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Department and assessment information:
School Name: School of Business
Assessment title: Strategic Management Plan of BMW
Course Title: Masters of Business Administration
Module Title: Strategic Business Futures
Module Code: BM4211
Year of Study: 2023

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 ASSIGNMENT 1

BMW’S STRATEGIC MANAGEMENT PLAN 2023

TEAM ….

4th November 2023

NAME OF THE STUDENTS- STUDENT ID

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Table of Contents
1 EXECUTIVE SUMMARY ............................................................................................................................................................................ 4
2 INTRODUCTION ......................................................................................................................................................................................... 4
3 COMPANY OVERVIEW/ INTERNAL ENVIRONMENT ANALYSIS ........................................................................................................... 4
3.1 About the Company ............................................................................................................................................................................................ 4
3.2 Internal Environment Analysis Using Value Chain Framework ....................................................................................................................... 5
3.2.1 Primary Activities .......................................................................................................................................................................................................................... 5
3.2.2 Support Activities ....................................................................................................................................................................................................................... 7
4 BMW’S EXTERNAL ENVIRONMENT ........................................................................................................................................................ 8
4.1 PESTLE Analysis ................................................................................................................................................................................................ 8
4.2 Porter’s 5 Forces Analysis ............................................................................................................................................................................... 11
Threat of New Entrants (High) ........................................................................................................................................................................................................ 11
Buyers' Bargaining Power (High) .................................................................................................................................................................................................... 11
Suppliers' Bargaining Power (Low) ................................................................................................................................................................................................. 11
Threat of Substitutes (High) ............................................................................................................................................................................................................ 11
Intensity of Competitive Rivalry ....................................................................................................................................................................................................... 11
5 TOWS MATRIX ......................................................................................................................................................................................... 11
6 BMW’S CORPORATE STRATEGY.......................................................................................................................................................... 13
7 BMW’S BUSINESS STRATEGY .............................................................................................................................................................. 13
Differentiation ............................................................................................................................................................................................................... 13
Focus Differentiation .................................................................................................................................................................................................... 13
8 CONCLUSION/RECOMMENDATION ...................................................................................................................................................... 13
9 REFERENCES .......................................................................................................................................................................................... 14

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 1 EXECUTIVE SUMMARY
The aim of this report is to draw up a strategic plan for BMW that would help the company to achieve its long-term
goals and objectives. We examined the current trends and challenges within the global market and the automobile
industry, as well as the internal operations that affect the business.

We employed different analytical frameworks, including PESTLE and Porter’s 5 Forces to draw out the
opportunities and threats that exist in the general and industry environments respectively, and determined the
company’s areas of strength and weakness by using value chain analysis framework to analyse BMW’s internal
activities. Using the TOWS matrix, we made recommendations on how to exploit the company’s strengths, take
advantage of its opportunities, minimise its threats, and remove its weaknesses.

We also looked at the current corporate and business strategies adopted by the company, to see whether or not
these have led to business success. In the final analysis, we made recommendations of strategic choices for BMW’s
future focus using Ansoff Growth Matrix and Porter’s Generic Strategies.

2 INTRODUCTION
A Strategic Management Plan is the blueprint or roadmap that guides an organization towards achieving its long-
term goals (Maleka, 2014). It outlines the overarching strategy adapted by an organization, details the specific
measures it intends to put in place to achieve its objectives, and serves as a guide to decision-making, resource
allocation, and performance evaluation.

The success of an organization depends largely on its strategic management plan. An ideal plan should be flexible
enough to help an organization adapt to changing circumstances, gain competitive advantage, and achieve
sustainable growth and success.

3 COMPANY OVERVIEW/ INTERNAL ENVIRONMENT ANALYSIS

3.1 About the Company

BMW (Bayerische Motoren Werke) is a world class producer of premium automobiles and motorbikes, providing
financial and mobile services to its customers. Headquartered in Munich, Germany, it was founded in 1916 as an
aircraft engine manufacturing company, but assumed its current name in 1917 and started producing automobiles
in 1928.

