BMW Essay Example | Topics and Well Written Essays - 1750 words

BMW - Essay Example BMW's turning point came when they started to cater this market. They started producing motorbikes and expensive luxury cars branded the best in the world. Acquisition of Rover group in 1994 and the Rolls-Royce in 2003 were the other major milestones in their history. Today their annual revenue crosses 50 billion Euro's and they employ over 96,230 employees in 23 plants spread over 13 countries. They have 12 R&D centres in 5 countries. They sell over 1,341,048 cars worldwide. 78% of their sales comprise of their conventional BMW cars. BMW MINI series cars capture 16% of their sales while their stupendous sports motorcycles capture 6% of their sales (Illing, 2010). They sell over 2000 Rolls Royce cars per year too. BMW adopted various strategies to reach this position in such as short period. The company’s strategies are worth examining as they will help any company manage its competition quite effectively. PEST Analysis PEST stands for political, economical, social and technol ogical. This method is used to analyse the macro-environment of an organization. Such an analysis is done when high level of doubt prevails over the way the external environment responds to changes. It is necessary to determine whether the organizational policies are compatible and sufficient to meet the external environment. ... BMW takes care to comply with all the policies to avoid getting in trouble with the government. Economical Factors affect the automobile industry and BMW in general. The exchange rates and the economic growth of the countries like India and China make them emerge as worthy competitors in the market. Stagnancy of stock due to overproduction and economic slowdown is also a major issue. It might occur due to global economic slowdown or decrease in the exchange rate of Euro at any time. Social Factors: The recession, changing customer buying behaviour and increased eco awareness had made people look at cars as an important and useful commodity rather than a status symbol. They want their cars to give more mileage and be environmental friendly rather than just luxurious. Technological factors prevalent in the industry affect the BMW the most. They should keep upgrading themselves regarding the new technology in production as well as marketing. Everything from the latest Bluetooth facility to modern GPS systems should be incorporated in the cars to make it attractive while they still have to stick with the original design. The Key Drivers of Change From the analysis we can conclude that the major factors that contributed to change in BMW are 1. The need to advance technologically 2. Environmental regulations 3. Deployment of hi-tech infrastructure as well as qualified manpower Adaptability or changing its strategies according to the external environment is called consonance (Rumlet, 1980). It is the most important factor driving successful change in the industry. Porter’s five forces Analysis (Porter, 1985) Porter's Five Forces Analysis Threat from Substitutes: Medium BMW is associated with engineering excellence and ultimate luxury. So, the threat for