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Strategic Analysis Presentation

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by

Sachin Augustine

on 3 April 2015

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Transcript of Strategic Analysis Presentation

CORPORATE LEVEL STRATEGY
Based in Munich
Originally an Aircraft Engine Manufacturer During WW1
It has 30 facilities in 14 countries
MERCEDES-BENZ
Innovation
Strong built cars and exceptional after-sales services
They have a selective distribution network
They have a vast distribution network that adds value to customers

THANK YOU!
INTRODUCTION
EXTERNAL ANALYSIS - GENERAL ENVIRONMENT
EXTERNAL ANALYSIS - INDUSTRY ENVIRONMENT
INTERNAL ANALYSIS - RESOURCES
GROUP 10
LISA NGO, SACHIN AUGUSTINE, SABYASACHI DAS, TANYA IYER, UPNEET DUGAL
STRATEGIC
ANALYSIS
EXTERNAL ANALYSIS
INTERNAL
ANALYSIS
GENERAL ENVIRONMENT
INDUSTRY ENVIRONMENT
COMPETITIVE ENVIRONMENT
RESOURCES, CAPABILITIES & CORE COMPETENCIES
VALUE CHAIN ANALYSIS
EXTERNAL ANALYSIS - COMPETITIVE ENVIRONMENT
CAPABILITIES & CORE COMPETENCIES
INTERNAL ANALYSIS - VALUE CHAIN ANALYSIS
BMW
STRATEGY

BUSINESS LEVEL STRATEGY
CORPORATE LEVEL STRATEGY
BUSINESS LEVEL STRATEGY
PORTER'S 5 FORCES
COMPETITIVE RIVALRY
Intensive Competition
Chinese Market
Decreasing Gap to Mercedes Benz and Audi
THREAT OF NEW ENTRANTS
High technology
Brand equity
Strategic partnerships and mergers
BARGAINING POWER OF BUYERS
Low switching costs
Exclusivity
Holding on to cars for a longer period
BARGAINING POWER OF SUPPLIERS
Plenty of suppliers
Developing systems with cutting edge features
THREAT OF SUBSTITUTES
Environmental awareness
Costs and health awareness
Convenience, value and independence
THE BMW GROUP
THE SUBSIDIARIES OF BMW GROUP
SOME INTERESTING FACTS
WWI- Broke records
1959-Daimler Benz Nearly Took Over
1972-First Electric Car
2013-i3 Electric Car
Now-BMW Classic Program

POLITICAL
EU - End of Live Vehicle Recycle
Russia-Ukraine conflict
The Arab Spring and it's affects
ECONOMIC
The fluctuating Euro
Rising GDP of India and China
China pushing out the U.S. as BMW's top market
SOCIAL
Changing Social Trends
Rising Environmental Awareness
Rising Popularity of Public Transport
TECHNOLOGY
Rising Popularity of "Green Cars"
BMW's Response to the trend
LEGAL
Varying legislation in different countries
China and the crackdown on corruption
ENVIRONMENTAL
Increasing carbon taxes
Changing attitudes of consumers
China's new Environmental Protection Law (EPL)
BMW OPERATIONS
Agile and economic operations
Safety and quality regulations
Good customer service
BMW SUPPLY CHAIN MANAGEMENT
Global supplier network
More than 12000 suppliers in 70 countries
Suppliers enforce BMW's environmental and social standards
BMW DISTRIBUTION
BMW VALUE ADDS
TANGIBLE
INTANGIBLE
FINANCIAL SERVICES
Positive Net Profit during GFC
Debt-Equity Ratio = 2.08
Increase in dividends paid
PHYSICAL RESOURCES
Plants in 30 locations & 14 countries
Flexible assembly lines
Competitive advantage - customer customization needs
HUMAN RESOURCES
Increase in employee count
Training expense for 7 years = 1.5 billion Euros
The 'BMW Thinking'
INNOVATIVE RESOURCES
'Engine of The Year' Award 2013
'DriveNow' Program
Scientific Capabilities
SWOT
FOCUSED DIFFERENTIATION
Focus on premium customer market
Differentiation - 10 product segments; starting price - $36,900
They have a variety of 18 products
It is the oldest company among the three


BMW
69 million cars sold in the last 20 years
Current market leader in the premium car segment
Focused on delivering quality and innovation while delivering value

AUDI
Subsidiary of the Volkswagen Group
Main objective -
align innovation with customer expectations
China and India are the key markets
EVALUATING THE "GERMAN BIG 3"
FOCUSED DIFFERENTIATION
Potential Issue
High concentration on niche markets
Competitors have lower base price
Recommendations
Develop variations that cater to aspirational customers
Product Development:
Introduction of new products into the market
Example: bullet-proof cars in Moscow
Market Development:
Widespread production and distribution facilities
Overtakes Mercedes Benz in China and U.S.A.
HORIZONTAL INTEGRATION
Acquiring competitors
Most common form - M&A
Failed Rover Acquisition (1994)
Rolls-Royce Acquisition
CORPORATE LEVEL STRATEGY
ISSUES
Coordination of global offices
Failed acquisition of Rover Group
RECOMMENDATIONS
Well trained management
Research prior to corporate takeover
Corporate Level Strategy
Full transcript