The company is sectioned into BMW Automotive, Motorcycle and Financial Services with 48 investment lists, and
a workforce of 149,475 as at December 31, 2022 (BMW Group Report, 2022). Its automotive leading brands are
BMW, MINI and Rolls-Royce. BMW’s manufacturing network includes over 30 production sites worldwide, with
global sales network spread across over 140 countries (BMW Group Report, 2022) – See Figure 1 below.

FIGURE 1: BMW GROUP PRODUCTION NETWORK 2023: OVER 30 PRODUCTION SITES IN 15 COUNTRIES

Source: BWM Group, Website (2023).

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 BMW envisions itself as the leading and most sustainable manufacturer of premium mobility products, and aims to
attract the best and high-class customers in its production of engines, motorcycles and vehicles that are sustainable
and climate-neutral. Its competitors include premium brands like Audi, Lexus, and Mercedes Benz.

Its total annual revenue of €142,610 million for fiscal year 2022 shows the company’s solid financial position and
high market share (BMW Group Report, 2022). Figure 2 below shows its financial performance in the year 2023 to
date. The company’s revenue for the first 3 quarters of 2023 was €112,530 million, a 9.2% increase over the
previous year. It achieved a strong performance in the third quarter, evidenced by a solid increase in sales, and
achieved an EBT margin of 10.6% for the quarter and 11.9% for the 9-month period ending in September 2023,
exceeding the set margin of 10% (BMW Group, 2023). The forecast shows an expectation of positive development
for the fourth quarter.

FIGURE 2: BMW’S FINANCIAL PERFORMANCE TABLE – JANUARY TO SEPTEMBER 2023

Source: BMW, 30 September 2023 Quarterly Statement

3.2 Internal Environment Analysis Using Value Chain Framework

Value chain analysis will be used to analyse BMW’s primary and support activities below.

3.2.1 Primary Activities

Inbound Logistics: Logistics is responsible for all aspects of the delivery network, from obtaining raw materials
to producing the final cars. To ensure a steady supply of raw materials and spare parts for its production, BMW
operates one of the world's most advanced supply chains, working with a complex network of approximately
12,000 intermediaries and suppliers in over 70 countries (Luckow, 2020). It depends on a world-wide network
of over 100 suppliers of auto parts for its production. About 43% of these suppliers are based in Germany or
German- based affiliated companies, and 34% based in other European countries with a fairly balanced split
of 55/45 between Western and Eastern European nations respectively (Investopedia, 2023).

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FIGURE 3

Source: BMW Annual Report, 2022

Figure 3 shows the distribution of its direct and indirect purchasing in 2022 in terms of volume and cost. The
practice adopted by BMW is to procure vehicle components from sources that are in proximity to its
production facilities whenever feasible. As a result, it maintains local teams in its key purchasing markets to
enable prompt response and adaptation to the unique circumstance in each market.

Operations: BMW focuses on digitalisation, aiming to achieve 100% electromobility by 2031. Thus, beginning
with its main plant in Munich, it is restructuring its plant operations to upgrade from combustion engineering
technology to full electric power (BMW Group Report, 2022). To revolutionalise production, BMW is
introducing BMW iFactory to all its plants worldwide. The approach is summarised as Lean, Green and
Digital, for efficiency and flexibility, sustainability, and data transparency respectively (BMW Group, 2022).

It follows the economic model of circular economy in its operations by ensuring that products and materials
are designed, produced, and consumed in a way that prioritizes sustainability, reuse, and recycling to reduce
its impact on the environment (BMW Group Report, 2022). These initiatives include investing in renewable
energy sources, producing more electric and fuel-efficient vehicles, and recycling waste materials (BMW
Group, 2023).

Outbound Logistics: Outbound logistics refers to the movement of finished goods outside. In addition to
overseeing the planning and design of the logistics network, plant yard, and port terminal facilities, BMW's
Vehicle Distribution Centre (VDC) is responsible for the outbound logistics chain, from the point of assembly
to dealer delivery. BMW uses a connected logistics approach to integrate its inbound and outgoing logistics,
and relies heavily on ocean transportation, as almost 7,000 containers with 31 million components are
shipped daily (BMW Group, 2023).

Marketing and Sales: BMW uses a marketing strategy that focuses on understanding and exceeding
customer expectations by using innovative technology to create products that appeal to their emotions,
providing personalised customer care for a unique experience (BMW Annual Report, 2022). BMW sells not
just a product but a lifestyle that customers want to buy into.

