BMW SWOT Analysis - Case Study Example

BMW SWOT ANALYSIS Introduction BMW is a company that manufactures automobile and motorcycle. The company is based in Munich, Germany. Some of the brands that the company sells are BMW, Rolls-Royce and minicabs, BMW motorrad and hasqvarna motorcycle. The company has approximately 106,000 employees. Findings Strength 1. Brand reputation 2. Eco-friendly vehicle 3. High-quality product 4. Highly skilled labor 5. Strong brand in china Weakness 1. High-cost structure 2. Weak brand portfolio 3. High price 4. Few strategic partners Opportunities 1. Rising prices of fuel 2. Diversification 3. Positive attitude toward green vehicles 4. New emission Threats 1. Stiff competition 2. Decreasing fuel prices 3. Raising price of low material 4. Rising euro exchange Discussion Strengths 1. Brand reputation. BMW is a well-known company with high-status branding. BMW is listed by Forbes as a reputable business. 2. Eco-friendly vehicle. BMW tries to manufacture environment-friendly vehicles by produce very efficient cars – use less fuel. Some brands are electric powered. Electricity is referred to as clean energy. 3. High-quality product: BMW is highly valued due to its engineering capabilities, highly skilled work force and its high quality products. In only few occasion has the company recalled its cars 4. Skilled work force: BMW only employs highly skilled Workers to produce its vehicle. The company has set its plant in a country like Germany and united stated where the world most skillful assemblers are found. 5. Strong brand presence in china: the company has seen its sale grow in china. China has the world largest automotive market. Weakness 1. High cost structure. BMW produces high-quality cars with hilly skilled workforce. This put its cost of operation high. BMW cost structure is higher than most of its competitors like Volkswagen and GM their segment, thus fail to serve larger market needs. To meet the diverse customer need 2. Weak brand portfolio: BMW only deal with three brands. That is Rolls-Royce, BMW and MINI. Despite the fact, that the three brand perform considerably well in BMW has to introduce more brands to its portfolio. 3. High price: BMW produce high-quality product with the most skilled employee; the price of their car is thus high. Getting a customer to buy them is hard. Another reason why their cars are expensive is that, they are shipped from US while others are from the Germany plant. The expenses of the shipping and high production cost make their vehicle be expensive. 4. Few acquisition strategic partners: acquisition only accounts for 10% of BMW growths. Without the acquisition, it is hard for the company to rapidly grow. In order for BMW to grow, it needs to increase its brand and attract acquisition partners Opportunities 1. Rising prices of fuel: the rising fuel price favor BMW hybrid and hydrogen cars as more customer shift toward less fuel consuming type. 2. Diversification: BMW brand are accepted in any part of the world. This means that BMW can sell its cars all over the world. 3. Positive attitude toward ‘green’ vehicles: the recent massive campaign toward reduction of environmental pollution, is promoting the ‘green’ product. Most of the consumers are, therefore, likely to prefer new BMW hybrid and hydrogen cars that reduce the emission of CO2 GAS. 4. New emission standard: The new regulations to reduce the emission of greenhouse gas affect the BMW as well as other automobile companies. BMW has reacted by manufacturing brand that use hydrogen and produce no CO2 gas. Threats 1. Stiff competition: BMW face intense competition from other automobile companies. The current competition is on price and not on product differentiation. Another factor is that the competition for luxury cars is concentrated on the few developed countries. This makes competition stiffer. 2. Decreasing fuel prices: the decreasing of the fuel price makes the electric and, hybrid less attractive. This will result to a huge loss to the company. 3. Raising price of low material: the rise in prices of raw material will increase the cost of production of vehicles. This will result to reduction in profit of the manufacturers. 4. Rising euro exchange: BMW sells its product in a market outside euro zone. In case the euro appreciate against other currencies the company profit will shrinks Competitors Some of its competitor are : Mercedes – Benz, Volvo car cooperation, Volvo car cooperation, Audi, Volkswagen , Toyota motor corporation, ford motor co, general motor company, chasler group LLC, Daimler AG. Volkswagen It is the largest German automobile manufacturer based in Wolfsburg. The company has also introduced hybrid cars and diesel electric cars. In 2012, the company introduced Jetta and golf hybrid, the two brands are very popular. Thus the company has managed to sell many pieces. This will offer stiff competition to that one from BMW. Mercedes Benz This is also Germany-based automobile manufacturer based in Stuttgart. Mercedes is a division of Germany automobile manufacturers Daimler. Like BMW, the company also target luxury car market niche. Toyota corporation This is largest automobile manufacturer in the world. Its headquarters is in Toyota aicha Japan. Toyota