Running Head: BUS 5116 UNIT 1 WRITTEN ASSIGNMENT

SWOT ANALYSIS of BMW

Presented to: Dr. Mukesh Prasad

U of People

Term 2
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BUS 5116 UNIT 1 CASE STUDY
Abstract

This assignment explores BMW’s viability through a SWOT analysis based upon five

questions. It concludes with brief suggestions and recommendations for BMWs navigation

through the turbulent global economic times.

Keywords: BMW, Swot analysis

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BMW Case Synopsis

Since 1916, Bayerische Motoren Werke (BMW) remains one of the leading luxury brands of vehicles

on the global market and according to research published by (MBA Skool Team

May 21, 2020) BMW is located in more than 140 countries (BMW Group News Letter, 2020). The

company depends heavily on customers loyalty to the brand to sell its products. As a large-scale

brand, BMW is worth more than $40 billion in America alone. In the category of luxury cars, BMW

rates third to Audi and Mercedes-Benz based upon ratings in (Carbuzz, 2020).

Key Issues and Underlying Issues

The period 2013 to the present has brought challenges of the magnitude, that some suggest

could be the end of BMW’s run as a leader in the luxury car industry. Competitors are manufacturing

equally beautiful and less expensive cars while consumers appetites have changed. However,

following are five questions designed to provide a brief SWOT analysis of BMW situation with an

exploration of key problems and underlying issues worth consideration as the entire world grapples

with a global recession and pandemic:

The main change that occurred in BMW since 2013 to the present time is the

company’s ability to stay in the top tier of luxury vehicles and products while expanding into new

emerging markets. Currently, BMW is still recognised for its excellence and just last year, it was rated

number 11 out of 100 of the world’s top brands based upon studies by the Interbrand Ranking

(2020). However, another 3 changes are noticeable and worthy of discussion here as follows sourced

from (BMW Group, News Letter The next 100 years, 2020):

 Company ceased making airlines and produces luxury vehicles since war planes were banned in
Germany after the Treaty of Versailles.
 Developed to become the BMW Group that manufactures motorcycles and several brands under its
growing portfolio. Innovative re-designs of all of its vehicles with emphasis on the concepts for the
mobility needs of the future.
 BMWs focus on intercultural dialogue by recognising its employees and global partnership
differences and individual needs.

 
Research reported by (Business Hub Strategy, June 10, 2020) BMW is familiar with crisis situations and

international concerns and its strength lies in its ability to constantly reinvents itself to proactively reflect the

changes necessary to grow and demonstrate Corporate Social Responsibility (CSR). Many noticeable changes
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are recorded in the company’s newsletters and reports (BMW Group News Letter, 2020) and as such BMW

changes its logo to meet the ‘digital age’ as reported by (Asia times, 2020) and is the first major change in 23

years to reflect a flatter design better suited to digital production and colours of vehicles.

BMW weaknesses company during this period are noted below with the most significant
change being its reinvention of its portfolio.

 Negative Publicity (Miller, May 14, 2020). 

 Controversial Recalls (The Associated Press, January 18, 2020). 
 Lawsuits over emissions in Europe (Nelsen, April 5, 2019). 
 Small Portfolio. Unlike similar manufacturers BMW only makes BMW, Rolls Royce and Mini
according to research by (Banks, June 18, 2019). The fact that BMW is re-imagining its portfolio for
future and mobility needs of its customers helps to maintain its excellent reputation. This change is
visionary and typical of BMW (BMW Group News Letter, the next 100 years, 2020).

At least four significant opportunities presented itself in BMW quest to stay relevant: producing eco-

friendly vehicles, expansion into the self-driving segment, development of flexible options to suit the needs of

younger consumer. The biggest change lies in BMWs recognition of emerging markets. BMW may tap new

markets such as those in the sub-Saharan African region of the world because this area alone appears to have the

potential to increase sales to 3 to 4 million new vehicles. This opportunity represents a massive surge from a

moderate number of 420,000 cars sold three years ago according to sources (Bavier, April 12, 2019). 

BMW like many mega companies is facing at least 7 significant threats to its operations:
 Changes in Demographics
 Strong Competition
 Effects of the Pandemic
 Possibility of Tariffs due to political issues
 Stiff Regulations
 Mounting Manufacturing Costs
 Looming Global Recession

The most dangerous threat might be the fact that shifts and changes in demographics

could impact BMW customer base which has been built around loyalty to its luxury brand.

Research by Press Trust (June 25, 2019) indicates that millennials are reluctant to take on the

costs associated with a BMW ownership. Should this trend continue, BMWs market share

may diminish and in turn, its target customer base and profits may be lost.

Facts that affect these issues

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BUS 5116 UNIT 1 CASE STUDY
At a minimum these issues impact BMWs viability: globalisation, differentiation,

competition, innovation, global warming, and alternative products amid a global pandemic

and looming recession.

Stakeholders: Customers, employees, global partners/countries, suppliers and its

shareholders.

Tentative Solutions to BMW key problems and underlying issues

Given the current state of global affairs, it is imperative for BMW to ensure that it is

using a “lean” operational system and pay close attention to customer complaints and

manufacturing issues.

Consequences

Failure to implement a leaner operational model could cost the company its market

share as people may not have the desire to part with cash for luxury items in the near future.

Recommendations for implementing solutions

Implementing a “lean” manufacturing and consolidation of production sites (less than

30) can ensure the issues underlying any major problems can be managed without cutting

people and product.

Conclusion
A SWOT analysis is a tried-and-true business technique to quickly capture the

strengths, weaknesses, threats and opportunities in a company. BMW remains a global force

to contend with in the world of expensive, sturdy and quality cars.

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References

Banks, N. (June 18, 2019). The Story Behind BMW, Rolls-Royce, And MINI’s Exciting Future
Product Strategy. Forbes

Bavier, J. (April 12, 2019). Auto giants battle used car dealers for Africa’s huge market. Reuters

BMW Group News Letter. https://www.bmwgroup.com/en/company/news.html. Accessed 18

November, 2020

BMW Group News Letter. (2020). The next 100 years.

https://www.bmwgroup.com/en/company/the-next-100-years.html. [Accessed 17 November,
2020].

BMW Changes Its Logo to meet the digital age. https://asiatimes.com/2020/03/bmw-changes-its-

logo-to-meet-the-digital-age/ [Accessed 18 November, 2020)

BMW SWOT Analysis. (n.d.) Retrieved from : http://www.strategicmanagementinsight.com/swot-

analyses.html

Business Hub Strategy.(June, 10, 2020). (https://bstrategyhub.com/bmw-swot-analysis/. [Accessed

17 November, 2020)

Interbrand Ranking. (2020). Best Global Brands-2019. Interbrand

Latest Luxury Car Reviews. https://carbuzz.com/cars/luxury-cars. [Accessed 17 November, 2020]

MBA Skool Team BMW SWOT Analysis, Competitors, Segmentation, Target Market, Positioning &
USP. (May, 21, 2020). https://www.mbaskool.com/brandguide/automobiles/4892-bmw.html.
[Accessed 17 November, 2020]

Miller, J. (2020, May 14). BMW mounts a robust defense of dividend payout. Financial Times

The Associated Press. (2020, January 18). BMW recalls about 357K vehicles for Takata airbag
inflators. ABC News.

Press Trust. (June 25, 2019). Millennials don’t want to own cars, prefer shared mobility: Deloitte
study. Business Standard

Nelsen, A. (April 5, 2019). BMW, Daimler, and V.W. charged with collusion over emissions. The
Guardian