According to Liu (2022), BMW has continuously upheld a strong level of brand awareness globally. The
corporation has consistently pledged to deliver the highest quality and innovation in order to build substantial
brand recognition and consumer trust. Outstanding pre-sale support and superb construction quality entice
buyers to buy. Product marketing is handled by digital and web platforms (BMW Group, 2023).

Digital platforms such as My BMW and MINI App enables direct interface with customers (BMW Annual
Report, 2022). Without limitations, sales associates at BMW retail partners in over 60 markets may provide
consumers with advice and close deals on cars from anywhere. For instance, they can use a shared screen

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 to help a customer configure their dream car over the phone, or they can even offer the consumer a live tour
of the cars they have in store. This deepens customer relationships, as customers are not only able to
interact with their vehicles, but also with the company and dealers, and receive offers tailored to their needs.

Figure 4 below, provides information on BMW Group’s worldwide automobile sales in the year 2022. The
statistics shows China emerging as the primary sales market for BMW, accounting for about 33.1% of total
sales for Rolls-Royce, BMW, and MINI. About 793,500 such vehicles were purchased by Chinese customers
in that year, which is more than triple the number bought by Germans (Statista, 2023). This is indicative of
the potentials that exist in the Chinese market.

FIGURE 4: BREAKDOWN OF BMW GROUP’S WORLDWIDE AUTOMOBILE SALES IN 2022 BY REGION

Source: Statista, 2023

Services: According to Cross (2023) AI enhances the performance and aids productivity of customer service
workers. Using AI to generate and enhance services has positively increased BMW’s competitive advantage,
like getting detailed information of a specific car model for customers and keeping good relationships to
retain them. The use of AI also makes innovative impact and drives positive changes in the company to
meet current business trends (Kshetri, 2023). Its services include providing financial support and leasing
services for its cars and motorcycles to individual customers and businesses. This segment operates
worldwide in over 50 countries (BMW Group, 2023).

3.2.2 Support Activities

Human Resources: The recruitment, training, retention and general management of employees, is a
strategic opportunity for the company as it helps to increase and maintain a good workforce and workflow.
Vrontis, et al (2020) argues that Artificial Intelligence (AI) impacts on HRM strategies in general. One of such
positive strategy for the HR is the training and retention of employees, of which the 2022 employee training
and development amounts to €416million. This has been successfully achieved at the BMW group as it
considers both temporary or part time staff and apprentice as employees. This creates room for easy
retention into the company since 2019 (BMW group 2022). This further saves costs and time for the
company.

Information Technology: The competition in automobile companies like BMW is highly fringed upon
technology. The 2022 annual report shows a total capital expenditure of up to €10,610,000 (BMW Group
Report 2022), evidencing how advanced and best standards are expensive and keep the company as a star
in the market. The advent of AI has also been employed to the advantage of the company as it breaks new
grounds in technological advancements for latest models in areas of entertainment, communication
interface, etc. and in monitoring security systems to gain competitive advantage (Braw, 2023).

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 Research and Development (R&D): BMW records 13 locations for research and development in different
nations worldwide. It has contributed a great deal to the economic growth of Germany, where it is
headquartered, as it is considered one of Europe's technologically developed and digitalised countries
(Okano-Heijmans, et. al, 2023).

The innovative advantages gained from the company's systemic culture on advancement in the new model's
features are a major selling point, especially for existing customers and new markets. The company's latest
financial report (2022) depicts a high trend of R&D expenditure of €7,178,000 in 2022, as against €6,870,000
in 2021 and €6,279,000 in 2020, showing an upward annual trend.

Purchasing: This unit is responsible for sourcing materials and services with the finest quality, to meet the
premium standards of BMW’s offerings (BMW, 2023). They also help to maintain strong relationships with
the company’s various suppliers to ensure that their supply chain solutions are sustainable, efficient and
cost-effective.

