ABOUT THE COMPANY

BMW (Bayerische Motoren Werke) in English (Bavarian Motor Works) Group is the leading
car manufacturer and seller in the world. BMW Group is a German company and
manufacturers of automobiles and motorcycles. BMW Group is the parent company of
BMW MINI and Rolls Royce car brands.
BMW was founded by Karl Friedrich
Rapp in 1913, under the name of BFW
(Bayerische Flugzeug-Werke). But due to
difficulties of over expansion, Rapp left
and the company was owned by Franz
Josef, an Austrian industrialist in 1917.
The headquarters of BMW Group is in
Munich, Germany, the famous four
cylinder building which was developed
in December 1971.
BMW Group employs more than 1
million employees in more than 40
countries. BMW Group has worldwide
subsidiaries and manufacturing plants in Germany, the UK, the USA, Egypt, China, South
Africa, Brazil, South Africa etc.
CURRENT BUSINESS STRATEGY OF BMW GROUP
The business strategy of BMW Group is based on having a powerful brand image. This
strategy forms the foundation of the success of the BMW Group. BMW Group believes in
maintain core values as technology, innovation, performance,
quality, reliability, exclusivity and customer satisfaction. The
company slogans of BMW Group in English i.e. The Ultimate
Driving Machine and Sheer Driving Pleasure give us an
overview of the marketing strategy it adopts.
The strategy of BMW Group is clearly defined on the homepage
of the company i.e.
Identify potential and encouraging growth. Knowing what we
represent. Recognizing where our strengths lie and making the
best use of every opportunity. Goals we have attained are in essence the point of departure
for new challenges.
Product/process design is also a key costs driver. Product design meliorations can help in
labour productivity, better yield and maximum utilization of working capital. Product design
can also be used to gain competitive advantage over its rivals with simple use of marketing
intelligence.
BMW was considered to be the best when it came to product/process design and was
tipped as an engineering excellence. It was highly dependable, influential and lavish. BMW
also restored new and modern technology for its products thus marketing maximum
utilization of the working capital available.


MARKETING STRATEGY OF BMW GROUP
The success of any company is based on how effective marketing and advertising strategy it
adopts. BMW Group adopts a marketing campaign of targeting its customers. In the slogans
i.e. The Ultimate Driving Machine and Sheer Driving Pleasure. BMW tells its customers
and other people that BMW cars give a pleasure in driving that no other car can give.
The marketing strategy of BMW also consists of a strong advertising strategy. WCRS has
been BMWs advertising agency since 1979 and have really made a great brand image for
BMW by advertising campaigns including famous actors like James Bond, Tom Cruise etc.

SEGMENTATION, TARGETING AND POSITIONING
Segmentation for BMW:
BMW Group has a strategy of targeting their customers by using segmentation.
Geographically, BMW Group targets the areas that are more industrialized like Europe,
North America, some parts of Asia and Africa
i.e. China and South Africa. More than 70% of
sales of BMW cars are recorded in Europe
and North America.

BMW Targeting:
BMW Group targets people who are aged
between 25 and 40 because these people
have a successful image. By, these people
have a clean modern look and a feel good
factor. BMW Group focuses on being labeled
as a luxury car and a foreign or
international car, so BMW Group does not
look to target one ethnicity or citizenship.
The aim of BMW Group is to target
customers that have an income of 25,000
Pounds.

BMW Positioning:
There is a quotation on the website of the
BMW Group, which says that the image that
BMW Group has positioned itself in
exclusivity, performance, quality,
technologically advanced producer in the
world. The markets BMW position
themselves are very competitive.
Most of the people value a feeling of safety
while using BMW, which positions BMW
Group ahead of its competitors in customer satisfaction.

MARKETING MIX
4 Ps of marketing i.e. Product, Price, Promotion and Place is called the Marketing Mix.
Furthermore, marketing mix will be used to further research that marketing strategy of
BMW.



1. Product:
BMW Group wants an efficient and dynamic look to their products. The major emphasis of
BMW Group is on product innovation and development.
The latest versions of BMW Group include BMW
1 Series,
3 Series,
5 Series,
6 Series and
7 Series,
BMW Z4-Roadster etc.
The most recent version of MINI includes the MINI Countryman.
In recent times, BMW Group has started making smaller cars, which shows the companys
innovative structure. Also because of the increasing competition in car industry, BMW
Group has to come up with some new innovative cars to compete with its competitors. In
2009, BMW Group was named as Greenest Premium Manufacturer by Clean Green Cars
website and wins accolades at Fleet news awards 2009 for fuel saving.

