Detailed PESTEL Analysis of BMW
In this PESTLE analysis of BMW by EdrawMax, readers will learn many critical factors that have led to the success of the BMW corporation.
1. Lead-in
BMW is one of the biggest manufacturers of luxury cars, and it has already created a position in the biggest market. The company has a strong brand image and millions of loyal customers worldwide. Multiple macro conditions have acted on the success of the brand. PESTEL BMW can show the factors behind the brand's position in the current market while providing an idea about its chances of future growth.
2. About BMW
2.1 Introduction of BMW
BMW is one of the top car manufacturers in the world, and they have customers all over the globe. The Germany-based brand is well-known for its luxurious cars and has earned the position of a crucial player in the global automotive industry. The brand owns two more luxury brands, namely Mini and Rolls Royce. BMW group is trying to bring in more advanced technology in their cars to cement their position as the tech leader in the automotive market.
The current automotive industry is highly dependent on technology. Therefore, innovation has become the driving power for brands. The PESTEL BMW can show the varied external factors responsible for the brand's current position. Some basic details about BMW are as follows:
2.2 Overview of BMW
| Company Name: | BMW (Bayerische Motoren Werke AG) |
| CEO: | Oliver Zipse |
| Company Type: | Automotive manufacturer |
| Year Founded: | 7 March 1916 |
| Employees: | 118,909 (2021) |
| Annual Revenue: | 131,607 million USD (2021) |
| Founder: | Camillo Castiglioni, Franz Josef Popp, Karl Rapp |
| Area Served: | Worldwide (except Russia) |
| Headquarters: | Munich, Germany |
| Operating Income: | €16.060 billion (2021) |
3. BMW PESTEL Analysis
BMW considers being one of the top service providers in the mobility field. The company already has a loyal customer base attracted to BMW's sophisticated products with advanced technologies. The brand has already earned a name for itself, becoming a global brand. Different macro factors can impact the business of BMW. PESTEL BMW can show how factors like politics, economy, society, technology, environment, and law can have roles in establishing BMW at its present status.
Political Factors:
As a global brand, BMW often gets impacted by political conditions and governmental decisions. Stable political conditions and the government's stand about foreign investment can be favorable for BMW. Here are some political factors that influence the brand's business:
- Like most other businesses, political instability is a concern for BMW. Political instability can directly impact their business. People's buying habits may change if there is turmoil in the countries they have invested in, thus, affecting their business. BMW's business is at risk due to its political condition in countries like China, Russia, and Brazil.
- Trade laws and investment regulations can impact the business of a company. BMW operates worldwide, and therefore free trade zones, labor laws, and the government's approach towards foreign investors also play a significant role in the business expansion of BMW.
- Some of the recent issues have impacted the business of BMW severely. The trade war between countries like the USA and China affects the automobile business, and BMW is also not an exception. This trade dispute has burdened automobile companies with financial pressure. At the same time, Brexit has impacted the business of BMW negatively.
Economic Factors:
The growth of any business is directly related to the economy. As BMW has customers all over the world, the global economy contributes to the expansion of its business. Here are some ways the economic factors have worked on the company's sales number:
- BMW makes luxury cars, and the automobile market is highly competitive. There are multiple vital players like Toyota in the market, and the brand value of the brands keeps fluctuating. Therefore the brand cannot correctly speculate its profit, loss, and sales figure. Thus, its investments in BMW can be at risk.
- Currently, the global economy is in an unstable condition. It has created volatility in areas like currency conversion rate, GDP, etcetera. As these conditions impact people's buying habits, they may influence the growth of BMW's business. Though the economic development of 2018 in the USA favored BMW, the pandemic slowed down their business to some extent.
- BMW is a global brand, and due to its massive area of operation, the tariff plans cut down the company's profitability. In some countries, a tariff or heavy taxes are on the business and can decrease its profit.
Socio-cultural factors:
BMW customers are scattered all over the globe. Therefore, the product should consider the requirements and preferences of the customers. Specific socio-cultural ideas work on the buying habits of a person. Here are some social factors that have contributed to the business of BMW -
- The company does thorough market research before launching a product. The GDP, per capita income, society, and culture can influence people's buying habits. They also consider the nation's political and economic condition in a new product. It has helped them to increase their sales.
- Social media and other online platforms are crucial for shaping consumer behavior. BMW has a robust online presence, and they are active on various social media platforms, for which they have smooth connectivity with their customers and potential customers. Their brand image and performance history have extracted positive reviews from customers. These factors have also contributed to increasing their business.
- The social trends of owning luxury cars have increased demand in certain regions. For example, in 2020, 34% of Chinese people wanted to own a luxury car which increased to 40% in 2021. A similar mindset is evident in many Asian countries. It shows BMW has a chance to expand its business in those countries with high demand. Their top-quality safety features are adding to their increasing demand.
Technological factors:
Technological advances have brought revolutionary changes in the automobile industry. AI-based tracking services and safety setups give people a smooth and safe driving experience. Here is how technology can impact the business of BMW:
- BMW is one of the brands paying attention to research and development before bringing any car into the market. The market of the automotive industry is highly competitive, and to survive in it, BMW has chosen innovation. The brand is working on adding automatic car parking, hybrid mode, autonomous driving, and several other AI-powered systems.
