internatinal business

Topics: Financial ratio, Mercedes-Benz, Automotive industry Pages: 18 (4490 words) Published: September 24, 2013
 Executive Summary This report aims to understand markets, sources of competitive advantage and the profitability of an organisation. The organisation of choice for this report that will enable a better and practical understanding of these elements is BMW. The car manufacturing industry is one of the largest manufacturing industries and up to date, as of 2012, has currently produced over 60 million passenger vehicles. Despite the financial crisis of 2008-2009, BMW group “performed relatively well” based on their concrete brand name, product portfolio and financial position which will continue to add to their success in the automotive industry in the future. BMW has a product range which comprises of 10 luxury passenger vehicles namely the 1series, 3series, 4series, 5series, 6series, 7series, X, Z4, M and Hybrid all available on the market globally. They are ranked 14 in the world’s top 15 car manufactures as it produced 1,481,253 vehicles and earned a total revenue of Euro 60, 48 billion as of October 2011. BMW is a German originating group that produces and manufactures engines, automobiles and motorcycles as their premium segment and is one of the largest German industrial companies listed on the Frankfurt Stock Exchange. Bavarian Motor Work’s was founded by Franz Josef Popp in 1916 (Rediff.com, 2013). It has a product range which comprises of 10 luxury passenger vehicles namely the 1series, 3series, 4series, 5series, 6series, 7series, X, Z4, M and Hybrid all available on the market globally as well as the engines and motorcycles. The report includes a market analysis which entails various external factors of the environment that may enhance or hinder the survival of the BMW group. The focal point for this analysis will be centered on the PESTLE framework. This includes political, economic, social, technological, environmental and legal factors. A detailed description of all the factors is highlighted in Appendix 2 but the factors which are regarded as the most relevant will be discussed. The most relevant factors include political, economic, socio-cultural and technological. The market analysis also touches on the product life cycle which is the different stages that a product can go through in a market. Competitive advantage is another key element in this report and includes Porters 5 Wheel Dimension as well as the three main competitors (Mercedes, Lexus and Audi) along with their objectives, strategies, core competences, reaction pattern and competitive posture. The competitor analysis shows that Mercedes Benz is the prospector, Lexus as the analyser, Audi as the reactor and BMW itself as the defender based on respective strategic environment, strategic approach and resource strategy. In terms of the market position based on strategic objectives and competitive strategies, BMW is the leader, Mercedes Benz is the challenger, Lexus is the follower and Audi is in the niche. the profitability analysis was done to analyse the financial strength and health of the company two factor of which are financial ratios and metrics where used, financial ratio tools used to analyse the profitability of BMW consist of profitability ratios , liquidity ratios, activity ratios and leverage ratios. The two marketing metrics briefly analysed was the market share and product sales analysis, in concluding the profitability analysis it was found that in the period of the 5 years analysed, the company and the industry was being affected by the global recession, hence low financial ratios also victim to this was the two main competitors used to analyse market performance of BMW which are VW motors(AUDI) and Daimler(Mercedes Benz).in conclusion

1.Introduction
This report aims to understand markets, sources of competitive advantage and the profitability of an organisation. The organisation of choice for this report that will enable a better and practical...

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