How loyal are customers to your brand Price sensitivity How well differentiated your product is Availability ofsubstitutes Having a customer that has the leverage to dictate your prices is not a good position. Bargaining power of suppliers This relates to what your suppliers can do in relationship with you.
Passenger Cars in Use Fig. Competitive Rivalry — Automobile Industry Fig. Internal and External Analysis 1. In particular, the automobile industry plays an important role within the global environment, because of their strong linkages within the global economy Haugh, Mourougane, and Chatal The increased international commitment of car manufacturers is driven by, on the one hand issues of limited opportunities in their respective home markets and, on the other hand, superior opportunities in emerging markets such as China or India Lang et al.
Therefore, motives for entering new markets can be either proactive, for example, expand market share, lower costs or the availability of resources or they can be reactive, for example, to remain competitive Rao For instance, German car manufacturers are faced by a highly competitive home market, not only within the mass market, but in the premium market as well Business Monitor International BMW, for instance, has been proactive by taking the opportunity to enter new markets such as China where it has produced cars since BMW Group However, these are just a few emerging economies where the company seeks its opportunities.
Emerging economies such as Brazil offer auspicious potential for foreign investors as well Keese and Farinha While other companies just consider investments in emerging markets, BMW already benefits by exporting its cars to Brazil Reuters Consequently, BMW has to investigate the Brazilian market very thoughtfully.
The aim of this report is to critically analyse and evaluate the automobile industry as well as the business environment in Brazil with reference to BMW.
Furthermore, the report identifies recommendations to develop a long-term market entry strategy in order to act successfully in the market. BMW within the Global Automobile Industry The global automobile industry is characterised as very capital intensive by means of high material and labour costs Heneric, Licht and Sofka Therefore, the industry is very distinctive when it comes to competition and manufacturers have to market their products to a large extent Datamonitor Passenger cars account for roughly 79 per cent of the total value of the industry Datamonitor In terms of units sold the global market grew from to by 7 per cent and attained a total volume of nearly million units and passenger cars accounted for 85 million units Datamonitor It is expected that the global industry will be achieve a total volume of million units by which equals a rise of approximately 36 per cent since Datamonitor When considering the growth related to their origin it can be pointed out that developed countries are declining, for instance, Europe, while emerging regions like Asia and Latin America are increasing their total volume Euromonitor International The figure indicates that the BRIC economies gain higher growth rates compared to developed countries and that these countries providing and facilitating very well prospects for car manufacturers, for example, BMW see appendix for further background on BMW.
Passenger Cars in Use own figure with data sourced from Euromonitor As a result, BRIC economies account for nearly 20 per cent of total passenger cars in and it is increasing very considerable Euromonitor International It is estimated that by BRIC states will account for 30 per cent of global car sales Lang et al.
As already pointed out, the opportunities are tremendous. Global players within the industry are Ford, Toyota and Volkswagen which have a combined market share of roughly 20 per cent of the global automobile market Datamonitor Further pressures within the competition are safety, product quality as well as overall efficiency and research and development of alternative drive concepts Datamonitor Apart from that, Mercedes Benz is the only premium manufacturer, but stopped producing its A-Class in Brazil and switched to heavy trucks production Reuters This can lead to an advantage for BMW as its overall sales are increasing in Brazil by 50 per cent annually Reuters Nevertheless, the production stop of the A-Class could be a signal that the premium market is still not profitable in the country.
The possibility of new entrants is relatively low, because it takes high capital investments to enter the market, for instance, research and development, advertising and buying the facilities Datamonitor Furthermore, access to distribution channels may be difficult as manufacturers have integrated backwards.
Hence, the likelihood of new entrants who are able to compete is low Datamonitor The bargaining power of suppliers can be contemplated as moderate. Manufacturers are able to source their materials globally. Therefore, they are not reliant to suppliers to a large extent or they form partnerships with suppliers in order to reduce their power.
DatamonitorEhmke et al.
Although buyers can put pressure on manufacturers by ordering large volumes as well as switch to other companies in order to achieve price discounts, buyers tend to be loyal and the forward integration of companies lead to a moderate buying power Datamonitor Despite of that, automobile manufacturers have to consider local wants and needs related to the product such as quality, price and features.
For example, emerging regions may have other patterns of demand unlike developed countries and should be considered thoughtfully.
|Popular Topics||Business level strategy helps to provide competitive advantage to the organization.|
|Table of Contents||With a population count totaling 82 million inhabitants, Germany is the most inhabited member country of the European Union. It goes without saying that the country is very developed ensuring a high standard of living for its inhabitants through a universal health care system, tuition-free education, social security, and environmental protection.|
|BMW SWOT Analysis||Nonetheless, in the model we recommend, the fundamentals remain the same.|
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Automobiles are just one type of transportation mode and further modes of transportation are public transport, airplanes as well as trains and ships.
As a result, automobiles can be substituted with different transport modes, but it is depending on price, distance and accessibility. The main substitute of new passenger cars are used cars Datamonitor Used cars were especially attractive within the economic crisis from onwards.
With a view to rise car sales many governments offered scrappage schemes BIS Nonetheless, new regulations imposed on emissions and the discontinuation of scrappage schemes as well as that imports of used cars are not allowed in Brazil lowers the risk of substitution ITA BMW Group Report contains the full discussion of BMW SWOT analysis.
The report also illustrates the application of the major analytical strategic frameworks in business studies such as PESTEL, Porter’s Five Forces, Value Chain analysis and McKinsey 7S Model on BMW Group. UK Essays is a UK-based essay writing company established in We specialise in providing students with high quality essay and dissertation writing services.
SWOT Analysis of BMW with USP, Competition, STP (Segmentation, Targeting, Positioning) - Marketing Analysis BMW is one of the leading car manufacturers in the world and known across the world for its cars.
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In order to adjust the marketing strategies of BMW and Porsche and improve their competitiveness in the market, some recommendations are presented as follows.
In the first place, developing the business in the luxury market and meet the needs of wealthy customers, the strengths of BMW could be improved. UK automobile industry is affected by economic, socio-cultural and technological environment. So, for adding value through corporate strategy BMW needs to introduce latest model in the same market with same product with wide choice for the Benefit of the customers.