BUSINESS STRATEGY PROJECT- BMW

COMPANY ANALYSIS

By

HARDIK KHYALILAL JAIN

22BSOCBL0091
Introduction:
BMW, which stands for Bayerische Motoren Werke AG, is a well-known German automaker
known for its opulent and high-performing cars. Since its establishment on March 7, 1916,
BMW has become among the world's top manufacturers, renowned for its superior technical
skills, cutting-edge technology, and distinctive designs.

With its corporate headquarters in Munich, Germany, BMW began its career building engines
for military aircraft used in World War I. They were forced to change their strategy after the
conflict ended because of limitations on German aircraft manufacturing. BMW Dixi, the
company's first automobile, was produced in 1928, and later, in the early 1920s, BMW
switched to producing motorcycles. This was the company's entry into the automotive sector.

BMW's dedication to high-quality products, precise engineering, and enjoyable driving

throughout the years has helped the business reach new heights. They are known for building
sporty, opulent cars that appeal to both enthusiasts and discriminating buyers. BMW's famous
"Ultimate Driving Machine" tagline perfectly captures its commitment to producing vehicles
that provide a dynamic and thrilling driving experience.

In the course of its existence, BMW has released a broad variety of vehicles, ranging from
small executive cars to powerful sports cars and opulent SUVs. The business has consistently
spent money on R&D, which has resulted in ground-breaking advancements in fields including
engine technology, aerodynamics, and lightweight building.

It has taken on digitization and electrification in recent years, creating electric and hybrid
automobiles and incorporating cutting-edge technology. The BMW ConnectedDrive system
exemplifies its dedication to linked services and smart features, while its "i" sub-brand
concentrates on environmentally friendly transportation options.

It is a major player on the worldwide stage and maintains production sites throughout a number
of nations. Their vehicles are highly coveted all over the world, and the blue and white BMW
insignia has come to represent grandeur, performance, and refinement.

BMW has established itself as a top luxury car maker, satisfying the aspirations of drivers
looking for the ideal fusion of style, performance, and driving pleasure, thanks to its
commitment to pushing the boundaries of automotive design and a rich tradition of
craftsmanship and innovation.
BCG Matrix:

Star Question Mark

 BMW 7 Series  BMW X3 /X5 –SUV
 Mini Coper
 BMW 5 Series
 BMW Motors

Cash Cow Dog

 Rolls Royce  BMW Z3 & Z4

Star:

There are several goods that BMW manages that are classified as Stars. For instance, the Sedan
& Touring models from the BMW Series 5 are some of the vehicles that have been performing
well. Particularly among customers worldwide, the BMW Sedan is a well-liked vehicle. Sales
of BMW Group's Sedan brand have increased significantly over the previous few years,
indicating a strong level of consumer demand, according to BMW Group (2016). Due to its
financial performance and potential for future expansion, the BMW Small is another car that
may be positioned in this quadrant. The leadership team sees its investment in BMW Mini as
a successful one since it has sold an average of 250,000 units. The firm has increased the variety
of products it offers, added new BMW small designs, and improved the performance of its
flagship item.

Cash Cow:
One of the most prominent instances of cash cow goods was Rolls Royce, a subsidiary of
BMW. This market has been a significant source of financial income, propelling the business
to expand over time. In the subsequent half of 2015, its net earnings increased by over ten per
cent. Rolls-Royce's increased demand for its cash cow is credited with this expansion (Geiger,
2016). According to DeMattia (2015), the financial results of Rolls Royce's business showed
the potential for record sales in the fiscal year 2015, with the greatest premium automobile
consumption in the US.

Question Mark:
BMW's SUV line, while lucrative, has seen a drop in its ability to generate money, which has
caused it to lose market share in the premium automobile market. In the upcoming months, the
SUV business unit could boost its bottom line. The corporation may see a gain in market share
as a result of rising SUV demand. The sector can expand further, pointing to the future
development of the SUV brand into a dominant position in the global automobile industry.

Dog:

The BMW Z3 and Z4 automobiles have been labelled as "dogs" since they haven't been able
to create the same level of revenue as other of the business's brands. The Z3 and Z4 received
unfavourable feedback from consumers because their performance fell below the bar set by
prior BMW automobiles.
SWOC:

Strengths Weaknesses

1. Strong brand image 1. High production costs

2. Diverse product portfolio
2. Limited presence in the low-cost segment

Strengths:
Strong brand image: The terms "luxury," "performance," and "quality" all apply to BMW.
Due to its track record for making the highest-quality automobiles, the firm enjoys significant
levels of consumer loyalty and brand awareness. In a survey of the world's most valuable
brands up to 2022, BMW came in at number 76 with a brand worth about $27.6 billion.

Diverse product portfolio: BMW provides a comprehensive selection of vehicles in a number

of genres, including sedans, SUVs, sports cars, electric vehicles, and motorbikes. With this
diversity, the business is better able to meet the demands and desires of a wider range of
customers.