2. Price:
The prices of BMW Group are based on a differentiated strategy. This means that they
charge extra for premium quality. This difference in prices is due to each cars different
engine size, gear levels, fuel consumption, sports version.
The pricing strategy that the BMW Group adopts is based on several key trends. One most
important trend of BMW is labeled as premium-tization.
Premium-tization trend of BMW causes polarization of markets. This trend triggers the
consumers to demand and pay much higher prices for the perceived quality.



3. Promotion:
The BMW Group uses different slogans and advertisements for the promotion of its
products. WCRS has been the advertising agency of BMW Group since 1979. The company
invests a large amount of money for their cars in films e.g. the film The World Is Not
Enough. James Bond drove the new Z8 before the car was launched and in Austin Powers
3-Goldmember the MINI Cooper was used. These advertisement techniques have really
helped BMW Group in their promotion of the cars. BMW Group also promotes its cars by
using slogans such as The Ultimate Driving Machine and Sheer Driving Pleasure.

4. Place & Distribution:
The website of BMW Group regarding Placement and Distribution say that BMW have 156
dealers in the UK who are franchised to sell BMW cars, additionally 148 dealers are
franchised to sell MINI Cooper. Worldwide BMW operate in 100 different countries with
over 4.400 dealers which are authorized to sell both new and used cars, parts and after
sales service products.














COMPETITORS OF BMW
BMW Group is the leading premium car manufacturer in the world. In recent years BMW
Group has been closely
marked by its competitors.
The major competitors of
BMW Group include
Mercedes, Audi, Lexus, Ford,
Porsche, Jaguar, etc. But the
two major competitors of
BMW Group are Mercedes-
Benz and Audi.
In this situation BMW Group
has to maintain a strategy in
which BMW Group has
advantage over its
competitors in the long run.




SWOT INTERNAL ANALYSIS
Strengths Weaknesses
1. Brand reputation
2. Environment friendly vehicles
1. High cost structure
2. Weak brand portfolio
3. Quality products
4. Highly skilled workforce
5. Corporate Social Responsibility (CSR)
6. Strong brand presence in China
3. Perception of high prices
4. Too few acquisitions and strategic
partnerships
Opportunities Threats
1. Increasing fuel prices
2. Positive attitude towards green
vehicles
3. Expand brand portfolio
4. Changing customer needs
1. Intense competition
2. Rising raw material prices
3. Decreasing fuel prices
4. Growing euro exchange rate
Strengths
1. Brand reputation. BMW brand is the third most valuable automotive industry brand in
the world valued at $29 billion. In 2012, Forbes has also listed BMW as the most
reputable business in the world.
2. Environment friendly vehicles. The company tries to develop environment friendly cars
by making them more efficient. It offers nearly 20 models that emit CO2 as low as
140g/km. To make BMW cars more environment friendly firms engineers develop new
types of fuels, such as hydrogen, too.
3. Quality products. BMW is valued on its engineering capabilities, skilled workforce and
quality products. BMW recalls their cars less often and at lower numbers than most of its
competitors do.
4. Highly skilled workforce. Quality cars require premium materials and skilled workforce
and BMW employs only the most skilled workers to produce its vehicles. BMW sets up its
assembly plants at the countries, such as USA and Germany, where there is only the
most skilled vehicle assemblers.
5. Corporate Social Responsibility (CSR). BMW is strongly committed to the environment
protection, employee and community well-being and sustainability programs. The
company invests large sums in employee health management, programs promoting
balanced work life, sustainability requirements for its suppliers and producing zero waste
at its plants.
6. Strong brand presence in China. Over the last few years, BMW has seen strong sales
growth in China, the largest automotive market in the world. In 2012, BMW sold 326,444
vehicles there.
Weaknesses
1. High cost structure. Producing quality cars and hiring skilled workforce results in high
costs for the business. BMW cost structure is higher than of its biggest competitors such
as Toyota, GM and Volkswagen.
2. Weak brand portfolio. BMW Group manufactures and sells only 3 brands: BMW, MINI
and Rolls-Royce. Although these brands perform well in their segments, they are unable
to serve larger market needs. Therefore, BMW has to introduce more brands to its
portfolio to meet diverse consumer needs.
3. 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.
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.
Opportunities
1. Increasing fuel prices. Increasing fuel prices open up large markets for BMW hybrid
and hydrogen cars as consumers shift towards cheaper fuel types.
2. Positive attitude towards green vehicles. Today consumers are more aware of the
negative effects (air pollution) caused by cars fueled by petrol and diesel. Large
quantities of CO2 emissions intensify greenhouse effect and negatively impact the life on
earth. Thus, consumers are more likely to buy new hybrid and hydrogen fueled cars that
emit less or no CO2 at all.
3. Expand brand portfolio. In order to grow at a higher rate, BMW should expand its brand
portfolio to meet more needs and to satisfy larger consumer market. The company could
introduce new models that arent currently included in its range.
4. New emission standards. A new wave for stricter regulations on vehicle emission
standards would positively affect BMW position in automotive industry. The firm produces
one the most ecological vehicles and has introduced hydrogen fuels that emit zero CO2.
New vehicle emission regulations would mean 0 additional investment for BMW while its
competitors would have to invest large sums of money to comply with regulations and
lose a share of profits.
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 fueled 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


