COMPANY - BMW

PRESENTATION BY:
COMPANY - BMW
GROUP – 4 , M3 BBA
1. RIYA DUA 41990301718
2. VARUN KUMAR 36724401718
3. VINAYAK SUNDRIYAL 13390301718
4. VINEET KAUSHIK 13490301718
 Company Profile

• Bayerische Motoren Werke AG, commonly referred to as BMW , is a German multinational corporation which produces luxury vehicles and

motocycles .

• The company was founded in 1916 as a manufacturer of aircraft engines, which it produced from 1917 until 1918 and again from 1933 to 1945.

• BMW is headquartered in Munich and produces motor vehicles in Germany, Brazil, China, India, South Africa, the United Kingdom, the United

States and Mexico.

• Oliver Zipse is the CEO of the company

• The circular blue and white BMW logo or roundel evolved from the circular Rapp Motorenwerke company logo, which featured a black ring

bearing the company name surrounding the company logo, on a plinth a horse's head couped.
 Company Profile

• USP:BMW is technologically advanced and luxurious product portfolio delivering ultimate driving experience
• TAGLINE/SLOGAN: Ultimate Driving machine; Sheer Driving Pleasure
• Fun Fact: Did you know that BMW used to make airplanes, and it only got into auto manufacture after the
Treaty of Versailles banned all German companies from producing warplanes following World War I?

BMW STP

BMW Segmentation Luxury segment cars for affluent customers

BMW Target Market Targeted towards rich professionals and affluent families

BMW is positioned as eco-friendly and technologically advanced company

BMW Positioning which inculcates innovation in the products to provide an exhilarating
driving experience
Vision and Mission statements of the company

The mission and vision statements by BMW distinguish it as a dynamic and change-oriented corporation. The focus on creating
exceptional designs not only for its customers but also for challenging other companies in the automobile manufacturing industries
has positioned it at the top in terms of excellence. In fact, it is highly coveted in the modern era, setting an example of how a
persistent and determined company in the industry should be.

BMW’s vision statement is “to be the most successful premium manufacturer in the industry.”
The statement reveals the indicators that the company wants to define its growth path. Moreover, with this quality, BMW can
affirm its leadership and influence in the automobile manufacturing sector.
Vision and Mission statements of the company

BMW’s mission statement is “to become the world’s leading provider of premium products and premium services for individual
mobility.”
The statement shows that BMW has come of age and no longer settles on normal or what can be defined as satisfactory products.
Instead, the company goes beyond this expectation to bring first-class cars

BMW’s core values comprise “responsibility, appreciation, transparency, trust, and openness.”

With its core values such as responsibility and transparency, the company has managed to refocus its mission and vision statement to
align with the demands of the automobile industry in the contemporary era.
 SWOT Analysis

BMW’s Strengths
1.High-Quality Products: BMW is obsessed with striking a perfect balance between durability, performance, and high-end luxury. Each car that rolls out of the factory is perfectly
engineered to provide state-of-the-art cars for everyday use.
2.
2.Experience in Green Technology: Any automaker that has already amassed decades of experience in hybrid and full-electric technology has an immense advantage since eco-friendly is
the future. BMW has been working on electric cars since the 1970s.

3.Global Operations: BMW has a global sales network and operates more than 30 plants and assembly facilities spread across 140 countries.

4.Highly Valuable Brand: By focusing on the needs of the consumer, BMW has built a strong and valuable company. In 2019, BMW was ranked #21 world’s most valuable brand.

5.Excellent Reputation: The purchasing decisions for luxury brands rely heavily on the reputation of the brand. As a brand, BMW is one of the most recognized companies for excellence.
In 2019, Inter Brand ranked BMW 11th strongest brand out of the top 100 global brands.

6.High R&D Investments: R&D is the engine that drives success and long-term sustainability. BMW invests heavily in hybrids, autonomous, and electric cars.

7.Effective Strategies: Having a small portfolio eradicates deviation from pre-set strategies. With only three brands under its portfolio, BMW operates very efficiently as a well-oiled
German machine relying on highly effective strategies.

