BMW1

Junyoung Eum, Sung Wan Park, Jinwoo Bae, and Sung Yon Lee

IMS 3319.004

Prof, Salk

12/04/2013

BMW SWOT Analysis

The company BMW recognized one of the most selling luxury vehicle manufacturers in

the world. Which means the company has accomplished a lot of reputations not only with

technology, but also creative design its vehicles. We would like to talk about BMW’s history,

SWOT analysis, resolving issue they faced.

BMW stands for Bavarian Motor Works in German. Before established the company, it

used to be three different companies produced high performance aircraft engine. Those three

companies collaborated and established BMW in 1916. After the collaboration, BMW focused to

produce motorcycles. In 1929, BMW started to manufacture automobile. The BMW Dixi was the

first vehicle and recognized the best small (compact) car in the market as well as their

technology. BMW succeed to launch within British automobile industries. However in 1939,

BMW has suspended car productions by German government because of the WW2. The

company focused to produce war transportations such as motorcycles and aircrafts for German

troops.

There are four primary strengths for BMW which is strong market penetration, band

reputation, creative automobile design, and race competition. On the strong market penetration,

BMW has expended target customers. BMW owns the Mini and Rolls-Royce. Even though

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BMW has dynamic of the car selections; 4 doors sedan, roadster, and coupe, Mini and Rolls-

Royce bring more target customers and gain powerful market penetrations. Majority of female

customers are attracted by Mini Cooper, moreover Rolls-Royce attracted by the people who earn

high income and have remarkable reputation.

On the opportunity, the most important opportunity that BMW found on 21th century is

new markets such as Asian market which mostly targeted China and green vehicle market which

has the potential to grow and rule the future vehicle market. First of all, the Asian market gives

BMW a chance to raise their sales. According to BMW’s annual reports, the number of cars that

BMW sold in Asia in 2012 is 493,393 which outnumbered the total sales in America which is

425,382. Until 2009, North America was BMW’s number one market. However, Asian market

catches up the sales on North America with China’s astonishing growth and became the number

one market. Nowadays, China buys more than half of cars that BMW sells on Asian region and

tries to be the number one country that buys the most BMW cars with its numerous populations.

Another opportunity is green vehicle market which is not yet well known. According to

EDA which stands for Electric Drive Transportation Association, the total sales of green vehicle

in the U.S. in 2011 and 2012 were 284,064 and 487,480 which were around 3% of total car

market share of the U.S. However, from January to October in 2013, the number of green vehicle

that sold in the U.S. was 501,369 which is almost 4% of total car market share and already

outnumbered the previous year’s sales. Those data shows BMW a reason why BMW should

enter the green vehicle market to sell its 1 Series which are electric cars.

BMW is one of the popular car brands in automobile industry and market. However, it no

one knows that BMW will keep remains as the popular and leading company in automobile

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industry if it does not overcome threat well. One of the major threats is intense competition with

other famous car companies such as Mercedes-Benz, Audi, Lexus and Cadillac. These

companies are always competing each other and have the same level cars that can also compete

with BMW’s all series. For example, Acura TL, Cadillac CTS and Infiniti G35 are same level

cars that can compete with BMW’s 3 Series. These cars don’t have big differences in price and

performance. That means BMW needs to focus and to prepare for rapidly changing automobile

industry. Another major threat is raising raw material prices. Since automobile industry is week

at price of raw materials, BMW can’t be an exception. Rising price for raw materials will

increase the cost of auto manufacturers and result in squeezed profit.