- BMW is one of the brands paying attention to research and development before bringing any car into the market. The market of the automotive industry is highly competitive, and to survive in it, BMW has chosen innovation. The brand is working on adding automatic car parking, hybrid mode, autonomous driving, and several other AI-powered systems.
- Digitization has not only brought changes in the buying habits and preferences of the customers, but they have created channels for the brands to reach more people. BMW is using social media platforms to garner the attention of its customers and potential customers.
Environmental factors:
BMW is a part of the automotive industry. Therefore, environmental factors can directly affect their business. Consumers are aware of the pollution reports and ranking of cities based on the CO2 emitted by vehicles. They are more willing to take steps to keep the earth green. Therefore, BMW has concentrated on providing customers with more environment-friendly options.
- Considering that fuel-powered cars contribute to pollution and, simultaneously, the non-renewable energy sources are limited, BMW has added a hybrid mode to their products. They use less fuel than the average. They are also bringing in electric models, which are more eco-friendly.
- BMW Group has developed its cars to have a low carbon-emission rate. In recent years, BMW has decreased the CO2 emission from their new vehicles in the European market by more than 42%.
- BMW has an environment board that aims to bring sustainable practices, from the supply chain to logistics, in everything they try to reflect an environment-friendly approach.
Legal factors:
The brands engaged in businesses worldwide need to pay attention to the legal system of the countries they operate. Thus, BMW needs to keep an eye on the laws to avoid getting banned. Here are some legal factors that can have an impact on the performance of BMW -
- BMW Group uses a bunch of technologies in their cars to offer a luxury experience to the buyers. The group adheres to sets of copyright laws associated with their technologies.
- The company must comply with the labor laws and quality standards of the countries they operate in for further growth and sustainability. There are specific laws regarding the safety of the riders, which BMW needs to oblige.
- BMW has faced legal proceedings regarding the faulty engines and fires. There are multiple lawsuits against the company regarding the defective engine issues. The South Korean Government has asked the brand for compensation of $9.9 million for product failure.
4. How to Do a PESTEL Analysis in EdrawMax
- Step - 1: Preparation
- Step - 2: Template Selection
- Step - 3: Add Textual Information
- Step - 4: Customize
- Step - 5: Export & Share
If you are using the offline version of EdrawMax, open the tool in your system. If you wish to access remote files, head to https://www.edrawmax.com/online/ and log in using your registered email address. If this is your first time using the tool, you can register with your personal or professional email address. Go to 'Marketing' diagrams under Business diagram type and click on 'PEST Analysis.'
EdrawMax has thousands of free templates. Head to the Template section on the left and type 'PESTEL Analysis' to see all the pre-built PESTEL Analysis templates like Netflix PESTEL Analysis, Amazon PESTEL Analysis, IKEA PESTEL Analysis, and more. Check the template that resonates closely with your business model. Click on 'Use Immediately' to import the template's contents to the EdrawMax canvas. You can start customizing the PESTEL analysis diagram as per your requirements. If you want to draw the PESTEL analysis diagram from scratch, you can click '+.' It will open up the user-friendly canvas of EdrawMax that has several features that ease your efforts in making PESTEL analysis diagrams.
PESTEL Analysis diagram requires you to add Political, Economic, Sociological, Technological, Legal, and Environmental content so that the reader will understand what influences an organization. Use the PEST symbols from the left side and add the content to your PESTEL analysis diagram.
EdrawMax gives you ample options to customize your PESTEL Analysis diagram. From changing the background to adding content, you can customize the diagram in any way you desire. In addition to this, you can go ahead and change the background color, modify the text, add hyperlinks, add multiple pages, add images, and even add vector-enabled texts to your PESTEL analysis diagram.
Once satisfied with your PESTEL Analysis diagram, you can export it into multiple formats, including Microsoft, JPEG, PNG, Visio, HTML, and more. EdrawMax lets you share your PESTEL Analysis diagram on social media platforms, like Facebook, Twitter, Line, etc.
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5. Key Takeaways
PESTEL BMW can hint at the future potential of the company as a car manufacturer while considering its present status in the global economy. As they are a big corporation, their efficient employees, funds, and brand recognition can be favorable for the growth of their business. The PESTEL BMW shows how the macro factors can impact the business of BMW. Since BMW is a brand that operates its business worldwide, they can set the strategies likewise. It will allow them to cushion the negative impacts of external factors to retain their position in the competitive market.
Several tools in the market let you create a PESTEL Analysis diagram. However, none of them come close to the features that EdrawMax has to offer. From changing the colors to adding comments, you can do different types of customization to your PESTEL Analysis diagram. What is more amazing about this tool is the feature to import and export files in different formats, making collaboration effective and efficient. Go ahead and download EdrawMax for free today! If you wish to access remote files, head to EdrawMax Online and work remotely.
Reference
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Crowjack. 2022. A detailed and well-researched PESTLE Analysis of BMW., [online] Available at: https://crowjack.com/pestle-analysis/bmw (Accessed 28 August 2022).
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Shaw, A., 2022. PESTLE Analysis of BMW | SWOT & PESTLE Analysis., [online]. SWOT & PESTLE Analysis. Available at: https://swotandpestleanalysis.com/pestle-analysis-of-bmw/ (Accessed 28 August 2022).