Compliance with due diligence in its supplier selection is ensured through regular assessments at the
supplier’s region, based on the company’s sustainability standards for the supplier network. Where a supplier
fails to meet the required standards, they are required to implement agreed corrective measures, which are
later verified by internal assessors and external third-party inspections (BMW, 2023). This increases
transparency and therefore represents a major source of value creation, quality and innovation for the
company. An example is the effort made towards sourcing for cobalt from the Democratic Republic of Congo
(DRC), which included providing local training to meet responsible mining safety regulations in the country,
and providing 70 to 95% of access to education for nearby communities (BMW, 2022).

4 BMW’S EXTERNAL ENVIRONMENT

The external environment encompasses all the activities that are outside an organisation’s control which
affects the business. This includes the general or macro environment and the task/industry or micro
environment. We use PESTLE framework to analyse the former and Porter’s 5 forces for the latter, to identify
the opportunities and threats in the environment.

4.1 PESTLE Analysis

Here, we would analyse the political, economic, socio-cultural/demographic, technological, environmental,
and legal factors that affect BMW.

POLITICAL

Factor Implication
Proposed ban on sale of diesel and petrol vehicles: As part of its Threat: The implication for BMW is the

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commitment to reducing carbon emissions and combating climate need to adjust their production lines
change, the UK government has proposed a ban on the sale of new diesel and develop advanced electric vehicle
and petrol vehicles, including all hybrid and plug-in hybrid vehicles technologies to meet the
(Gov.UK, 2020), to be fully implemented by 2035 (What Car?, 2023). implementation deadline.

Government backing for electric cars: In a bid to promote the deployment Opportunity: Directly impacts BMW's
of electric vehicles (EV), governments are providing backing for companies approach and financial performance in
manufacturing them and customers buying them in the form of subsidies, the EV market.
grants, and other incentives (International Energy Agency, 2021).
The war in Ukraine has been a major source of supply chain disruption for Threat: Supply bottlenecks for
businesses that depend on raw materials from that region (Business Wire, semiconductor components, and
2022). restricted availability of materials such
as wire harnesses for production.
UK and EU's efforts to onshore lithium-ion battery production: In Opportunity: Positive impact on
recognition of the critical role that advanced battery technologies play in BMW's manufacturing of electric
many industries, especially with regard to electric vehicles and renewable vehicles, as the risk of supply chain
energy storage, the United Kingdom and its counterparts in the European disruption associated with
Union are actively making efforts to localize the manufacturing of lithium- international trade would be reduced
ion battery within their borders and establishing a national supply chain and essential components can be
for these batteries. In the case of the UK, it aims to reduce its dependence
available from more reliable local
on imports and improve local production, so as to enhance its energy
sources.
security (Bridge and Faigen, 2023).

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 ECONOMIC

Factor Implication
Predictions of growth in the word’s economy presents opportunities for Opportunity: This will impact on
BMW’s business interests to thrive. A report by PWC forecasts that within BMW’s strategies to adapt to the
the next three decades, emerging markets such as China and India would dynamics of local markets and explore
take 1st and 2nd places in world GDP rating, while advanced economies the opportunities these may offer.
such as the US and the UK would recede to 3rd and 10th places respectively;
and that the EU will fall beneath 10% of world GDP share (PWC, 2017).
More so, it is projected that China's gross domestic product will exceed 58

E
trillion U.S. dollars by 2050 (Statista, 2022).
Cost of living crisis: The current cost of living crisis in Europe is putting a Threat: Higher living costs could have a
strain on consumers’ finances, and high inflation rate increases the cost knock-on effect of reduced
of everyday essentials, leaving consumers with less disposable income consumers’ purchasing power, slower
and making it difficult for them to make large purchases like cars. In the sales growth, and ultimately affecting
UK for example, despite prediction of a slow fall in inflation rate, it profitability and future expansion
remained at 6.7% since September 2023, which is significantly higher than plans.
the long-term target of 2% (Reuters, 2023).
Higher interest rates: According to the IMF, central banks worldwide have Threat: Borrowing costs will become
initiated the most significant sequence of interest rate hikes in decades more expensive, resulting in in credit
over the past two years, in an effort to control inflation. On average, risk or reduced debt servicing ability
policymakers have increased rates by approximately 400 basis points in on the part of individual and corporate
advanced economies since late 2021 and roughly 650 basis points in borrowers. This could affect BMW’s
emerging market economies (International Monetary Fund, 2023). financial services patronage.
The erratic situation in the world’s economy and the energy crises has led Threat: This could potentially hinder
to an increase in the price of raw materials. There is also the growing production of electric vehicles and
competition for raw materials such as lithium, cobalt, vanadium, etc., impact on its price as production cost
required to move electric mobility forward. (International Energy Agency, would be high.
2022; Jones, et al., 2020).

