BMW Market Analysis

Introduction to Consulting - Course Work WT10
Market Analysis
BMW
Julia Schmidt, Lorenz Illing, Michael Fröse

1) Introduction
2) Market
3) Competitve landscape
4) Company´s positioning
5) Conclusion
23.11.2010 © Julia Schmidt, Lorenz Illing, Michael Fröse
AGENDA
2

1) INTRODUCTION
3

• founded in Munich,1917
• Acquisition of Rover Group in 1994
• Acquisition of Rolls-Royce in 2003
• 2009
• 1,3 mio cars sold
• 96,230 employees
• Revenue 50 € b
• most sold car: 3´ series
1) INTRODUCTION
BMW Group
4

23 production and assembly plants
in 13 countries
1) INTRODUCTION
Production
5

12 R&D plants in 5 countries
6
1) INTRODUCTION
Research & Develpoment

1,341,048 cars worldwide
21% Germany
21%
USA 14% India
GB 11%
24% Rest
of Europe
7% China
7
1) INTRODUCTION
Sold Cars in regions

78%
16%
6%
0%
BMW
Mini
Motorcycles
Rolls Royce
1,043,829
213,670
82,631
918
Total 1,341,048
2009
8
1) INTRODUCTION
Sold Cars in brands

2) MARKET ANALYSIS
9

product-oriented:
all companies that offer a combination of luxury and
powerful cars with a high level of quality and service
customer oriented:
car manufactureres such as Lexus (Toyota),Audi (VW),
Porsche (VW), Merzedes-Benz (Daimler).
2) MARKET ANALYSIS
Market deﬁnition
10

• The respective market for BMW consists out of the premium
segments of the global passenger car and motorcycle market.
• BMW is one of the leading luxury car manufacturers in the world.
2) MARKET ANALYSIS
Market deﬁnition
11

Rivalry
Among
Existing
Competitors
Threat of
New
Entrants
Bargaining
Power of
Suppliers
Bargaining
Power of
Buyers
Threat of
Substitute
P & S
2) MARKET ANALYSIS
Porters 5 Forces
12

Rivalry among existing competitors:
+ some competitors of the same size
+ Low industry and market growth rates
+ Barriers to exit are high (production facilities)
→ High
2) MARKET ANALYSIS
Porters 5 Forces
13

Threat of New Entrants:
+ high initial investments and ﬁxed costs
+ limited access to specialized suppliers
+ existing players have close customer relations (e.g. long-term
service contracts)
+ customer loyalty
→ Low
2) MARKET ANALYSIS
Porters 5 Forces
14

Bargaining Power of Buyers
+ Buy large volumes (e.g. company car for many large
companies)
+ Switching to an alternative product is relatively simple and not
related to high costs
+ Products are undifferentiated and can be replaced with
subsitutes
− Product itself of strategic importance to customer
− Customer knows about the production
cost of the product
→ Medium
2) MARKET ANALYSIS
Porters 5 Forces
15

Bargaining Power of Suppliers:
+ Supplier’s products are customized and valuably
differentiated
+ high switching costs to alternative suppliers
+ JIT production
− Market is dominated by many suppliers
(sub suppliers)
→ High
2) MARKET ANALYSIS
Porters 5 Forces
16

2) MARKET ANALYSIS
Porters 5 Forces
17
Threat of Substitute Products & Services:
+ close customer relationship
+ brand loyalty of customers is high
− No penalties or low switching costs for customers
− Current trends
→ medium

• retailers network
• military services
• company carpool
• franchise system
2) MARKET ANALYSIS
Distribustion Channels
18

2) MARKET ANALYSIS
Market Trends
-4
0
4
8
11
15
2009 2010 2011 2012 2013 2014
0
25
50
75
100
% growth million vehicles
19

• branding
• brand loyality
• brand awareness
• global positioning
• positioning in established markets
• positioning in growing markets
• innovation rate
• differentiation
• hybrid
2) MARKET ANALYSIS
Key Success Factors
20

3) COMPETITIVE LANDSCAPE
21

World Ranking of manufactureres in cars sold 2009 in thousands
1.Toyota
2) G.M.
3)VW
4) Ford
5) Hyundai
6) PSA
7) Honda
8) Nissan
9) Fiat
10) Suzuki
...
12) Daimler
...
14) BMW
...
41) Porsche
0 2.000 4.000 6.000 8.000
Cars CommercialVehicles
Market Structure
22

• no clear market
leader
• more than 50
competitors
worldwide
• many local car
manufacturers
Market Structure Toyota
12%
G.M.
10%
VW
10%
Ford
8%
Hyundai
8%
PSA
5%
Honda
5%
Nissan
4%
Fiat
4%
Suzuki
4%
2%
2%
Rest
27%
23