8.Balanced Geographical Revenues: Having diversified revenue streams from different regions ensures long-term sustainability. BMW has a substantial market share in Europe, America,
and Asia and sells hundreds of thousands of cars in each region.
 SWOT Analysis

BMW’s Weaknesses

1.Negative Publicity: Although BMW had requested subsidies from the German government to cushion the impact of the
pandemic, the executive decided to pay more than $1.7bn in dividends. This level of greed in trying times can turn away even the
most loyal customers.

2.Controversial Recalls: The reputation of automakers declines whenever they recall cars. BMW is recalling nearly 357,000 older
models in the U.S. and over 1.4 million globally to replace faulty Takata airbags.

3.Several Lawsuits: BMW is engaged in several lawsuits, including an obstruction case in South Korea and collusion over
emissions in Europe. Being on the wrong side of the law regularly is a major weakness since it makes it difficult for consumers to
trust the company.

4.Small Portfolio: While competitors like Volkswagen own several top brands, BMW’s portfolio lacks product differentiation and
consists only of BMW, MINI, and Rolls-Royce.
 SWOT Analysis

BMW’s Opportunities

1.Provide Flexible Options: Millenials and Gen-Z are taking over the consumer market, and they demand flexible transportation. BMW already has
the cars and only needs to start a car rental business or develop a car share app to entice this lucrative target market.

2.Focus on Emerging Markets: According to Thomas Schaefer, Head of Volkswagen Africa, sub-Saharan Africa has the potential for 3 to 4 million
new cars, which is a drastic increase from around 420,000 in 2017. BMW can exploit unsaturated, emerging markets.

3.Expand into Self-Driving Sector: Autonomous vehicles in the future. BMW can lay the foundation to exploit the demand in the future.

4.Offer Eco-friendly Mobility: The number of eco-conscious consumers is increasing rapidly, along with the demand for greener mobility options. As
one of the leaders in the electric car market, BMW is perfectly poised to exploit this demand.
 SWOT Analysis

BMW’s Threats

1.Looming Global Recession: During periods of economic hardship, consumers reduce or eliminate non-essential expenses like buying a BMW. Currently,
major economies are already in a recession in the aftermath of the destruction caused by the virus.

Rising Manufacturing Costs: Auto manufacturing is influenced by a wide range of competing and complex factors. In 2019, BMW’s second-quarter earnings
2.
dropped by 48% due to an increase in the cost of manufacturing.

Stringent Regulations: As governments adopt stringent laws to combat emissions, it is very easy for any automaker to get in trouble. BMW is facing hefty fines
3.
for colluding with Volkswagen and Daimler to block rollout of clean emission technology.

Possibility of Tariffs: In 2018, BMW and other German automakers visited the White House for talks on trade, which ended with a pause on tariffs for European
4.
cars. If trade tensions flare-up in the future, it is highly likely that the U.S. will impose tariffs on BMW and other European cars.

Effects of the Pandemic: Manufacturing has ground to a halt due to lack of raw materials, while BMW and other carmakers cutting their financial outlooks as a
5.
result of the virus. If it persists, BMW’s high profitability can be wiped off.

Stiff Competition: Just like any other company, BMW is susceptible to loss of customers and market share to stronger competitors like Mercedes and Lexus.
6.

7.Changes in Demographic: Millennials are taking over the consumer market, but they don’t want the burden of full-ownership, which can shrink BMW’s target
market and profits.
 Current Business Strategies

INTRODUCTION:

Position: BMW stands for first class individual mobility and contribute to the sustainable development of our planet . BMW reconcile
economy ,ecology and society as a result BMW customers enjoy outstanding products

Direction: BMW offer thrilling products-today and for future generations. High profitability secures BMW independence as a company.
BMW use powerful innovations and passion to shape the future of sustainable mobility

Strategic Approach: BMW focus on customers and meet their needs which differ across the world . BMW combine pioneering
technologies , emotional products and personalized customer support to create a unique overall experience

Cooperation: BMW deliver top performance its values are the basis for cooperation. BMW work hand in hand internally and with our
external partners. In doing so, BMW achieve Maximum effectiveness, and together bring success to the company.
 Current Business Strategies

The objective of a strategy is to maximize an organization's strengths and to minimize the strengths of the competitors. Current business strategies of BMW
are:-

