DISCOVERY

BMW SWOT Analysis

An In-Depth SWOT Analysis of BMW

1. Background of BMW

1.1. General Overview of BMW

Company’s Name

Bayerische Motoren Werke AG (BMW)

Industry

Automaker

Founded

1913

Headquarter

Munich, Bavaria, Germany

CEO

Oliver Zipse

Revenue

EUR 96.6 billion

Profit

EUR 4.8 billion (4.6% net margin)

Competitors

Mercedes, Audi, Porche


1.2. Introduction to BMW

For the BMW SWOT analysis, it is crucial to know about its past and future planning. BMW Or Bayerische Motoren Werke AG is a German multinational corporation famous for motorcycles and luxury vehicles. Back in 1916, there was the establishment of the company as the manufacturer of aircraft engines. It continued with aircraft from 1917 to 1918 and again from 1933 to 1945. The production output of the company is 2,564,025 vehicles now. The BMW subsidiaries are Rolls-Royce Motor Cars, BMW Motorrad, BMW M, BMW Japan Corp, et cetera.


1.3. Development Timeline of BMW

1913

Foundation of BMW.

1917

BMW’s logo creation.

1923

BMW planned for the first motorcycle.

1941

The first aircraft engine by the company for the German air force.

1959

The success of the BMW 700 small car.

1972

BMW’s first plant outside Germany in Pretoria, South Africa.

2003

The first model in the Goodwood Rolls-Royce plant.

2014

Launching of i3 electric vehicle by BMW.


2. SWOT Analysis of BMW

BMW SWOT analysis can find out the strategies that can help the company to strengthen its position and maximize revenue. The company can develop its actions by considering opportunities. At the same time, the company can look for business diversification to earn long-term stability in the market.

2.1. SWOT Analysis of BMW in Detail

Strength:

For BMW, the very first step is to expand their market into high purchasing capability areas. Market penetration seems important for majority of companies. Then, only innovation could make greater progress in this industry:

  • BMW has 100 plus years of experience in engine building. Undoubtedly, it is one of the most exciting cars to drive because of its automotive manufacturing. People recognize BMW as a speed enthusiast who seeks the pleasure of handling a machine. It is the most famous brand for the engine's responsiveness and power, precise handling, and top-notch safety standard;
  • BMW has an eye-catching and timeless design that attracts classy managers, customers to speed demons. Youngsters who want to be on the sportier side love the brand;
  • The brand has successfully created a unique appeal to customers with different needs and budgets. It also has electric and hybrid high-performance models;
  • BMW’s ambition for research and development. The brand’s core strategy is to make more attractive and more efficient cars.
Weakness:

Besides its strengths, it is also crucial for a company to know its weakness. Once they identify the reasons affecting their growth, they can take the necessary steps to negate their impact:

  • BMW vehicles are expensive and complicated to maintain. The sophisticated engineering system demands specialized mechanics and dealers for maintenance. It uses all the premium quality products and parts;
  • BMW has autonomous-driving features that may not appeal to all the BMW drivers. The tagline of BMW, known as 'Ultimate Diving Machine,’ may become redundant;
  • Cheaper models like series two or X1 SUV would dilute the brand value of such premium car manufacturers like BMW.
Opportunities:

The company's performance assessment shows how they can use the available opportunities in their favor. The company can concentrate on the ones that align with their strengths. As a top-rated brand, BMW has several strengths which allow them to use many of the opportunities to ensure their growth:

  • BMW is competing with Tesla to increase its investment in electric vehicles. However, the newly built electric vehicle model known as i3 is not as attractive as Teslas. It may find it hard to compete. Tesla is enjoying high expectations from the market analysts;
  • The company must pay attention to building more cars in China as it is overtaking the U.S.A to emerge as the biggest market for BMW. By following this strategy, it can save on transportation costs and avoid importing tariffs;
  • The company should also aim at increasing strategic partnerships in the fields and critical markets to win collaboration in skill, expertise, and resources.
Threats:

In such fierce competitions, how to stay steady in this industry could be the first priority for any companies. Especially for the birth of Tesla and other electrical auto-driving car:

  • BMW is focusing on rolling out new electric vehicles. This strategy could sacrifice their sales of internal combustion cars, the cash cow of the company. EVs are costly, and they must meet the latest emission legislation;
  • The potential Brexit tariffs and China are a severe challenge in front of BMW import-export business. There is a possibility of a trade-off between losing sales volume and maintaining margins due to a no-deal Brexit outcome;
  • Finally, the automotive industry is battling hard to find new regulations on emission and safety standards. There are compliance costs, minor errors, and hefty lines to consider. All of these may lead to negative public images.

bmw swot analysis

Source:EdrawMax Online


3. Key Takeaways

The BMW SWOT analysis points out the fact that the company has numerous scopes to perform better. No doubt, the brand is one of the most reputed brands in the luxury auto industry, but a few steps with proper measurements and weighing the pros and cons may help grow their business manifold.

  1. It should work to maintain its reputation intact as a sporty and speedy car;
  2. It must consider its performance in the electric vehicle domain to fight fair and square with Tesla;
  3. The company’s income from internal combustion vehicles also needs to be considered.

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