BMW i.e.

Bayerische Motoren Werke AG is one of the leading automotive company

established globally but based in Munich a city in Germany It manufactures, various models
of cars, motorcycles, mini cars, and Rolls-Royce.
PESTEL ANALYSIS

Political Factors

These are those governmental by-laws, legal regulations and security measures formulated
by the governments to control the automobile industry performances. These are:

a) The environmental restrictions and norms to be fulfilled by the automobile manufacturer

to facilitate a pollution free environment.

b) Taxes and duties both by domestic and foreign countries affect the policies and
success.

c) Schemes favored by regulatory bodies to encourage production of high mileage cars.

Economical Factors

a) Reduction in euro exchange rates varies the European automotive market.

b) The movement of the European market towards downfall affected the industry.

c) The economic conditions of the global level affect the top brands like BMW closely as
this is spread over the world.

d) The developing countries purchasing capacity and demands attract the new
developments.

Social Factors

a) Changes in the cultural factors categorizing status symbol at a time or fuel efficiency
based development influence demand-supply factors.

b) Variation in purchasing power of the buyers due to industry trends affects the sales.

c) Awareness about the global warming, eco-friendly automotive & harmful emission
resistant cars influence the sales, new developments, and turnover.

Technological Factors

a) Use of more technology owing to the rising demands of consumers.

b) Technology not just helps cut down cost, but enables more complex yet comfortable
designs.

c) This supports the eco-friendly revolution.

Environmental Factors

a) The awareness about global warming, go-green concept, etc. affects sales.

d) Changes in the tastes and choice of the consumers and buyers all over the world
influence business.

e) The inclination of consumers towards eco-friendly, more comfort-oriented, fuel-efficient

cars, etc. marks new developments.

f) Norms suppressing pollution emission to protect the environment.

Legal Factors

a) The restricted norms on environmental measures and preventive measures to ensure

more fuel efficient and go-green vehicles.

b) Strict norms of the other countries and global level impact the initiatives of the
automotive industry.

SWOT Analysis

Strength

1. Brand Recognition

BMW enjoys a reputation in the global automotive industry in the top five. This categorizes it
as reputable business at a global level. This has made a BMW a huge brand name not just
attracting consumers, but also a highly trained workforce.

2. Eco-friendly vehicles

BMW attempts to make more of fuel-efficient and eco-friendly cars supporting the global
pollution free revolution.

3. Emphasis on high quality

BMW is known for its highly engineered developments; top sophisticated models of cars,
and trained and highly qualified workmen.

4. Trained and highly skilled workforce

BMW is known to recruit the most qualified, skilled, experienced and productive workforce
at various levels and departments.

5. Meeting corporate social responsibility

CSR characterizes the practices of the company towards its stakeholders’ well-being,
environmental protection, societal upliftment, and sustainability initiatives. With this
company perform acts like employee health benefits, providing them additional benefits of
accommodation, crutches, educational sponsorships, life & health insurances, etc., society
sustainability activities, waste management programs, etc.

6. Strong market presence in China

As per the market statistics, the BMW sales have increased immensely in the markets of
China and other developing countries. This is owing to an increase in their purchasing
capacity, standards of living and global influence of economic growth in their domestic
economy.

Weaknesses

1. Higher cost than competitors

Quality demands a price. Quality products come from expensive raw materials and skills
workmen demand higher pay scale which cuts down the profits and increases the cost
structure. Its cost is higher than its other competitors, namely Volkswagen, General Motors,
etc.

2. Brand portfolio is weak

The BMW portfolio contains only a few brands, namely, Rolls Royce, Mini, and BMW. They
are very good performing segments of the BMW but it fails to serve the needs of the larger
section of the consumers demanding diversification targeting a wide range of customers,
markets and products.

3. Low strategic alliances and partnerships

Most of the growth of the company is purely its own and a very few are from the strategic
partnerships and alliances. Without partnerships, it becomes difficult to grow at the
technological and engineering level. Thus more growth will come from more partnerships
and ventures.

4. Expensive products

BMW cars are higher priced than its competitors as it focussing on luxury cars which
demand quality raw material which is costly, skilled workmen which are expensive to hire
and top technology which adds to its direct cost.
Opportunities

1. Rising petrol & diesel prices

Rising fuel cost attracts the consumers towards BMW fuel-efficient models and hybrid &
hydrogen cars. This helps them cut down their routine fuel expenses and contribute towards
a pollution free environment.

2. The demand for eco-friendly vehicles

The go-green revolution has increased awareness of choosing cars that help emit lower
harmful effluents and keep the environment pollution free. Hybrid and hydrogen cars are an
attraction in this case and in hot demands.

3. Changing needs of customers

To meet the needs of wider sections of consumer expansion in the brand’s portfolio is
needed. This will help to grow at a higher level new products and models to its list.

4. Changing pollution norms

The strict pollution control and environment-friendly regulations support the growth of BMW
as it produces fuel-efficient models. It aims at producing ecological cars and also developed
hydrogen cars with no CO2 emission. So these effects do not affect BMW in a financial
manner as it already follows these norms.

Threat

1. Cut-throat competition with other global leaders poses a threat by sharing of market
and reduction in sales.

2. Growing prices of raw material make the BMW cars more expensive as its models are
already highly priced than its competitors because of expensive raw material used.

3. Falling prices of fuel pose a negative impact on BMW sales as it produces fuel-efficient
products and hydrogen cars that reduce the fuel expenses of consumers.

4. Fluctuating euro foreign exchange rates affects lesser euro’s in exchange for another
currency that reduces its value of exchange.