Customers will have option of buying custom vehicles entirely online

the BMW Group, with its retail partners, is planning to give customers the option of buying their individually configured custom vehicle entirely
online in the future and having it delivered to their front door –This will allow customers to experience BMW Group products and services
customised for them in the best possible way.
Annual investment of triple-digit million amount up to 2025 in digitalisation of sales and marketing
Having this as a basis enables us to provide an individual offering, customised for them, including all features and services, from a single source
Digital aftersales upgrades will substantially contribute to highly profitable optional equipment business in the future
This will make it easier for customers to equip their vehicle with options that meet their wishes and individual mobility needs.Customers will also
be able to activate additional features, such as driver assistance systems, selected light and sound packages, or even suspension set-up. These
features are also offered for a limited time – benefiting customers who lease or rent their vehicle and only drive it for a certain period.
Customers decide how data is used
The high standards customers expect from BMW Group products and services set the benchmark for handling their data. Customers decide for
themselves whether to make personal data available to the BMW Group so it can optimise their experience of the company’s products and
services.
 Current Business Strategies

New marketing agency model “THE MARCOM ENGINE” enables implementation of new marketing strategy
The new marketing agency model “THE MARCOM ENGINE” lays the foundation for a personalised and targeted customer approach at BMW and MINI in the
future. The BMW Group has reorganised its marketing agency landscape in Europe for this purpose. Instead of over 80 partners operating regionally, the
company will concentrate on two higher-level agencies, whose portfolios complement each other perfectly, for implementing the new marketing concept.
Customers can experience new sales and marketing approach for the first time with launch of BMW iX and BMW i4
With the introduction of the new BMW iX and BMW i4. BMW and MINI customers will be able to take advantage of a steadily expanding range of additional
vehicle functions available as digital aftersales upgrades, as well as a seamless and especially customer-centric configuration process with personalised options.
Customers value premium service for maintenance and repairs
The BMW Group is also working with its retail partners to further optimise the service and maintenance offering for customer vehicles. An average of about
15 million customers a year rely for service on no fewer than 3,527 BMW and 1,650 MINI retail partners worldwide, underlining the importance of this
offering.To step up its e-mobility ramp-up, the company has already trained more than 2,000 staff at its German retail outlets in the safe use of high-voltage
systems through special vocational training and further education programmes.

No premium without sustainability – also for sales and marketing

This contributes to the strong sales of electrified vehicles, which resulted in the BMW Group being able to overfulfill the EU’s CO2 targets in 2020. The BMW
Group is also training employees and retail partners to become ambassadors for its sustainability ambitions. In addition, the sales organisation is promoting
topics such as recycling and use of secondary material.
 Porter’s 5 Force Model

The competitive position of businesses is affected by several forces. This is a five forces analysis of BMW, based upon the Five Forces model given by Michael E Porter. At the
core of this model are five forces that affect the intensity of competition as well as the profitability of any industry. In the case of BMW as well as the entire automobile
industry, these forces have a special relevance.

1Bargaining power of suppliers:

 The bargaining power of suppliers is affected by several factors including the size of the firm, concentration of suppliers in the industry as well as their ability of forward
integration.
 BMW works with around 12,000 suppliers located in 70 countries. Several of its supply chain partners are themselves auto firms and the main aim of these partnerships
is to produce BMW cars locally in the markets where BMW operates.
 BMW supply chain partners in Indiainclude Force Motors, ZF Hero Chassis, Draexlmaier India, Tenneco Automotive India as well as Valeo India, Mahle Behr and Lear
India.
 BMW is a leading brand with a global market presence and partnering it is highly profitable for any of the suppliers.

 The suppliers are required to adhere to the code of conduct as well as follow ethical and sustainable business practices to remain BMW suppliers. The overall bargaining
power of BMW supply chain partners in this way gets to become moderately low.

 BMW enjoys strong brand equity globally and moreover, working in partnership with BMW is an attractive proposition for its suppliers. All these factors offer BMW higher
clout in the global automobile industry. However, BMW invests in the education and training of its suppliers and also works to manage its supplier relationships well.
 Porter’s 5 Force Model

2Bargaining power of customers:

• In the 21st century, the bargaining power of customers has grown a lot which is due to increased competition as well as higher
regulation, changing consumer trends and low switching costs. Now, the customers are well informed and conduct research before
making the final purchase. Moreover, the government has grown the level of regulation favouring the customers and this has led to
higher focus upon product quality as well as passenger safety.