SOCIO-CULTURAL/DEMOGRAPHIC

Factor Implication
Dwindling European population: According to statistics, the European Threat: A dwindling EU population could
Union is grappling with an aging population, where one out of every five be a threat to BMW’s market and affect
individuals is aged 65 or older. Coupled with this is a decline in the birth sales and growth rate in the region.
rate from 10.2 live births per 1,000 population in 2001 to 9.1 in 2020
(Eurostat, 2023). Thus, there has been a negative natural population
change in the EU for almost a decade. On the other hand, this decline
has recently been masked by the net positive impact of migration from
other countries (Statista, 2023).

S
Predictions of income levels shows that certain regions of the world Threat: Income levels influence vehicle
would have very high population of low-income earners. In India for affordability. Higher-income earners
instance, it is forecasted that by 2035, nearly 215 million people would may opt for luxury vehicles, while those
earn an annual income ranging between zero and 1,144 U.S. dollars on lower income may prefer products
(Statista, 2015). that are affordable and fuel efficient
(Bhat and Verma, 2023), thus affecting
the demand for such range of BMW’s
products.
Global population distribution: As of mid-2022, the world population Opportunity: A growing population in
reached 7.92 billion, with about 60% living in Asia, the most densely the Asian continent is a viable ground
populated continent in the world. Furthermore, as of mid-202, China the that BMW could explore to sell its
most populous country, with around 1.4 billion people. offerings.

HR trends: Predictions are that new HR trends will emerge, such as Opportunity: BMW could explore this to
companies offering child care benefits as incentives to attract parents to their advantage in their HR strategy.
apply to job vacancies; and companies reconsidering their policies on
sick leave to include mental health due to hybrid and remote work
arrangements that increase the risk of occupational burnout (Business
News Daily, 2023).

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 TECHNOLOGICAL

Factor Implication
The invention of electric and hybrid technologies has led to a Opportunity: BMW could exploit these
transformation in the automotive industry. The use of automation, innovations to gain competitive
Artificial intelligence (AI), and robotics can help to optimise operations advantage in the sector.

T
and lead to greater efficiency (Business News Daily, 2023).
The availability of augmented and virtual reality technologies is Opportunity: This could be a useful
becoming more widespread (Business News Daily, 2023). marketing tool to create unique
experiences for customers.
The use of AI and data analytics enable big data collection by Opportunity: The information gathered
organisations, and provide valuable customer insights which can be used through this technology can be used to
for personalisation and customisation (Business News Daily, 2023). make marketing more effective and to
make internal processes more efficient.
Dearth of public charging infrastructure: A 2023 report by Mintel Threat: It could directly impact on
revealed that a third of prospective buyers of electric or hybrid vehicle BMW’s sales, in terms of reducing the
are worried about the dearth of public charging infrastructure (Mintel number of people willing to buy electric
2023). This could impact their propensity to make a buying decision, if vehicles.
there is no significant improvement in the availability of charging
infrastructure.

LEGAL

Factor Implication
Regulations on emission as imposed by the government are Threat: BMW must comply with these
increasingly becoming stricter. For example, the EU has at present regulations and focus on production of

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placed an emission cap of 95 grams of CO2 per kilometer and aims to vehicles with low or zero emissions to
achieve a 37.5 percent reduction in CO2 emissions from passenger cars meet required standards and remain
by 2030 relative to 2021 (Matušovičová, 2022). competitive.

There are varying laws guiding labour and quality standards in the Opportunity and Threat depending on
different countries where BMW operates, to which they must conform. how it is handled by the company.
These border around employee rights, health and safety standards,
living wage, etc., which invariably impacts the business. For instance,
German law requires BMW AG to have half the members of their
supervisory board from labor unions (Synder, 2014). While this could
create inclusivity in the company’s decision-making process, it could
also present a challenge in reconciling potentially divergent interests.

