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1 Name BMW ANALYSIS. BMW (Bavarian Motor Works), is a company under the automotive industry which manufactures automobiles and motorcycles. The company has a SIC Code 3711 - Motor Vehicles and Passenger Car Bodies and NAICS Code 336111 - Automobile Manufacturing. The BMW AG operates in many industry segments. I choose to analyze the automotive segment which deals with the development, the manufacturing, assembling and the selling of cars, accessories and their respective spare parts. In 2019, the global automotive industry was on course which had a 2.4 percent growth in terms of GDP. In spite of the slower performance of this industry as compared to the previous years, the economy continues to grow every day. The estimated total industry size for the automotive, which includes the secondary businesses such as that of the spare parts and the services is $4 trillion (Schmitt, 2020). Some of the key players in the automotive industry include Volkswagen AG located in Germany, General Motors in the US and the Toyota Motor Corporation in Japan. The industry is among the highly concentrated in world. Despite the fact that the industry has a wide range of products and that the players have an equal opportunity to present new inventive products, this market has persistently been owned by a few top companies. The average profitability remains high with a percentage of 6.0 in 2016. BMW shows a higher than the average profitability which is in the range of 8 percent to 10 percent. The life cycle of this industry has shortened in the last five years. This shortening can be attributed to the necessity to meet the consumer demands, and the contribution of expert partners. This will increase the profitability. The PESTELs analysis of the BMW AG shows the main factors which have contributed to the success of the company. From the political factors, the company has been affected by

2 aspects such as new rules and regulations as well as the political dishonesty. But as compared to other companies, this company has a financial muscle and a well branded image which can enable it to have a positive influence on its growth, in spite of this setbacks. On the economic factors, the world fluctuations in terms of the economy has influenced its performance aspects such as the profits and the product valuations. Also tariffs which increase the overall raw materials for its vehicle productions have greatly affected the company. Despite this, it has continued to expand its territories as seen from the opening of new production lines in the northern Carolina. The social factors in this analysis which have affected the company includes the social media presence of the company. It has a huge following in the social media pages such as the Facebook page which has over 13.5 million fans and the company uploads daily posts about its products. This is a nice strategy aimed at having a positive influence and creating the positive image.in legal matters, the company obeys many rules imposed all round the world which includes the copyright laws. Whilst the company has many rivals, like the Toyota, it has continued to project good result in the market in terms innovativeness thus standing out. The five forces analysis are the factors which are influencing the intensity of competition and the ability of the automotive industry to make profit. In our case, the BMW AG industry of automotive isn’t left behind as these factors have a relevance to the same industry. One of these factors is the intensity of the rivalry in the industry. In spite of the fact that new entrants cannot enter the market and make an instant impact, the existing competitors are making advanced steps in terms of marketing strategies and research in developing new cutting-edge technologies. Luxury brands such as tesla are investing daily in digitization of safer models. This has lead to BMW focusing on designing vehicles with good customer experiences and its increased investments in research. Another factor is the threat of substitutes, which has an overall effect of

3 heightening the threat of customer demand and the profitability of any brand. The threats also include rival sources of transportation such as flights. But the company neutralizes these threats by producing fashionable cars which makes it classy and stand out of this competition. The bargaining power of suppliers is also another factor which in this industry, the suppliers tend to be many as compared to buyers. The BMW supplies are powerful, but the company moderates this because it has a market world word and has partners which makes it favorably profitable for any of the suppliers. The factor of bargaining power of customers, which is increasing due to competitors, is moderated by the BMW producing quality products and best customer experience. I a nutshell, the automotive industry is a very attractive industry to invest in. One of the key success factors is the position of a company in the industry. This is based on assumption that a company which has a large market share will always persist in being the leader in price setting. On the other hand, it’s a favourable position can give it a better change of developing resistance to unfavorable developments in the market. Another key factor is the company’s product range. Here, the capacity of a company to develop a variety of products will give it a better chance of surviving in the market. The marketing a distribution strategy of the company in this industry also plays an important role. A good marketing and network distribution policy leads to increased revenue creation in certain market locations. Among the strategies employed by companies in this industry is the strengthening of trust with their customers. This helps the companies to be more focused with the customer requirements and have a quick response to changes in the behavior of its customers. Other companies in this industry are strategizing on managing their internal competency and becoming more adaptable by partnering with suppliers who have competency in new technologies. Future options for the companies in this industry include a shift

4 towards new technologies such as vehicles manufacture of electric vehicles as well as selfdriving in order to counter competition.

5 Appendix. PESTLE ANALYSIS CHART. POLITICAL FACTORS Introductio n Of new policies  Corruption in the political systems 

ENVIRONMENTA L FACTORS  Co2 emissions  Fuel usage by cars

LIFE CYCLE CHART.

SOCIAL FACTORS •Cultural differences in different market countries  Social media presenc e

TECHNOLOGICA L FACTORS 



This include the technological innovations and adaptations Autonomous driving

ECONOMI C FACTORS •Global economic fluctuations affecting the evaluation of companies  tariffs

LEGAL FACTORS 

copyrigh t laws

6

FIVE FORCES CHART Bargaining power of suppliers

Bargaining power of customers

Threat of substitutes

Threat of new entrants

Intensity of Rivalry

7

References. Schmitt, B. (2020). Auto Industry 101. Today: How big? Retrieved 9 February 2020, from https://dailykanban.com/2015/03/auto-industry-101-today-big/

Arboletti, A., Torresani, G., Palle, N., & Segerberg, P. (2014). U.S. Patent No. 8,781,882. Washington, DC: U.S. Patent and Trademark Office. Tang, D., & Qian, X. (2008). Product lifecycle management for automotive development focusing on supplier integration. Computers in industry, 59(2-3), 288-295. Alvarez, E. A. PESTEL FRAMEWORK....