BMW SWOT Analysis | BMW SWOT Matrix
The BMW Group Company Profile and BMW SWOT Analysis
The BMW Group’s particular fascination does not depend only on its technology and products, but it also builds upon in its history, which pioneers, brilliant designers, and inventors. Today, almost 31 production & assembly facilities are present in 15 countries. The BMW Group is one of the global-sales-network, and it is the leading manufacturer of motorcycles and premium automobiles in the whole world. It also offers premium mobility and financial services.
Production Today and Tomorrow
The BMW Group has set the trends in production technology & sustainability with innovation leaders due to the mixing of intelligent material. It shifts technological things to resource-efficient production or digitalization. At the same time, continuous optimization and flexibility of the value chains make sure competitiveness.
Sustainability: The Guiding Principle for All Our Actions
Responsible action and thinking for the long term are the basis of economic success. Social and ecological sustainability, clear commitment, and product responsibility to those conserved resources are important parts of the strategy. With better dynamics, they are consistently trying to implement sustainability principles that can help to reduce the emission and consumption of fuel.
Founded: March 7, 1916
Founders: Karl Rapp, Gustav Otto, Camillo Castiglioni, Franz Josef Popp
Owners: Susanne Klatten, Stefan Quandt
Headquarters: Munich, Bavaria, Germany
Revenue: €98.990 billion (2020)
Operating income: €5.222 billion (2020)
Net income: €3.857 billion (2020)
Number of Employees: 120,726 (01- 01-2021)
Industries Served: Automotive, Motorcycles, Financial Services
Geographic Presence: More than 150 countries
Competitors: Ford Motor Company, Hyundai Motor Company, Toyota Motor Corporation
BMW (Bayerische Motoren Werke) is a leading name in the automotive industry that manufactures and sells luxury cars and motorbikes. It has produced more than 2.279 million cars till now and is the 12th biggest luxury automaker in the world. It sells its motorcycles and cars under 5 different names or brands such as BMW, Rolls-Royce, Mini, Husqvarna, and Motorrad. Countries like the US, China, the UK, France, and Germany are the biggest markets of BMW.
Strengths of BMW | BMW SWOT Analysis
BMW is the 3rd highly valuable automotive brand in the globe right now with a worth of $41.5 billion. According to Forbes, it is the 2nd most valuable automotive brand. The main competitors in this list are Mercedes-Benz and Toyota.
It is one of the most recognizable brands in the world which shows its positive image and recognition. They are known for manufacturing state-of-the-art engineered cars and vehicles. Its vehicles are enough to enhance your driving experience. Due to their high brand recognition, they can connect with their audience easier and faster. It helps to save their advertising or promotional expenditures.
- Strong Geographical Revenue Streams:
When we conduct a SWOT analysis of any company, we come across the fact that the company is heavily dependent on its home market but this is not the case with BMW. Many of its competitors are highly dependent on the home automotive sector. BMW generates revenue from different markets such as China, France, and the US. The company has sold 464,000 vehicles to China recently and earned more than 15,856 billion euros. China is the biggest market for BMW and it accounts for more than 20 % of its revenue.
Efficacious Partnership in China:
There is no doubt that China is the leading and biggest automotive market in the world right now and BMW has a deep influence in China. Many automotive companies have tried partnerships in China but BMW is one of the most successful companies among them. This thing shows the success of BMW in China and they have made several partnerships with local Chinese automotive companies. The joint venture between Brilliance Auto Group and BMW is known as BMW Brilliance Automotive Ltd. They sell Rolls-Royce, Mini, and BMW under their banner.
This strong partnership ensures BMW’s success in China as well as in the world.
State of the Art Engineering and Driving Experience:
The automotive industry is highly competitive because of the presence of luxury companies like Audi, Mercedes-Benz, Lexus, and Ford. But, BMW’s state-of-the-art technologies and perfectly engineered vehicles are giving tough competition to these brands in reach, revenue, and reputation. Their vehicles are exceptionally comfortable and supportive that taking your driving experience to the next level.
Ability in Electric and Hybrid Cars:
BMW i3 is the first electric car of BMW, released in 2013. It becomes the 3rd bestselling electric car in the world in 2015. They also launched a hybrid vehicle named as BMW i8. BMW has already sold over 100,000 electric cars to date and planning to produce more electric cars in the future. When it comes to producing hybrid and electric cars, BMW has a competitive edge over its rivals.
