Laws and regulations are strongly affecting the automotive sector; increasing restriction aimed to the environment preservation and pollution abatement are being applied, especially in the European countries, with a major impact on automobile manufacturers, and MINI (Bmwgroup, 2010)
Economic growth on certain countries and a strong economical crises of others are the two variables which strongly affect the automotive sector; as mentioned before BRIC countries are experiencing growth with a resulting increasing buying power which would positively affect the sector, but at the same time an economic downturn in the US is generating unpleasant consequences.
In the automobile sector, it seems there is an evident change in the customer choice; fuel efficiency and low emission are becoming more and more important in the car choosing process. (Gstatic,2011)
There is a really important trend, which sees R&D taking a crucial role; increasing technology with the aims to gain competitive advantages are widely applied from automobile manufacturers and BMW.
Porter's Five Forces
Threats of new entrants:
The threat of new entrants in case of the automobile industry is less as large capital cost is required to set up a manufacturing plant and assembly liner. Also it takes time for new entrants to get a place and the reputation in the minds of the consumers. (MINI have existed for a long period of time and in turn have had the advantage of building this reputation).
Threats of substitutes:
BMW has a brand image of being powerful and luxurious. It is positioned in the exclusive car range where there exist many substitutes for BMW like mercedes, GM and Toyota. Thus the threat of substitutes for BMW is high.
Bargaining power of buyers:
BMW and its competitors are positioned as an exclusive product range. Here the bargaining power of buyers is high because the consumers can decide the...
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