Bmw Swot Analysis

Opportunity and Threat Analysis through SWOT
Strengths
1. Brand reputation. BMW brand is the third most valuable automotive industry brand in the world valued at $29 billion. In 2014, Forbes has also listed BMW as the most reputable business in the world. BMW has a reputation for luxury and refined quality. The BMW brand relates well to the domestic owner reinforced by BMW 's reputation for quality, reliability and their dealer‟s attention to service. Respected as the „ultimate driving machines‟ and leading the field in a whole host of classes, BMW are constantly innovating in their quest to stay ahead of their competitors.
2. Environment friendly vehicles. The company tries to develop environment friendly cars by making them more efficient.

High prices. BMW manufactures luxury cars that require best quality materials, skilled workforce and a great brand image. All this results at a higher car prices that are often considered as too pricey compared to other car prices. Manufacturing costs compared with other volume producers, BMW‟s manufacturing costs are much higher, its product development process more costly, and its purchasing costs are higher because its suppliers are the industry‟s best; and the workforce among the industry‟s most talented which is stated as one of BMW‟s strengths, but can be a weakness as having the „best‟ and „most talented‟ does not come cheap.
4. Too few acquisitions and strategic partnerships. 90% of BMW growth is organic and only 10% is from acquisitions. Without acquisitions, the company finds it hard to grow even with exclusive engineering capabilities. Thus, if the company wants to grow significantly, it has to acquire more brands and enter into more strategic partnerships.
5. Competitors: One of the biggest threats that BMW realized was the increasing number of competitors that are now directly competing with it in its market segments namely „executive‟ and „luxury‟. Volkswagen produced models which competed, with BMW in the executive saloon segment. At the luxury end, Daimler-Chrysler‟s Mercedes brand competed with BMW 7-series. Toyota directly targeted BMW through introducing their luxurious Lexus model. With its low cost, high performance and quality Toyota was able to compete

Market segment: Through the acquisition of Rover, BMW will be able to increase its market share and cover a wider market segments. Rover was competing with BMW in its segments plus it produces cars in segments that BMW was planning to enter. Thus the opportunity in acquiring Rover from BMW perspective was quite beneficial.
Threats
1. Intense competition. BMW faces increasing competition from its direct competitors and now tends to compete on price rather than differentiation. Moreover, the markets for luxury cars are saturated in the developed economies, thus intensifying competition.
2. Rising raw material prices. Rising prices for raw metals will lift the costs for auto manufacturers and result in squeezed profits.
3. Decreasing fuel prices. Due to increasing extraction of shale gas, future fuel prices should drop and make electric, hybrid and hydrogen cars less attractive. This creates huge losses for BMW most ambitious projects, hydrogen fuelled and electric cars.
4. Growing euro exchange rate. BMW earns part of its profits outside the euro zone. Exchange rate fluctuations threaten BMW profits if the euro will start appreciating against other currencies.
(BMW Group