organization by focusing on the needs of its customers. According to the company Brand Finance, BMW was named the world’s 21st most valuable brand in 2019. (5).
Strong Reputation: The reputation of a luxury brand plays a significant role in the buying behavior made by consumers. It is one of the most well-known brands in the world, and it is synonymous with quality. BMW was named 11th strongest brand in the world by Inter Brand in 2019 out of the top 100 global brands (5).
Eco Friendly Motors: BMW has always attempted to make an effort to manufacture ecologically friendly engines, and this has continued today. It has produced almost 20 distinct kinds of autos, each of which emits just 140 grams of CO2 per kilometer traveled. Moreover, it also continues to develop more fuel-efficient automobiles while also investigating new types of fuels that are both environmentally friendly and cost-effective. (3).
Weaknesses of BMW
Negative publicity: During the COVID-19 epidemic, BMW quickly reduced its personnel, reduced salary, and applied for government assistance. However, it announced a $1.8 billion dividend for 2020. This was considered as greedy amid a global crisis. BMW has also been implicated in false emission claims in other markets. (6).
Multiple Lawsuits: BMW is involved in a number of lawsuits, including an obstruction case in South Korea and a collusion case involving emissions in Europe, among others. A key issue is that the corporation is often found in violation of the law, which makes it difficult for customers to place their faith in the organization (4).
Very Expensive: BMW vehicles are both expensive and difficult to keep up with the latest technology. In order to perform maintenance on the technically advanced system, it is necessary to employ skilled technicians and dealerships. It only makes use of the highest-quality materials and components available. (4).
Small Portfolio: Competitors like as Volkswagen have a large number of well-known brands in their portfolios. BMW, on the other hand, has a small portfolio that includes just BMW, MINI, and Rolls-Royce automobiles, with no other brands. (3).
Opportunities for BMW
Focusing on Emerging Market: According to Thomas Schaefer, Head of Volkswagen Africa, the potential for 3 to 4 million new autos to be sold in Sub-Saharan Africa is a considerable increase from the roughly 420,000 vehicles delivered in the region in 2017.With its capacity to capitalize on underdeveloped and emerging markets, BMW can enjoy a competitive advantage. (4) .
Eco-Friendly Mobility: Consumers that are environmentally concerned are rising at an alarming rate, as is the need for more ecologically friendly modes of transportation, which is driving this trend. Having established itself as one of the world’s top producers of electric cars as well as practicing eco-friendly motors, BMW is well-positioned to capitalize on the expanding demand for such kind of electric vehicles. (4).
Provide Flexible Options: Consumers of the future desire for flexible mobility. In order to reach this wealthy target population, BMW has to create a vehicle rental company or build a car sharing software. (3).
Expand into Self Driving Sector: The BMW Group is seeking collaborations to join the self-driving, autonomous car market. But these collaborations have had varied effects. A first mover will have an edge in the autonomous car market. BMW, with its research and development capabilities and technology-driven production, is well positioned to lead in this industry. (6)
Threats for BMW
Rising Manufacturing Costs: The rising costs of producing automobiles are impacted by a broad variety of conflicting and complicated variables. Because to a rise in production costs, BMW’s second-quarter profits fell by 48 percent in 2019. (6).
Tariff Issues: In 2018, BMW and other German manufacturers traveled to the White House for trade negotiations, which resulted in a halt to tariffs on European automobiles in 2018. The United States is quite likely to slap duties on BMW and other European automobiles in the future, if trade tensions continue to escalate. (4).
Warning Signs of a Global Economic Crisis: In times of economic difficulty, customers minimize or remove non-essential expenditures such as the purchase of a luxury car like a BMW. As a result of the devastation wrought by the virus, several major economies have already entered a recession in recent months. (7).
Pandemic Effects: Manufacturing has come to a grinding stop owing to a scarcity of raw materials, and BMW and other automobile manufacturers have reduced their financial projections as a result of the virus. If the situation continues, BMW’s strong profitability may be completely erased (7).
RECOMMENDATIONS
This Swot Analysis tells us that brand like BMW should target rising markets, especially Asia. Local brands will help it create manufacturing facilities in Asian markets. Additionally, it may perform better in Asia by offering mid-range automobiles To win the competition, it must also stay ahead of market trends. Furthermore, it must take into account its electric car performance in order to compete with Tesla. BMW must also reduce expenses. Besides, it should strive to preserve its reputation as a fast and sports vehicle. The company’s profits from gasoline-powered automobiles must also be taken into account.
REFERENCES
- https://www.bmwakron.com/bmw-history-bmw-dealersip-near-me.html
- https://www.britannica.com/topic/Bayerische-Motoren-Werke-AG
- https://www.edrawmax.com/article/bmw-swot-analysis.html
- https://howigotjob.com/swot-analysis/bmw-swot-analysis-and-its-competitors/
- https://www.press.bmwgroup.com/global/article/detail/T0297083EN/bmw-group-continues-to-grow-sales-and-market-share-in-may?language=en
- https://brandongaille.com/bmw-swot-analysis/
- https://www.reuters.com/article/us-bmw-results-q1/bmw-cuts-outlook-sees-coronavirus-pain-lasting-all-year-idUSKBN22I0JE