PESTEL ANALYSIS
Political factors
Political factors highlight the probable government laws and regulations, security measures
and restrictions that can apply to the industry as a whole. The probable factors that affect
the automobile industry are:
1. Laws and regulations had affected the automobile industry since its outburst. These
laws generally revolved around the environmental norms that were to be fulfilled by
any car industry. Thus the car manufacturers had to take care of the environmental
issues during manufacturing of cars.
2. Taxes and government foreign policies are critical for the automobile industry. The
foreign policies help to us decide the probability of success in the global market.
3. Introduction of new schemes in the US and Europe automobile industry wherein
regulations led to produce high mileage cars along with increase in automobile sales
and production.

Economical factors
Economical factors related to the exchange rates, economic growth globally and the
business setting prevailing in the industry. Economic factors for the industry are:
a) There was excess capacity of cars produced thus giving rise to high amount of revenue
in marketing and new product designs. Thus there was lot of revenue withheld even though
demand was less than supply. For example the UK auto market had excess 80% capacity in
2003 which freeze 1.3 billion euro of the automobile industry (autofacts, 2004).
b) Total increase in the GDP globally from 2.0% to 3.1% in the year 2008 (statistics, 2008).
c) Decrease in the exchange rate if euro has hampered the European car makers in a big
way (Allen, 2006).
d) Economic downturn in the US market (Copper, 2008)
e) Surplus capital and buying power in the developing economies like India and China and
their personal emergence in the global market place.

Social factors
Social factors include the changes in cultures and demo graphics globally apart from change
in buying pattern and capacity of the consumer. Social factors having an impact on the auto
industry are:
Changes in the customer predilection from car being a status symbol to fuel
efficiency and low emission cars.
Changes in buying pattern of the consumers due to recession in mature markets.
Environmental issues and awareness of the harmful emissions through automobiles

Technological factors
Increase in use of technology to gain a clear competitive advantage
Use of new and sophisticated design to overcome the decreased margins in
the industry.
Modifications or restriction on technology causing environmental pollution
Environmental factors
Increasing effect if awareness of global warning, greenhouse effect and
burnout among patrons (organization, 2008)
Shift in consumers tastes and preferences towards use of more eco-friendly
cars, hybrid cars, fuel cell cars etc.
Stern application of the EURO norms set up to curb pollution in developing
countries.
Legal factors
Restrictions and strict pollution norms set up in European and US markets
Strict implications of the EURO norms in developing countries e,g, formation
of BHARAT norms on the lines of EURO norms in India(CEN, 2006)

SWOT MERCEDES
SWOT Analysis
Strength
1. Mercedes Benz has a strong brand value and global leader in
premium cars
2. Lack of capital constraints
3. Leader in innovation i.e. 1
st
to introduce diesel engines, fuel
injection and anti-locking brakes
4. More than $12bn allocated for R&D
5. Strong presence in motor sport under McLaren Mercedes
6. Manufactured and assembled in over 20 countries across the
world
7. Mercedes holds patents on the majority of safety features
Weakness

1. High maintenance cost of Mercedes Benz cars
Opportunity
1. Developing hybrid cars and fuel efficient cars for the future
2. Tapping emerging markets across the world and building a global
brand
3. Fast growing luxury automobile market & increased income
Threats
1. Government policies for the automobile sector across the world
2. Ever increasing fuel prices
3. Intense competition from global automobile brands