This paper aims to develop a report on strategic management for a business, called BMW. This paper conducts a strategic analysis of BMW’s business, In the first part of this business, the finding of PESTLE analysis shows that BMW getting both opportunities and challenges from political terms, economic terms, social and technological issues, legal and environmental factors. The finding of Porter’s five forces analysis shows that BMW faces a highly competitive situation and customer bargaining power, wherein other terms it is getting opportunities due to lower threat of entry, substitute and bargaining power of suppliers. The analysis of McKenis’s 7S model shows that BMW giving higher concentration on strategy, skills, shared values and style in comparison to structure, system, and staff. The finding of Ansoff’s growth matrix analysis shows that MBW is mainly focusing on product and market development, rather than penetration and diversification.
Table of Contents
2.0 Company background.
3.0 Environmental analysis of BMW.
3.1 PESTLE analysis tool
4.0 Competitive environment analysis.
4.1 Porter’s five forces model
5.0 Strategic analysis of BMW.
5.1 McKinsey 7S model analysis for BMW.
5.2 Ansoff Growth Strategy analysis for BMW.
According to Johnson et al. (2014), strategy is the organizational scope or direction that helps an organization to achieve its competitive advantage in its changing environment by maintaining the business resources as well as fulfilling the expectations of the stakeholders. Spender (2016) said that the term ‘business strategy is a set of different actions that are mainly used by a business organization to compete with its competitors successfully by attracting target customers and to achieve the organizational goals and objectives properly. The selected organization for this assignment is BMW which is the luxurious automobile company in the world. This assignment includes two parts. The first part of this assignment describes the environmental analysis, competitive analysis, strategic analysis of BMW. For environmental analysis, the PESTLE analysis tool is used and for competitive analysis, Porter’s five forces model is used. On the other hand, the McKinsey 7S model, blue ocean strategy and the growth strategy are used. In the second part, this assignment describes how BMW can identify and profitability can exploit the uncontested market spaces.
2.0 Company background
BMW (full form Bavarian Motor Works) is the multinational organization of Germany that produces high-quality automobiles, motorcycles and aircraft engines (since 1945). In the year of 1961, this automobile company was first founded where it is headquartered in Munich, Bavaria. Different automobiles and other vehicles are produced by BMW for different countries such as Germany, China, Brazil, South Africa, UK, the US and India. BMW has become the 12th biggest motor vehicle producer in 2015 in the world where it produced about 2,279,503 vehicles (BMW Annual Report, 2017).
3.0 Environmental analysis of BMW
3.1 PESTLE analysis tool
Farooq (2018) said that PESTLE is the analytical tool for the strategic planning of a business to understand how the external factors influence that business’s operations. PESTLE includes six key factors such as political factor, economic factor, social factor, technological factor, legal factor and environmental factor. These factors of a business are analyzed effectively through the PESTLE analysis (David, 2018). BMW is the leading German car manufacturer in the world. This company gains about 2.1 million sales in 2014 as well as holds the sales in the luxury segment (BMW Annual Report, 2017).
A number of common political factors including the introduction of new rules, regulations and policies, different political corruptions affect BMW’s business. As BMW is the leading automobile company, it gains huge profits and has a good brand image to its customers. That means it has a great impact on different government policies for its company growth. About 15 production companies around the world work for BMW (BMW Annual Report, 2017). Though BMW’s manufacturing system is very effective it can be maintained by different rules, regulations and policies of governments of different countries.
In addition, BMW is affected because of the political instability in two different ways. First of all, political instability can affect the capability of the customers of BMW to directly buy their automobiles because different countries (such as China, Russia or Brazil) have different political concerns. Secondly, if BMW has invested in the political instability in different countries, then the investments in those countries may be at the risk (BMW International, 2019)………………………..