ENVIRONMENTAL

Factor Implication
There are now more global concerns about climate change, global Opportunity: BMW’s efforts to redirect its

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warming, and environmental degradation. People are altering their operations towards eco-friendliness
behaviour to protect the environment such as opting for biking as a would lead to increased Sustainability
means of transportation to minimize their fuel usage, carrying reusable Ratings for the company, and increased
utensils to steer clear of disposable plastic forks, or retain their trust and brand loyalty on the part of
recyclable waste until they can responsibly recycle it, rather than consumers.
disposing of it in standard trash bins (Johns, et al., 2023).

The push for sustainability has influenced consumers' buying behavior, Opportunity: This may result in an
increasing their desire for sustainable and environmentally-friendly increase in BMW’s market share in the
products (Sharma, Aswal, and Paul, 2023). The result is a notable European automotive market,
transition from demand for traditional combustion-engine cars to contributing to its overall success and
electric and hybrid vehicles. profitability.

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4.2 Porter’s 5 Forces Analysis

The industry environment of BMW using Porter’s 5 forces analysis include factors such as threat of new
entrants, buyers’ bargaining power, suppliers’ bargaining power, threat of replacements and intensity of
competitive rivalry.

• Threat of New Entrants (High): Initial investments which are high, and significant entry hurdles in the
automobile sector have historically discouraged new entrants. However, the emergence of Electric Vehicles
(EVs) has upended this narrative and drawn new competitors eager to profit from the rising demand for
environmentally friendly transportation (International Energy Agency, 2022). Competition is heightened by
the inflow of new rivals, notably in the electric car market. In order to preserve market dominance, traditional
manufacturers like BMW must now not just compete with long-standing rivals but also with agile
newcomers.

• Buyers' Bargaining Power (High): The power dynamics in the automobile market have changed because
of consumer preferences, which are driven by a thirst for innovation and a demand for distinction. As more
consumers expect experiences rather than simply cars, their negotiating power has increased. To meet
and surpass these expectations, BMW, which is recognised for its dedication to innovation, must constantly
raise the bar. Producing cutting-edge automobiles is difficult, but so is creating a brand experience that
appeals to the sophisticated tastes of today's auto buyers (Dobrin, 2021).

• Suppliers' Bargaining Power (Low): Quality suppliers are drawn to BMW because of its strong brand, but
this strength also presents a special set of difficulties (BMW, 2023). Supplier talks are crucial because of
the dangers associated with dependency on certain components (Bruijl, 2018). It is crucial to strike a careful
balance between diversifying sourcing to reduce risks and utilising brand attractiveness to draw top-tier
providers. A reliable and cost-effective supply chain is ensured by successful agreements, protecting
against possible disturbances that could trickle down into the manufacturing processes. One strategy used
by the company is the recycling of raw materials from nickel, lithium, and cobalt used for high voltage EV
batteries at their China site (BMW, 2023).

• Threat of Substitutes (High): BMW must constantly adapt due to the low danger of alternatives, which is
being fuelled by the popularity of EVs and other forms of alternative mobility. In order to maintain market
share, BMW must not only react to but also foresee and influence new trends (Kukkamalla, et al., 2020). It
becomes crucial to take a proactive approach to sustainable technology and alternate transportation
options. This entails making wise bets on the development of electric vehicle technology, looking into
alternative fuels, and keeping an eye on changes in customer preferences towards more environmentally
friendly modes of transportation.

• Intensity of Competitive Rivalry: With the introduction of participants in the EV industry, the automotive
sector, already characterised by fierce rivalry from tenacious competitors like Audi and Mercedes, is
experiencing further upheaval (Musoneraand, 2019). In this environment of increased competition, BMW
must strategically position itself. It becomes essential to differentiate via innovation, design, and
performance. To stand out in a crowded and intensely competitive industry, BMW must concentrate on its
distinct value offer and use smart branding and marketing.

5 TOWS MATRIX
All the opportunities and threats from outside the company, and the strengths and weaknesses from within
the company are summarised below using the TOWS analysis framework; and there are strategic directions
provided accordingly for each section.