Effective Strategy for Tackling Future Needs:
The research and development sector of BMW is very strong and they continue finding ways to meet future needs. They are very clear about their working strategy and putting efforts in the right direction. They divide their goals into 3 sections such as,
- E-mobility which primarily focus on the future requirements of hybrid and electric cars.
- Autonomous driving is another main thing in this segment.
- They are focusing on digitalization and connectivity and called it mobility service.
Weaknesses of BMW | BMW SWOT Analysis
Limited Product Portfolio:
BMW has only three recognizable brands such as Rolls-Royce, BMW, and Mini. The sale of Mini cars and Rolls-Royce is really limited as compared to BMW cars. This shows the limited brand portfolio. It is a big weakness of BMW and they should introduce some innovation to other portfolios in order to increase their demand and sale. People only consider its luxury BMW cars which is not good for its other brands.
On the other hand, the company only focuses on the production of smalls and medium cars. They do not produce heavy commercial vehicles, pickup trucks, buses, and more. This kind of limited offering makes it a weak company. Moreover, most of its offerings are only for high-class people and they don’t have anything for lower to middle-class customers.
This poor automotive portfolio is a main weakness of BMW and it can be turned out a big disadvantage for the company.
Rising Debt Levels:
Increasing debt levels are another major weakness of BMW. In 2014 and 2015, they faced the biggest debt levels in their entire history. This is due to the huge investments in different sectors such as autonomous driving and electric vehicles. Due to these investments, the company is not able to invest in other sectors like marketing, R&D, and acquisitions. These things are necessary for faster growth but BMW is lacking in this sector.
Opportunities for BMW | BMW SWOT Analysis
Increase of Fuel Prices in Future:
According to reports, fuel prices are likely to mount in the future due to the disturbance in supply and demand. Some automotive companies have benefited from the low fuel prices by investing in heavy vehicles such as trucks, buses, and SUVs. But, BMW does not have any commercial or heavy vehicles. So, when the fuel prices increase, the demand for small vehicles will automatically increase. This thing provides a huge benefit to the company and it is a big opportunity for BMW to invest in small vehicles.
Increasing Demand of Autonomous Vehicles:
Right now, more than 30 companies are working on autonomous vehicle projects. Tesla, Google, and Ford have successfully tested their autonomous vehicles on the roads and they are currently selling these cars to the customers. According to automotive experts, an autonomous vehicle is the next big thing in the automotive sector.
BMW can speed up their work on this project just to get the lead. They should acquire the required skills ASAP so that they could beat Tesla, Ford, and Google.
Decreasing Euro Exchange Rate:
The biggest revenue share of BMW comes from European countries. The fluctuating euro exchange rate can create a bit impact on the company. They can earn more profits by selling their vehicles to those countries where the euro exchange rate is slightly weak. This works in the favor of the company.
Launching of New Models:
The impact of timing and frequency in the release of new vehicles is really huge on the automotive industry. BMW should modify its cars and technologies every four to five years in order to fulfill consumer needs and market demands. This should be done on the basis of market dynamics and changing technology. BMW can secure a leading spot by launching new vehicles frequently.
Threats to BMW | BMW SWOT Analysis
Stiff Competition in the Global Market:
The automotive industry is continuously rising and becoming more competitive due to reliable players. Everyone is trying to lead the chart with their amazing offerings and technologies. It is almost impossible to beat Tesla in electric cars. Google is trying to produce self-driving cars which can threaten the profitability and recognition of BMW. Many new entrants are also establishing their name with their offerings. These companies can create trouble for BMW.
Strict Government Regulations:
BMW is working in different countries and locations, so government regulations affect the market share and sales of the company. Strict government rules on greenhouse emissions are a big threat for BMW. BMW should focus on environmental initiatives but it can increase the production costs. They must keep these factors in mind in order to avoid risks.
Declining US Automotive Market:
As we know, many automotive companies including BMW are heavily reliant on the US market. But, the US automotive market is continuously declining which is a sign of threat for automotive companies. This thing can affect the market share and reach of BMW. It is because the US automotive market is highly oversaturated.
According to BMW’s SWOT Analysis, there are so many chances of growth for BMW. They just need to focus on their product portfolio and technology. They should produce cars for lower and middle-class consumers because it helps to increase their reach and market share. The automotive market is a price-sensitive market and competitive too, so BMW should invest wisely in different projects.
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