Weaknesses:
High production costs: BMW focuses on providing high-end, feature-rich automobiles as a
premium carmaker. This focus on quality and cutting-edge technology, meanwhile, may drive
up manufacturing costs, which might hurt the business' profitability.

Limited presence in the low-cost segment: BMW is a global leader in luxury cars, but it
has little presence in the expanding low-cost automobile industry, which might limit its
possibilities for expansion and diversification.
 Opportunities Challenges

1. Electric vehicles (EVs) 1. Intense competition

2. Autonomous driving technology 2. Technological disruption

Opportunities:
Electric vehicles (EVs): Global demand for electric vehicles is surging as a result of rising
environmental consciousness, financial incentives from the government, and enhanced
facilities for charging them. BMW may profit from this trend by increasing its selection of
electric vehicles and putting money into cutting-edge technology like better battery systems
and charging options.

Autonomous driving technology: It has a lot of potential with the creation and use of
autonomous driving technologies. BMW can incorporate autonomous driving capabilities into
its vehicles and even develop additional revenue sources via transportation services by
investing in research and collaborating with other technology firms.

Challenges:
Intense competition: With major manufacturers like Mercedes-Benz, Audi, and Lexus as well
as more recent entries like Tesla regularly launching new technology and models, the luxury
vehicle industry is extremely competitive. BMW's market dominance, profitability, and
capacity for innovation may be under threat from this fierce competition.

Technological disruption: Rapid developments in automotive technology have the potential

to render obsolete current goods and techniques soon. BMW must continually spend money on
R&D to remain on top of trends and keep its competitive advantage.
Digitalization initiatives were undertaken.

1. BMW ConnectedDrive: BMW ConnectedDrive is an integrated system that uses a

variety of digital services to link the automobile, the driver, and the external
environment. It offers amenities including in-vehicle internet access, remote services
(such as locking and unlocking the car via a smartphone app), real-time traffic updates,
assistance from a concierge, & more.

2. BMW Intelligent Personal Assistant: With the introduction of an AI-powered virtual

assistant by BMW, users can connect with their cars and use a variety of features hands-
free. The assistant may deliver information, make decisions, and navigate using a
variety of vehicle functions.

3. Electrification and Hybridization: As part of its digitization efforts to adjust to the

rapidly changing automotive market, BMW has been making significant investments
in electric & hybrid car technology. In addition to hybrid versions for several of their
current models, they have released completely electric cars like the BMW i3 and i8.

4. BMW Digital Sales Channels: To give consumers greater ease and versatility when
buying a vehicle, BMW has been increasing its online sales platforms. Online
configurators, virtual showrooms, and the capability to finish some steps of the
purchasing process online are examples of it.

5. Autonomous Driving and Connectivity: BMW has been aggressively pursuing

technology for autonomous driving and enhancing connectivity in its cars. These
programmes seek to improve safety, streamline traffic, and improve customer
experience.

6. Data Analytics and Machine Learning: BMW probably uses machine learning and
data analytics to gain insights from the massive amounts of data provided by its
vehicles, clients, and other sources. The goods, services, and customer experiences may
all be enhanced using these insights.
Conclusion:
BMW, one of the world's leading automotive manufacturers, has a strong market position and
brand image, as evidenced by the SWOC (Strengths, Weaknesses, Opportunities, and
Challenges) analysis and BCG (Boston Consulting Group) matrix. Furthermore, BMW has
embraced digitization strategies to stay competitive in the rapidly evolving automotive
industry.

The SWOC analysis reveals that BMW's strengths lie in its premium brand reputation,
innovative engineering, and extensive global presence. These strengths have allowed the
company to maintain a loyal customer base and achieve sustainable growth.

The BCG matrix analysis indicates that BMW's product portfolio is well-balanced, with a mix
of cash cows, stars, question marks, and dogs. BMW should carefully manage and invest in
question marks to transform them into stars and cash cows while phasing out underperforming
models or market segments represented by the dogs.

In response to the challenges and the changing landscape of the automotive industry, BMW
has actively embraced digitization strategies. By leveraging technology, data analytics, and
artificial intelligence, BMW has improved its manufacturing processes, enhanced vehicle
connectivity, and developed smart mobility solutions. This forward-thinking approach has
allowed the company to adapt to the increasing demand for electric vehicles and autonomous
driving technologies, further strengthening its position in the market.

BMW's strong SWOC analysis underscores its competitive advantage, while the BCG matrix
highlights a well-structured product portfolio. Embracing digitization strategies has further
reinforced BMW's position in the market by enabling it to capitalize on emerging trends and
cater to the evolving needs of consumers. As the automotive industry continues to evolve,
BMW's proactive and adaptive approach will be crucial in maintaining its success and
relevance in the global automotive market.