In this paper, I will cover a SWOT analysis for BMW, which will identify the capabilities that BMW have that will enable it to sustain a competitive advantage in the automobile industry. In order to analyze BMW itself, I had to analyze the industry and it’s complexities first. Automobile Industry Structure:
Automobile industry has changed a lot in the last four decades especially in the period extending from 1990 to 2000. Consolidation was moving forward fast and six international giant companies owned almost 69% of the automobile market. European market specifically faced a furious competition, the high technological advancement and the level of quality achieved by most manufacturers has decreased the opportunity for product differentiation. In addition, consolidation has increased the productivity. These factors made price competition the prime strategy for manufacturers even if this will mean a loss to the company like Ford Europe losses reached 117 $ m in 1999. In today’s world customers, environmental constraints and petrol prices created an insensitive environment and obliged many midsized companies, which made BMW rethink their strategy in order to survive. What does BMW do?
Bayerische Motoren Werke Group (BMW) is one of the world’s leading luxury automobiles makers. The company was founded in Germany; it employs 820,000 workers in their plants in Germany, U.S.A and South Africa. In 1959 the Quandt family bought BMW, when the company was going to go bust, now they own 46% of the BMW shares. BMW turnover was around £15.5bn; its productivity reached 820,000 vehicles in 2000. The powerful reliable performance and their luxurious design made BMW “The ultimate driving machine”. Until 1990 BMW strategy was to focus on the high performance of its products however the high competition and the rapid development of its competitors forced BMW to think of expanding its range of products to join the ranks of the auto industry super power. In 1994, the...
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