united states operation in are headquartered in Torrance California. Some of the common Toyota models are the corolla, Camry, land cruiser and Lexus. Lexus compete directly with BMW. Its sale united state was up by 23% and are expected to go up further by 10%. Volvo Car Corporation Zhejiang Gerry holding in China owns Volvo. The company’s headquarter is in Sweden. Volvo manufacture and market wide range of vehicle some that compete with BMW. Volvo has over 2300 dealers in the world. Its largest markets are in united state, Sweden, china, Germany and United Kingdom. In year 2011, Volvo recorded 44,225 car sales, an increase of 20.03% compared to 2010. Audi The company headquarter is in Bavaria, Germany. Audi, design, engineers, manufactures and market both automobile and motorcycle. The Audi braded vehicles are produced in seven production facility across the globe. Some of the Audi brands that compete with BMW are R18 hybrid. Audi also offers computerized control system in cars called multimedia interface (MMI). The advancement has come amid critics of BMW s I drive control. SWOT JPMorgan chase & co JPMorgan chase & co is an American banking cooperation of the securities and investment. The bank is among the oldest financial institution. In term of asserts, the bank is largest in US. Its total assets are more than $3.2 trillion and employs about 240, 000/ workers. SWOT Analysis Strength 1. Strong brand name and good financial position 2. Excellent customer service 3. Economic of scale 4. Global presence 5. Diversification. Weakness 1. Over-reliance on united state market 2. Rising competition from other financial service providers 3. Fluctuating market leading to instability 4. Unstable investment Opportunity 1. Expanding to other countries 2. Investment is all over the word 3. Diversification of portfolio for customer 4. Commercial banking Threats 1. Global financial crises 2. Changing government regulation 3. Stiff competition 4. Unstable mortgage market Discussion Strength 1. Strong brand name and good financial position- the bank has been operating for over 200 years. Its brand is well known all over the world. 2. Excellent customer service- the bank has rebranded several to suit the customer needs 3. Economic of scale: Largest bank in united state in term of market value and profits: this means that bank can withstand huge financial losses in a financial crisis. 4. Global presence and employee over 240,000. The bank has highly skilled employee from various part of the world. 5. Diversification. The bank has potential of offering a wide range of financial services. Weakness 5. Over-reliance on united state market 6. Rising competition from other financial service providers 7. Fluctuating market leading to instability 8. Unstable investment Opportunities 5. Expanding to other countries 6. Investment is all over the word 7. Diversification of portfolio for customer 8. Commercial banking Threats 1. Global financial crises: financial crises greatly affect the bank business 2. Changing government regulation: for instance Wall Street reform and consumer protection act 2010 affect all aspect of financial provision. The provision such as prohibition of property trading affects the business. In addition, such regulations greatly increase all fees the financial institution has to pay. 3. Stiff competition- stiff competition especial from small financial institution like well and Fargo can reduce the banks market share. 4. Unstable mortgage market Competitors Some of the banks key competitors are 1) Bank of America: this is the second largest bank in US in terms of assets; its total assets are in excess of $2.5 billion. The bank is the largest bank in US in term of the employee. The bank is undergoing tremendous change to reduce its cost; this is evident by recent laying off of the employees. 2) Citi bank: the bank offer diversified financial services such as banking, brokerage and deviates services. Citi bank is the largest bank in the world in term of geographic coverage. It is operating in 140 countries. In year 2012, the bank failed the stress test. This means that the bank cannot withstand huge financial loss in a financial crisis. The bank failed the test because it has high capital return from international loan. International loan are considered by the Federal Reserve as a high risk. Citi bank gets half of their revenues from international banks. 3) Well and Fargo: this is a national wide diversified community-based financial service company. The company provides services such as insurance, investment, mortgage, and banking. The company has had success in trading business, where large bank like JPMorgan chase & co, are retreating. A large proportion of its revenues is from traditional commercial and retail banking 4) Online banking: they are growing in number and taking a market share. Conclusion The JPMorgan chase & co bank will continue facing competition from its traditional big rival banks. Other smaller financial institution is also rapidly growing and will offer stiff competition in the nearer future. Online banking and mobile payments are some of the emerging issues in the sector. The practices are rapidly growing and are taking market shares of the bigger banks. Read More