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 INTERNAL FACTORS

STRENGTHS (S) WEAKNESSES (W)

1. Strong brand identity built over many
1. High cost of production and
years of being in the industry.
maintenance of electric vehicles
2. Outstanding and high standard product
2. Steady increase in research
features.
expenditures.
3. Dedication to luxury, innovation and
3. Rising cost of logistics-related
sustainability.
issues.
4. Enhanced performance and
4. Disruption in supply chain.
productivity by use of AI
5. Systemic culture on model
advancement.
6. Offers unique charging services to its
EV buyers.
7. Responsible sourcing.
8. Establishing a closed cycle of raw
material reusage that reduces total
dependency on suppliers.

OPPORTUNITIES (O) S-O STRATEGIES (Leverage S to W-O STRATEGIES (Counter W by

1. Government backing for electric
cars.
2. UK and EU's efforts to onshore
lithium-ion battery production.
3. Consumers' increasing desire for
sustainable and environmentally
friendly products.
4. Invention of electric and hybrid
technologies, automation, AI and
EXTERNAL FACTORS
maximise O)
• Boost marketing initiatives to increase
market share in emerging markets in
China and India through its strong
brand identity, and promoting the
brand's dedication to luxury and
innovation to appeal to changing
customer tastes.
• Leveraging on customers’ desire for
exploiting O)
• Leverage on government backing for
electric cars in the form of subsidies
and other incentives to reduce the
high cost of production.
• Disruption in the supply chain can be
reduced by leveraging on the UK and
EU's efforts to boost local production
of batteries.

robotics. • Leveraging on technology to deal

5. Availability of augmented and eco-friendly products to drive with the disruptions experienced in
virtual reality technologies. electromobility initiatives and increase global supply chains by adopting
6. Predictions of growth in the EV sales.
world’s economy and emerging cloud-based sourcing and planning
• Take advantage of the growing software to streamline procurement.
markets.
population in China by increasing
7. Increase in Global population
distribution, especially in Asia. marketing efforts to increase demand
8. Positive HR trends. for products and boost sales.
• Using augmented and virtual reality
technologies in its marketing efforts to
create unique experiences for
customers.
• Taking advantage of automation, AI
and robotics technology to obtain a
competitive advantage in the industry.

S-T STRATEGIES (Leverage S to W-T STRATEGIES (Counter W and T)

THREATS (T)
1. Proposed ban on sale of diesel
and petrol vehicles.
2. Stricter government regulations
on emission standards.
3. The war in Ukraine and the
resulting supply chain disruption.
4. Cost of living crisis and rising
inflation.
5. Higher interest rates resulting in
credit risks.
6. The erratic situation in the
world’s economy and the energy
crises leading to increased cost
of raw materials.
7. Dearth of public charging
infrastructure for electric
vehicles.
8. Heightened competition by the
inflow of new rivals in the
automotive industry.
9. Predictions of high population of
low-income earners in certain
regions of the world.
10. Dwindling EU population.
11. Dangers associated with
dependency on suppliers of
certain components.
12. High threat of substitutes.
minimise T)
• Leverage on the AI enhanced
performance of their products and
systemic culture of model advancement
to stay ahead of their competitors.
• Using its commitment to sustainability
goals to ensure compliance to
government regulations on emission
standards and targets.
• Providing charging services as
incentives to eliminate worry on the
part of potential buyers about paucity of
charging infrastructure.
• Using innovative technology to develop
products that stand out among other
substitutes in the market.
• Using raw material recycling strategy to
overcome total dependency on
suppliers.
• Managing cost effectiveness by
streamlining the supply chain,
shortening lead times, working
closely with suppliers and using
digital technology for maintenance
and real time monitoring.
• Staying ahead of the proposed ban
on sale of diesel and petrol vehicles
by committing to its 100%
electromobility target ahead of the
deadline.
• Adopting a culture of foresight
enables stability and relative
independence from economic
fluctuations and related socio-
demographic factors.

12
6 BMW’S CORPORATE STRATEGY
Corporate strategy encompasses the approach that an organisation adopts towards achieving its long-term goal.
BMW’s strategy is strongly hinged upon Diversification and Product development. Although their current market
share of the global automotive industry is high – being rated among the top 10 automobile manufacturers (BMW,
2023) – there are potentials and opportunities to further grow the business as detailed in the Ansoff Matrix below.