Direct Competitors
24

Indirect Competitors
25

• founded in Stuttgart in 1931
• ca. 100,000 cars sold in 2009
• 11,910 employees worldwide
• Revenue 7,3 b € in 2006
• Merged withVW in May 2009
• most sold car: Porsche
Cayenne Diesel in 2009
Porsche
26

• founded in 1989
• ca. 216,00 cars sold in 2009
• Revenue 12,6 b € in 2007
• division of its parent company
Toyota Motor Corp.
• most sold car: Lexus RX
Lexus
27

• founded in Stuttgart in 1926
• ca. 1,300,000 cars sold in 2007
• Revenue 52,4 b € in 2007
• division of its parent company
Daimler AG
• most sold car: CLK/SLK
Mercedes
28

• founded in Zwickau in 1909
• ca. 920,000 cars sold in 2010
• Revenue 29,84 b € in 2006
• wholly owned subsidiary by
VW since 1966
• most sold car:Audi A4
Audi
29

Cars sold (2009)
0 325.000 650.000 975.000 1.300.000
85.900
310.000
975.000
1.183.000
1.280.000
Porsche
Lexus
Mercedes
Audi
BMW
30

Net sales in mio € (2009)
0 12.500 25.000 37.500 50.000
7.466
12.680
41.318
29.840
50.000
Porsche
Lexus
Mercedes
Audi
BMW
31

Employees (2009)
0 25.000 50.000 75.000 100.000
12.202
11.520
97.000
58.011
100.041
Porsche
Lexus
Mercedes
Audi
BMW
32

4) COMPANY`S POSITIONING
33

Strategy
• The BMW Group is the leading provider of premium products
and premium services for individual mobility.
• New strategy Number ONE
• standing for 'New Opportunities' and 'New Efﬁciency'
• BMW Group's activities comprise
• the development, production and marketing of
motorcycles
• as well as comprehensive ﬁnancial services for private and
business customers:
34

STRENGTH:
• Strong brand image
• Strong R&D capabilities (DM)
• Strong product innovation
• High employee productivity
• Motocycle as niche product
• US military service
• High quality suppliers
• Steady decrease in Co2
emissions
• Strongest product: 3 Series
SWOT Analysis
WEAKNESSES:
• Poor performance of BMW in
asian markets
• Declining production and
deliveries
• Lack of scale compared to
competitors
• High wages
• Too less strategic alliences
35

OPPORTUNITIES:
• Car industry on road to
recovery
• Poised to beneﬁt from
increasing demand for hybrid
electric vehicles
• Growth in Asia
• Growing used car market in UK
• Moderate growth in global cars
market
• Rising green awareness
SWOT Analysis
THREATS:
• Competition in the global
automotive market
• Currency risk
• Environmental protection
regulations
• Recession in US and Europe
• Rising green awareness
36

5) CONCLUSION
37

TOWS Matrix
O T
S
•focus on BRIC countries by using brand
image
•considering green awareness to invest in
hybrid technologies
•investments in new products for leasing-
increase leasing contracts
•enter UK used car market with leased cars
(3` series)
•high global presence → reduce
currency risk
•new innovations to match EU vehicle
regulations
•strong brand image helps BMW to
overcome recession
W
•use BRIC countries to outweigh low
performance in these countries
•car industry is growing again → increase
production
•build new production facilities in Asia to
lower wages
•Lower wages → stay competitve
•lack of scale to competitors reduce
EU dependence on EU vehicle
regulations
•M&A to overcome lack of scale
compared to many strategic alliences
of competitors
38

23.11.2010 © Julia Schmidt, Lorenz Illing, Michael Fröse 39
New product development in China
• 1 series or 3 series on cost leadership basis
‣ diversiﬁcation strategy according to Ansoff Matrix
5) CONCLUSION
Possible Recommendation

23.11.2010 © Julia Schmidt, Lorenz Illing, Michael Fröse 40
5) CONCLUSION
References
• (2007).Annual Report Porsche Automobil Holding 2007
• (2009).Annual Report Bayreische Motoren Werke AG (BMW Group).
• (2009). Annual ReportToyota Motor Corporation (Toyota)
• (2010). Company Spotlight: Bayerische Motoren Werke AG. MarketWatch:Automotive, 9(4),
17-23. Retrieved from Business Source Premier database.
• (2010). DATAMONITOR: Bayerische Motoren Werke AG (BMW Group). Bayerische
Motoren Werke AG SWOT Analysis, 1-9. Retrieved from Business Source Premier database.
• Amrioul, N. (2009). Das Image von Automarken: Eine empirische Studie von Audi, BMW und
Mercedes Benz.VDM,Verlag Dr. Müller.

BMW Market Analysis

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