SWOT Analysis of BMW | Business Teacher

703 words (3 pages) Swot Analysis

22nd Oct 2020 Swot Analysis Reference this

Tags: SWOT AnalysisBMWSWOTAutomotive

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Introduction

BMW started off as an aircraft manufacturing company in Munich which is the capital of Bavaria. Karl Friedrich Rapp a manufacturer of airplanes components, especially aircraft engines needed an external financial supporter for the expansion of his company. The company’s name was changed from Rapp Motoren Werke to Bayerische Motoren Werke which is the current (BMW). However, he got some troubles while expanding his business as the growth of his company was too rapid, which resulted to him leaving the company. Subsequently, Franz Josef Popp who was an industrial tycoon laid the groundwork of BMW in the absence of Rapp. From 1928, they produced “Dixi” which was the first automobile of BMW. It was preferred by majority of people and helped in its success. During World War II they were forced to stop all their aircraft productions. In the 1950s they improvised to produce new cars which were well received, that helped them through those times. After the war, it has been developing and evolving internationally while expanding its empires to companies such as Rolls-Royce and Mini.

Strengths

BMW tries to make an effort to produce environmentally friendly motors. It has manufactured almost 20 different types of automobiles which emit CO2 at only 140g per km. BMW also continues to manufacture more efficient cars as well as exploring new kinds of fuels that are more eco-friendly and cost efficient. Apart from BMW’s devotion to protect the environment, they are also committed to labors and society coordination. For instance, BMW invests huge sums on employees’ checkups, improvement of proportional working life, accepting requirements from suppliers and trying to reduce wastages at their plants.

Weaknesses

BMW is known as one of the automobile manufacturing companies that produce luxurious types of cars. However, a huge amount of expenditure is being used for employing experienced labor in order to produce vehicles of a higher quality compared to its competitors like Mercedes Benz, Toyota and Volkswagen. Due to the fact that most cars in BMW are made with premium automobile parts and requires skilled workforce, BMW’s products tend to be priced higher in contrast to their competitors in the automobile manufacturing industry..

Opportunities

Recent stringent changes in laws regarding vehicle emission standards can serve as an opportunity for BMW. The firm currently manufactures environmentally friendly vehicles that utilize hydrogen fuels which do not emit CO2. Thus, BMW would not have to invest additional resources to deal with the regulations. However, other competing companies may need to devote a large amount of money in an effort to adhere to the law which may result in a heavy loss of profits.

Threats

The competition between BMW and its competitive firms are increasingly intense with the competition focusing on motors prices apart from other discerning factors. With the growing the intensity of competition among automobiles companies, it is very difficult for any other automobiles firms to penetrate and settle in the global market. In addition, the supply of shale gas is increasing rapidly which would result in cheaper prices of future fuels causing a negative impact on electric cars and other kinds of environmentally friendly automobiles. Thus, it would probably lead to an enormous loss of profits to the main projects of BMW like the development of hydrogen cars and electric automobiles.

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