Product

Present New

Market Penetra on Product Development

BMW already has a large market share BMW pursues a systemic culture of product
in Europe, the US, and other regions. development, using innova on and AI
However, the current trend of infla on enabled technology. They steadily roll out
Present

and higher interest rate in the market
could poten ally affect sales and
growth. To prevent this outcome, they
could adopt the use of Ar ficial and
Virtual Reality in their marke ng
strategy to create increasing awareness
among their customers.
Market
more advanced products to meet customer
requirements and current trends. And their
loyal customer base is an advantage for
them in this regard. Their focus on
electromobility is a step in the right
direc on.

Market Development Diversifica on

BMW’s market share in developing The company prides itself as highly

economies such as Africa is rela vely low diversified because of its innova ve
because of the high cost of purchase and capacity. It has the capability to thrive in
maintenance, rela ve to their new markets because of its well-
New

compe tors like Toyota who offer established brand. The emerging markets
cheaper alterna ves. Just like they are in China and India, and the increasing
increasing their share in the Chinese popula on in Asia would create a fer le
market, they can do so for other regions ground for their products to thrive.
by targe ng the affluent class in these
regions, e.g., the poli cal class and the
bourgeoises.

7 BMW’S BUSINESS STRATEGY

BMW’s strategy has been summarily identified under Differentiation and Focus Differentiation based on their
activities in different locations, as we discussed below.

Differentiation: This refers to the uniqueness of a product, and its distinctive features that makes it stand
out from others in same market, for more profit. BMW’s differentiated products include motorbikes, and
luxurious autonomous-drive cars, that flexibly meet the needs of new trends. Some of its distinctive features
include automatic emergency brakes, warning for lane departure, collision warning, detection for blind spot,
parking assistance, adaptive cruise control, and surround view camera system (BMW, 2023).

A good example of this distinctive model is the BMW iX2 with eDrive technology, all-electric, all-wheel drive
system, which is a digital champion with special features, and enables customers to enjoy a unique
experience (BMW, 2023).

Focus Differentiation: This has to do with the uniqueness of a product for a target market or niche. BMW’s
primary targets include the following:
• High income earners who value performance and luxury in their vehicles;
• Driving enthusiasts who are stimulated by a dynamic driving experience;
• Tech-savvy consumers whose appeal is to enjoy vehicles with the latest technology; and
• The new direction of electric vehicles also gives the brand an edge and more options to existing and
new customers who are environmentally conscious.

8. CONCLUSION/RECOMMENDATION
BMW’s activities and structure which supports this strategy are as follows.
- BMW is committed to the task of continually reviewing and addressing its activities, with annual and
quarterly reports as evidence.
13
 - Finance, Customers, Processes (planning and adaptability), Learning and Development are key
factors for executing extensive plans, with unique designs.
- The company’s “Mind, Body and Soul” slogan expresses how new features are developed to connect
customers with their products emotionally and customised (BMW, 2023). This further ensures brand
loyalty and prevents switching.
- Digital innovation and a strong presence online are also marketing strategies to retain customers, and
keep them engaged with new experiences.
- BMW films is also an avenue for showcasing special and distinct features, as well as engaging with
customers, thereby boosting brand image (BMW, 2023).
- The company also considers inclusiveness and diversification by actively engaging in equality,
through the managerial positions given to women, with a record of 22% of female managers in 2022.

BMW can position itself for ongoing growth and success in the rapidly changing automotive industry by adopting
a strategy that combines differentiation, focus differentiation, diversification, market penetration, product, and
market development.

Following the findings from the foregoing analysis, we summarily recommend as follows:

1. Adopting a different marketing strategy (using VR and enhanced AI) to create awareness in regions of
low presence.
2. Taking advantage of the fertile grounds in the emerging markets in China and India would boost their
future growth.
3. Putting strategic measures in place to target the high class of developing regions of the world can spread
BMW’s reach and enhance growth.
4. Ensuring that their futuristic EV target is feasible, as it is a drive in the right direction.

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