SWOT ANALYSIS
SWOT analysis is a method for identifying organization’s strengths, weaknesses, opportunities and threats. SWOT analysis evaluates what an organization can or cannot do in terms of both internal as well as external factors. Conducting a SWOT analysis determines the factors that will assist the firm in achieving its objectives. SWOT also identifies the factors that must be minimized or overcome to attain the desired result.
In BMW, we found several of strength, weaknesses, opportunities and threats. For strength, consists of one of the most successful auto brands in the world, advertising, high budget, competence in hybrid and electric cars, geographically diversified sources of income, perfect engineering and excellent driving experience and last is high skilled labour. Then, for weaknesses consist of poor automotive brand portfolio, human resources, unable to meet demand, lack of performance appraisal, increasing debt level, diversification in the workplace, and worker morale is low. Next, for opportunities consist of New Series, Increase profitability by innovation, Autonomous driving technology, strategic partnership, green vehicle, digital marketing and last popularity in developing countries (China & India). Then, as for threats consist of competitor (Volkswagen, Mercedez-Benz, Audi), price factor, increase cost in raw material, chinese car manufactures, economic fluctuations, shortage of skilled workforce, and last is rise in fuel price.
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From SWOT analysis, we make an Internal Factor Evaluation (IFE) and External Factor Evaluation (EFE). Internal Factor Evaluation consists of strength and the weaknesses. Then, as for External Factor Evaluation consists of opportunities and threats. The purposes from the evaluation is to summarize and evaluate the factors given which will give the highest impact in the organization. Before we make an evaluation, there are FIVE steps that need to be followed which are list down the factor in sequence, assign a weight range from important to very important, assign a response rating for each factor, multiply the weight by its rating for the weighted score, and last sum all the weight score.
Then, from our observation in BMW. In the strength, brands is the highest influence in the company. We know that BMW is one of the most successful automotive brand in the world. Then, as for weaknesses, BMW get the highest rate by poor automotive brand portfolio. Next, for opportunities the highest rate goes to the new series in BMW. We know that BMW always have an idea to produce new series time by time. Then, last for the treats is, the highest rate is in term of their competitor like Audi, Mercedez-Benz, Volkswagen and many more.
STRENGTH, WEAKNESSES AND OPPORTUNITIES IN BMW
Next, move to the opportunities of BMW. The first opportunities that we have, research is by introducing new models of BMW series. They should declare a new models of cars that from a different markets that can target a group of lower class by providing luxury cars that suitable for their ability but still giving them more than what they are expected for their cars. BMW has a chance of producing new models. As for now, people always keep waiting for new models of cars release especially from BMW models. Therefore, a new models car of BMW is expected to match our newly technological advancements from time to time. This is one of the reason why car’s brand need to release new cars often to meet consumer demands or needs, so BMW is one of the good choice to fill this need as people always demanding the new models from BMW.
Then, growth the profit by the innovation make by BMW. From the innovation make, BMW should get a chance to increase their profit of BMW Group. Then, as we can see on the innovation side, BMW has get good relationship with alpine among others to modify the BMW cars to make sure it is more interesting to attract the customers. For example, as we know that in 2012, BMW Group get the highest sales as 1.845,186 Group of BMW vehicle are sold. Then, we can see that any innovation that BMW comes out for their cars, it’s always make people more attract to change for a new models especially for the people who are make BMW as their favorable cars.
Next, autonomous-driving or self-driving technology. With advancing technology, we believe that BMW can make their cars more advanced in term of the driving the cars. We know that now BMW has a very great or good plan for their vehicle to make it as the safest cars, which fully with advancing technology introduce. Other than that, this technology was introduced to make sure people with a BMW car can bring or feel the best experience while driving with BMW cars.
Other than that, strategic collaboration with BMW Group. The collaboration or we can say it as a partnership that make by BMW Group with the other group is one of the main reason or main goals to strength their relationship with the other group. Other than that, BMW can promote their brand around the globe to make it more well-known for the people. Other than that, from the collaboration, BMW also can share what are the innovation that make by them, which bring the customers to purchase their brand. Other than that, BMW also make an agreement with Brilliance China Automotive Holdings Ltd. in China. The Brilliance China Automotive Holdings Ltd. is one of the company that have a great technology and in China this company known as one of the technology leaders. One of the main goals from the collaboration from Brilliance China Automotive Holdings Ltd. is to form a BMW Brilliance Automotive (BBA). From the collaboration make, who knows BMW can use their advancing technology to put in their brand also. However, other than from Brilliance China Automotive Holdings Ltd., BMW also have a partnership with Toyota Motor Corporation and Peugeot Citroen.
Next, BMW also one of the green vehicle. Nowadays, we know that customers becomes more aware about environmental protection and negative thinking of petrol and diesel cars. So that BMW emphasis on green vehicles. It will definitely create the strong position in the future when the firm produce most ecological vehicles, which comply with new reduced vehicle omission regulation. Alternatives fuels can power green vehicle and advanced vehicle technologies include hybrid electric vehicles, plug-in hybrid electric vehicles and many more. Electric cars now have been more popular around the other brands of car and not only in BMW cars. However, for the people who are the fans of BMW car will feel happy if BMW car also introduce green vehicle in the cars. We know that, right now people around the world are more demand on the emissions free vehicle especially for brand cars like BMW. This is because BMW will continually produce cars with a green vehicle. Then, in 2013, BMW had released its first electric vehicle BMW i3.
