Bayerische Motoren Werke (BMW)

Bayerische Motoren Werke (BMW)

Bayerische Motoren Werke (BMW) is a German corporation that manufactures motorbikes and motor vehicles. The firm has produced over 2.279 million cars and is the world’s largest manufacturer of premium automobiles (Jurevicius, 2016). It is also the world’s 12th largest automaker. BMW’s headquarters are in Munich, Bavaria, Germany. Mini, BMW, Rolls-Royce, Husqvarna, and Motorrad are among the five brands sold by the company. Furthermore, its primary markets include the United States, China, France, and the United Kingdom. In addition, BMW has sold over 470,000 motorbikes and automobiles in China alone. The corporation employs around 120,000 people (Jurevicius, 2016). BMW does not depend so much on its home market to generate more revenue as compared to most of its competitors. The company has a strong presence and significant market in China. A lot of automakers try to be dominant in the Chinese market, but only a few succeed. Additionally, BMW is successful in the Chinese market because it partners with a local Chinese company called Brilliance Auto Group. The joint alliance formed by the two parties is BMW Brilliance Automotive Ltd, which is responsible for the manufacture and sale of Rolls-Royce, BMW, and Mini cars. Strong markets globally have ensured success and future sales growth, this is evidently shown when the company realized a profit of 6.396 billion euros in 2015, a 10% increase as compared to 2015’s (Jurevicius, 2016). Despite its success in the auto industry, BMW faces competition from automakers such as Ford Motor, General Motors, Honda Motor, Hyundai Motor Company, Nissan Motor Company, and Tata Motors among others (BMW Group 2016).

Mission and Vision Statements

The mission statement of BMW is “The BMW group is the world’s leading provider of premium products and premium services for individual mobility.” On the other hand, the vision statement of the company is “To become the most successful premium manufacturer in the car industry” (BMW Group 2016).

Weaknesses

In spite of being one of the best automakers in the globe, BMW Group faces two main weaknesses. The first weakness is its weak automobile brand assortment that contains petite differentiation of products. The company has only three diverse brands which are Rolls Royce, BMW, and Mini. The firm depends heavily on the trading of its luxury BMW cars. Additionally, its portfolio is focused on cars, small and medium luxury cars to be exact. It, therefore, does not offer any heavy and light commercial vehicles, buses or pickup trucks. The company does not also produce any vehicle brand targeted for the middle income or low-income consumer who are unable to afford luxury cars (Jurevicius 2016). The second problem the company has is increasing debt levels. Currently, the debts are highest in the company’s history. Over the past five years the debt has been consistently rising, and in 2015, it almost reached 130 billion euros. The rising debts are attributed to technological investments in self-driving and electric vehicles (Jurevicius 2016).

Impact on Strategic Position

The two weaknesses have an impact on the strategic position of the company because when economic conditions become worse, the taste of consumers’ changes which might result in criticisms or negative publicity for the company’s brands. Additionally, the increasing debts will hinder the company’s capability to invest a lot of money in research and development. This also inhibits the acquisition of expensive resources such as new technology that would make the company grow faster (Jurevicius 2016).

References

BMW (2016). Sustainable value report. Acting sustainably, achieving objectives. Retrieved on March 5th, 2017 from https://www.bmwgroup.com/en/responsibility/sustainable-value-report.html

Jurevicius, O. (2016, December 8). BMW SWOT analysis - Strategic Management Insight. Retrieved on March 5th, 2017 from https://www.strategicmanagementinsight.com/swot-analyses/bmw-swot-analysis.html