Last time, we conducted a SWOT analysis of Ferrari, the Italian sports car manufacturer. Now we will take a closer look at the SWOT analysis of BMW, the famous automobile industry giant.
BMW is a German automobile manufacturer with headquarters in Munich. In 2017, it was the world’S 14th-largest producer of vehicles. The company has a significant history in the field of motorsports, with many of its models being featured in the Isle of Man Race. A symbol of mid-tier luxury
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In this blog, we will learn about the company and its strengths, weaknesses, threats and opportunities, i.e., conduct a full SWOT analysis of BMW. Before we begin that, let us first learn more about the company, its history, products, competitors and financial position.
About BMW
BMW (Bayerische Motoren Werke AG) is the world’s leading superior manufacturer of motorcycles & automobiles. BMW is a German automobile manufacturer with headquarters in Munich. In 2017, it was the world’S 14th-largest producer of vehicles. The company has a significant history in the field of motorsports, with many of its models being featured in the Isle of Man Race. It is a global automobile manufacturer that sells its cars in over 140 countries. The company is the 3rd best car manufacturer in Germany. They manufacture their vehicles in Dingolfing, China, Austria, Great Britain, Landshut, Berlin.
In 2007 January, BMW started its operation in India; their manufacturing plant is in Chennai and the warehouse is in Mumbai. BMW India is a subsidiary of BMW Group, under the leadership of Vikram Pawah as the CEO and President of the company. The newly incorporated subsidiary of the group began formally in 2012 and was behind the introduction of MINI, a luxury hatchback brand of BMW, to India, which shows the increasing importance of the Indian luxury cars market.
| Founder | Camillo Castiglioni, Franz Josef Popp, Karl Rapp |
|---|---|
| Year Founded | 7 March, 1916 |
| Origin | Munich, Germany |
| No. of Employees | 133,778 (2019) |
| Company Type | Public |
| Market Cap | €278 billion (2020) |
| Annual Revenue | €98.99 billion (2020) |
| Net Profit | €3.857 billion (2020) |
Products of BMW
The German automobile giant engages in the production of:
- Bikes
- Automobile Parts
- Assembly of Cars
- Car Designing
Competitors of BMW
The automobile industry is one of the most competitive market spaces and BMW faces both domestic and global competition such as:
- Mercedes Benz
- Audi
- Nissan
- Aston Martin
- Chrysler
Now that we have learnt about the company’s background and dealings, let us turn our attention towards its SWOT analysis.
SWOT Analysis of BMW
SWOT analysis is a framework for analysing and identifying a company’s strengths, weaknesses, opportunities and threats. It helps in identifying where a company is lacking, and what are the opportunities for a company so that it can work accordingly and minimize its risk.
Let us begin our deep dive on the SWOT analysis of BMW:
1. Strengths
- Global Reach: BMW is a global automobile manufacturer that consists of three brands: BMW, MINI, and Rolls-Royce. Aside from cars, BMW also offers a variety of motorcycles and aircraft engines.
- Strong R&D Department: Technological advances have made it a clear winner in the premium segment. Its continuous process development & innovation has helped it stand out in the industry.
- Brilliant Advertising: The company has been regarded as a luxury brand in the automobile industry through its creative promotional strategies. BMW also has a strong digital presence on Instagram and Twitter. They have a huge following and they use these channels for the promotion of the company through high-quality content. If you wish to learn the new age techniques of social media advertising, check out our Facebook and Instagram Ads Course.
- Highly Trained Workforce: Around 100,000 highly skilled individuals have been trained to work continuously in more than a hundred countries to differentiate BMW’s service from its competitors.
- Large Product Portfolio: BMW has a wide range of product categories, including SUVs and luxury cars. The company’s product range and design stand out in terms of quality and design.
2. Weakness
- Limited Market Size: BMW sells luxurious cars at very premium pricing which is affordable majorly in the developed Nations what countries like India can’t afford such premium pricing. the majority market of India is medium class people and hence the market size reduces for BMW.
- Increasing Debt: The debt level of the company is more than euro 50 billion due to large investments in automated driving and electric vehicles. If there are high debt levels, companies cannot able to invest more funds in research and development, which will hamper the growth of the company in the long run.
- Reducing Market Share: MINI and Rolls Royce sales are less compare to BMW cars. The company is majorly dependent on the car. If new different products entered the market or if consumer’s tastes changed company may suffer from loss.
- Electric Cars: The coming future generations would prefer electric vehicles over petrol cars hence the company needs to innovate in this direction to stay relevant with time.
3. Opportunities
- Newer Models: BMW needs to enter new markets and innovate with the help of technology. The company can expand its portfolio by launching new series.
- Lower Price Segment: The company can come up with the lowest price segment in which it will make affordable cars for the medium class people, which will expand the customer base for the company.
- Increasing Affluence: With the changing consumer lifestyle and choices, people are moving towards luxurious and premium brands, which is a major opportunity for BMW to increase its sales and generate much more revenue.
- Expanding in Emerging Markets: Developing economies are the future of global growth. By investing in these markets, BMW has positioned itself to take advantage of the opportunities that await them.
4. Threats
- Tough Competition: As BMW is in the automobile industry it faces tough competition from other premium brands like Audi and Mercedes. The top competitors of BMW are Audi, Mercedes Benz, Volkswagen, Toyota Motor Corporation, Nissan Motor, Honda, Hyundai, Daimler, Porsche.
- COVID-19: The company has suffered major losses due to the pandemic, consumer choices have changed a lot, people are not preferring luxurious cars because of the losses suffered in the pandemic. This is a major threat for BMW as the company entirely depends on the premium segment.
- Increasing Petroleum Prices: Problems and increasing rates of petrol is another major problem for the company, people are moving towards electric vehicles. The company needs to innovate in the segment to sustain its position in the market.
- Increasing Regulations on Cars: With increasing environmental concerns from across the world, government regulations are getting tighter in terms of reducing the carbon footprint of consumer automobiles. This directly influences the sales and revenue of BMW, which can hamper the growth of a company.
Now that we have taken a deep dive into the SWOT analysis of BMW, let us conclude our findings in the section below.
Conclusion
BMW is the leading automotive sector with a strong reputation, provides high-quality services globally, has a good brand image. The company has created a strong digital presence by increasing awareness, finding a new audience, engage them on different social media platforms by creating high-quality content. It has a strong market presence as well, due to the century-long goodwill of the brand. Yet as it is beset by increasing competition, the company needs to invest more in the innovation side to stay relevant. They need to enter new markets to beat the competition and sustain their position in the automobile industry. The SWOT analysis of BMW has revealed the fact that even the most well known companies can be suffering.
Even the best brands can suffer at the hands of increasing competition in the market. In the face of rising competition, impactful marketing becomes a necessity for the company. Hence, gaining a professional understanding of digital marketing is essential if you wish to work in highly competitive industries such as automobiles. If marketing is something that interests you, you should definitely check out the Post Graduation Programme in Digital Marketing offered by IIDE that will help you transform into the managerial candidate in the marketing department of companies.
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