• Most of the leading brands including the closest rivals of BMW are investing heavily in research and development as well as
marketing. The focus is now on entire customer experience and not just quality products. Marketing as well as after sales service
have also become a core focus for luxury automobile brands.

• In the case of BMW, some of the leading factors that moderate the bargaining power of customers are brand equity, product
quality, technological innovation and customer experience. Overall, the bargaining power of BMW customers is moderately high.
 Porter’s 5 Force Model

3Threat of substitutes :

• The threat of substitutes is an important factor that affects demand and profitability of any automobile brand including BMW.

• The higher the number of substitutes, the higher is the threat to consumer demand and profitability of any brand. Main substitutes of
BMW include the rival brands in the industry as well as the alternative sources of transportation. There are several rival brands in the
market like Volkswagen, Audi, Mercedes. Alternative sources of transportation like cars, buses, flights also act as a threat before BMW.

• BMW offers a comparatively better customer experience than most substitutes. The passenger safety and convenience as well as luxury
which BMW car offers is matched by very few rival brands in the market. The overall threat of substitutes for BMW is moderate.
 Porter’s 5 Force Model

4Threat of new entrants:

• The threat of new entrants in the automobile industry is very low which is because of the higher entry and exit
barriers.

• Except Tesla, there is hardly any new brand that has been able to build a remarkable presence globally in the
automobile industry during the recent years.

• Growing legal regulation of the automobile industry has also made it difficult for new players to enter the
market.

• .The overall industry environment has become highly challenging. New businesses would also need to invest a lot
in building production, supply and distribution networks which works as a barrier to entry.
 Porter’s 5 Force Model

5Intensity of Rivalry
• Competition is quite fierce in the automobile industry. There are several rivals of BMW in the market like Audi, Mercedes.
• With growing competition, companies are forming partnerships to strengthen their competitive advantage and produce cars
locally for sales in local markets. BMW has also entered into partnerships with other car businesses like Great Wall Motors of
China.
• BMW has grown its focus upon sustainability, vehicle design, customer experience as well as research and development.

• There are factors that help BMW moderate the competitive pressure and include brand equity, supply chain, international
manufacturing network as well as marketing. All these factors have helped the BMW group retain its leading position and
market share in the automobile industry. However, reducing its focus upon innovation or product quality will lead to loss of
market share. So, continuous focus upon R&D as well as customer satisfaction is essential to beat the competitive pressure.

• The overall intensity of rivalry in the industry is very high.

 Conclusion

Conclusion

• BMW Current Business Strategies Conclusion :

The company’s strategic policies, adoption of technological ways of manufacturing cars, BMW has been able to produce high quality cars, which meet the
consumer demands. This has also helped the company to minimize the impacts of external environment on the strategy.

• BMW SWOT Analysis Conclusion:

Being one of the German’s trinity in the luxury auto industry along with Mercedes and Audi, BMW has always differentiated itself, producing cars that owners like
to take the wheel for their own pleasures. BMW is expanding its territory to the electric vehicle market to compete fair and square with Tesla and diversify its
income from tightly-regulated internal combustion vehicles. The company also has a stake in the future autonomous vehicle market.
 Conclusion

• BMW Porter’s 5 Force Model conclusion

BMW’s competitive position in the global automobile industry is strong. Apart from its strong bargaining power against the suppliers, it
has more sources of competitive advantage like technological innovation, better customer experience and a global supply chain and
manufacturing network. Competition in the automobile industry has continued to grow intense. However, despite intensifying
competition, BMW has retained its leadership position by focusing upon innovation and product quality.

• Overall conclusion about the company

In summary, BMW Company has been greatly successful due its strategic approach and innovation of cars. Indeed, this has enhanced the
organizational strategic capability and promoted the stakeholder expectations about the company products. Finally, though the company
has weaknesses and potential threats from the competitors, it relies on its strengths and the opportunities in the global market.
 Recommendations/Suggestions

Recommendations

• Continuous focus upon R&D as well as customer satisfaction is essential to beat the competitive pressure.

• Younger generations are more cost conscious and environment conscious and electric cars sales have risen, BMW needs
to strive to create more all-electric options which apart from being high-performance, will need to be affordable.

• BMW needs to focus on emerging markets such as America and Asia with mid-priced vehicles

• Partnering local brands in the Asian markets will also help it establish production facilities there. It can potentially
reduce the production costs.