Then, popularity in developing countries (China & India). China is now the second most important market for BMW Group while India retains number 1 spot in India’s luxury market. Then, if the BMW get popularity their brand in China and India, it will make the sales of the BMW increase time by time because we know that China and India is among the developing countries. Then, when BMW starts operation in India at January 2007, BMW cars start to known around the people at that particular country. Other than that, BMW also record worldwide sales in 2013 and this is one of the great achievement for BMW. The BMW Group also had its best first six months ever at the start of 2013. Then, BMW Group also increased sales by 6% to 954,521 cars including BMW cars and mini cars.
Lastly for the opportunities in BMW is digital marketing. For BMW, with the introducing of digital marketing, customers or people will more aware of the existence of BMW brand. We know that right now people are trying to get any information from the digital marketing platform. This is because, digital technology can attract more people as we can promote our brands at many ways. Other than that, BMW also can promote their brand in their own websites. BMW should make the website for their own company to make it easier for people to search or get know everything about the BMW Group. Then, from the website make it will promote the brands around the world. The, from the promotion make, people will get engage with anything that BMW update about their cars either in term of introducing new models, or in term of the price of the cars, or it can be in term of the strength of the BMW cras compare to the other cars. So, from digital marketing, the company should make something to attract the people to feel interested to purchase the cars
THREATS IN BMW
Then, we move to the threat. Firstly is, competitor. Competitive pressure in the car industry has grown. There are several car brands in the world which investing aggressively in technology, marketing and driver safety to grow their market share. BMW’s competitors are their biggest threat. BMW, Mercedes and Audi have always been in competition producing similar cars. However, BMW has always been on the top but in recent years Mercedes and Audi. We know that each brands had produce cars with better design, technology or the cost itself also each of the brand have their differences but it depends on the people itself which one will make them more attract.
Secondly is price factor. More people will be price conscious one day. In the future, luxury cars will stop receiving as much attention as people will no longer demand on luxury cars. Nowadays, we know that people are becomes price conscious. If the price keep increase from time to time, the people will no longer feel attract to purchase it especially for younger generation as their income still not too large. BMW one of the highest price car in the cars industry and for now the price of the BMW still not too highest but one day the price will rise time by time. Then, at that time, people will considered money they will use for something more valuable and they do not think luxury car are part of their goals.
Thirdly is increase cost in raw material. Cost of raw material are growing for each year that will lead to higher operating cost. If they are facing this issue, due to rise in costs of raw material, it will lead to less profit and higher input costs. As the technology use are more advancing from time to time, so the cost of raw material also will increase. Exactly, BMW wants the best technology for their cars, but increasing cost of raw material will make the cost of the car higher than usual. Then, if the people are no longer afford to buy, the income of the BMW Group will decline from time to time.
Fourthly is Chinese car. They produce cars similar with BMW but with better technology and at lower price. BMW take a plan to joint venture with Brilliance Auto to produce BMW cars to Chinese market. We know that China is the largest market in the world, so the Chineese cars also can make the BMW Group decline their income. However, BMW maintain on China’s luxury car market. Although Audi started, making cars in China but BMW still command a strong following among Chinese car buyers. China is crucial in the race to be the world’s top luxury brand but BMW is still maintain the world’s No. 1 luxury-car brand.
Next, Economic fluctuations. We would never expect the economic fluctuations that will happen. The word have their ups and down in term of the economy sector. For now, the economic still grown but in the future we can’t expect that the economy will fall. If the economy still stable around the world, the sales of BMW cars also will stable. However, if the economy will fall in the future, the sales of the vehicle also will decrease. Moreover, we can’t expect anything from the uncertainty market that will happen. So, not only for BMW brand, the other brands also shoul get ready in terms of economic fluctuation in the industry. Other than that, it will effect on the import & export of the cars. This is because how BMW going to import or export if the economy will fall in the future. It will consume a lot of money in term of import or export the cars.
Then, shortage of skilled worker. When there is shortage of skilled worker, means it will slow down the manufactures of cars. Every industry will get involved with this kind of situation and not only for BMW. Then, in preventing this threat, around 2007, leaders at a BMW train plant in Germany, it were concerned about declines in productivity as their workers aged. They anticipated the average age of workers would rise from 39 to 47. Then, BMW come out with an idea to avoid shortage of skilled worker by developed a pilot project for one of the most labor-intensive production lines with workers to reflect workforce projections. Moreover, BMW Group should come out with a back up plan to avoid the shortage of skilled worker in the future.
Lastly for the threat is rise in fuel price. We cannot expect when the fuel price will arise, but from time to time we need to get ready. However, BMW need to adapt with to the need of green fuel and green machine. Rise in fuel price have a great impact to BMW’s performance, as BMW’s cars are known to be a lot of higher in consumption of fuels. BMW needs to strongly adapt to the need of green fuel and green machines so that it can absorb the potential customers who are looking for green car solutions, especially in the mature markets.
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