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  • Demand for "Green Technology" and company's ability to respond
  • Maintaining focus on BRIC and Southern Asian markets.. Establishing as a market leader and NPD
  • The Increased Demand for leasing agreements
  • Strong brand image and R&D can lead to diversification?Expanding portfolio?

  • High global presence and financial hedging can reduce currency risk
  • Brand – as one of the main sources of competitive advantage. Thus, maintaining brand identity can increase brand loyalty which is vital to bounce off the competition.
  • Close relationship with suppliers can help to stabilize the potential rise of prices in raw materials
  • Cutting down costs by moving production to cheaper countries, e.g. India
  • Performance in BRIC countries can outweigh potential poor results in Southern Europe
  • Expand product range by producing volume cars (cheaper cars - more affordable)??
  • Premium brand image protects them from substitute products by Asian car manufacturers?

Most importantly..

  • Keep focus on growth markets

Possibilities:

  • Strategic Alliances
  • Improvement in Marketing
  • NPD

Strategic Positioning and Future Recommendations

TOWS

T

O

Weaknesses

  • Not enough Strategic Alliances
  • High Cost Structure
  • 90% Organic Growth

10% Mergers and Acquisitions

  • Small Brand Portfolio

Strengths

  • Strong Brand Image
  • Product Innovation
  • Motorcycle as a niche product
  • High quality suppliers
  • High Employee Productivity
  • Strong R&D Capabilities

S

W

Threats

  • Currency Risk
  • Environmental Protection Regulations
  • Crisis in UK and Europe
  • Strong Competition on global scale

Opportunities

  • Poised to benefit from the growing demand for cars in BRIC countries
  • Incising demand for hybrid electric cars
  • Rising Green Awareness

Future Directions..

BMW's Strategies

Strategy Number One (2007-2020)

Four pillars - Future, Growth, Customers and Profitability

Differentiation Strategy

  • Use of high quality and luxurious materials
  • Providing a better level of services
  • Branding & Designing an Excellent Brand Image
  • Innovation and Research Leadership
  • Premium vehicles in luxurious market

(Lynch, 1997)

All targets fully attained:

  • Profits were doubled in the first 5 years
  • Common stock rise by more than 70%
  • Birth of BMW i3

Key Success Factors

  • Long Term Planning

  • Strategy of Ecological and Social Sustainability
  • Research and Development Investment
  • Marketing and Branding
  • Global Positioning in established markets

Political Factors

  • Brand Loyalty

Porter's Five Forces Analysis

  • Governments' New Laws and Regulations
  • Increase of Oil Prices

PEST Analysis

  • Taxation Policy (Luxury Car)
  • Foreign Trade Regulations
  • Innovation / Differentiation

(hybrid, electric)

Bargaining Power of Suppliers (Low-Medium)

Bargaining Power of Buyers (Low-Medium)

• Large number of suppliers

• Materials are widely accessible

• Suppliers are relatively small sized with no threat of forward integration

• High switching costs, however, BMW ensures close and beneficial relationship with their suppliers (helping them out throughout recession)

Threat of Potential Entrants (Low)

Economic Factors

Technological Factors

  • Increasing petrol prices, running costs

• Relatively easy to choose an alternative and customers are quite price sensitive

• However, does it all apply to BMW?

• Mass Customisation and High Flexibility

• It also depends on the market we are talking about

• Well established brands in the industry

• Large capital required

• Very hard to achieve economies of scale (have to produce a lot to reduce the costs)

• Patents restrict entry (in case of BMW)

Large investment on Research & Development of new Technologies .

  • Financial Crisis in Europe

Focus on the Environmental issues and ways to create more environmental friendly solutions in transport sector.

  • Rise in prices of raw materials

Dual Fuel Engine , Hybrid Electric Cars, Hydrogen Driven Cars. (eg. Toyota Partnership)

  • Emerging Markets in BRIC
  • Currency fluctuation

Intensity of Competitive Rivalry (High)

Threat of Substitute Products or Servises (Low to Medium)

• Large Mature Industry

• Audi, Mercedes, Lexus – all competing for the same customer

• BMW response was Strategy Number One – developing brand loyalty, focus on growth, customers, profitability and long term future.

  • A lot of alternatives, but none of them can offer the same convenience

  • Public transport can seem as more environmental friendly...

  • However, BMW's partnership with Toyota (developing the technology for mixed engine cars, i8)...

Graph illustrates the BMW Competition based on product range and geographical scope.

Sociocultural Factors

  • BMW operates in different regions (cultures)
  • Company's expenditure on staff training during crisis
  • Lifestyle Changes (more social mobility)
  • Ecological awareness

Evaluation of Internal Resources

  • VRIN Framework
  • Brand Image
  • Partnerships
  • Expertise workforce
  • Innovation and Technologies

Thank you for your time, any questions?

Thank you, any questions?

Organizational Capabilities

VRIN Framework

"For BMW is the ability to integrate world class engineering with world class excellence and highly effective Marketing" (Grand, 2010)

McKinsey's 7S Model

Resource : www.slideshare.net/patricgallagher/bmw-a-strategy-build-on-premium-brand.(2013)

BMW's Value Chain

Alastair Bruce

Athina Papamargariti

Benny Naue

Kaysha Hughes

Lucas Zajancauskas

www.slideshare.net/patricgallagher/bmw-a-brand-build-on-premiumbrand(2013)

Intangible Assets

Tangible Assets

Strategies that developed within the company or the organization overtime. This include company's reputation, culture, its knowledge and brands.

Refer to physical resources that an organization possesses and include plant, machinery, finance and HRM.

  • Three Premium Brands
  • Production Facilities
  • Customers perception : High-Value , Premium Status
  • Establish connection : Brand, Design and Technology Development
  • Flexibility through outsourced assembly
  • Strategic Alliances (i.e Fiat )
  • Dow Jones Sustainability Index (DJSI)
  • Skilled workforce based in UK

The Internal Environment of BMW

  • Value Chain
  • Tangible Assets
  • Intangible Assets

VRIN

Framework

  • Organizational Capabilities
  • McKinsey's 7S Model
  • Evaluation of Internal Resources

BMW Mission

"The BMW Group is the world's leading provider of premium products and premium services for individual mobility."

(BMW Group Mission Statement)

"I would say: focus on who you are, what you stand for. What are the values you have in the organization? What are the values ou believe in the products and services you sell and provide? BMW build high performance products because BMW is a high performance organization".

(Helmut Panke , Chairman Of BMW 2002-2006)

Introduction

  • Company's Background
  • BMW's External Environment

BMW Group.

  • PEST Analysis
  • Porter Five Forces Analysis
  • Key Success Factors
  • Conclusion

BMW

  • Established in 1917 Germany, Munich
  • One of Germany's largest and most successful companies in the world
  • Three Premium Brands : BMW, MINI and Rolls Royce

(Sold 1,845,186 vehicles in 2012 (10.6% increase)

  • Almost 105,000 Employees of BMW Group in 2012

The Strategic Analysis of BMW Group.

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