Germany is one of the leading car manufacturer industries in the world. The German automotive market convinces customer preferences around the world with companies like Volkswagen, BMW or Daimler, as confirmed by export rates of 190 billion euro through vehicles and components in 2012 (Frankfurter Allgemeine Zeitung, 2013).
The Bavarian automobile manufacturer BMW is one of these highly regarded and ven-erated automobile brands. The enterprise BMW Group assert their top position in the premium segment with a new record in global sales of about 2.1 million automobiles in 2014. The additional brand MINI could hold the level of its sales from the previous year and, for the first time, Rolls Royce Motor Cars was able to increase the sales over 4.000 units in 2014, and thus assert the position as the market leader in the absolute luxury segment. Hawranek (2008) and Reithofer, chief executive of BMW, (BMW Group, 2015) emphasise that the company remain faithful to its strategy to continuously hold the position as the world’s top seller in the premium class.
The elaboration will present an environmental analysis of the BMW Group in the automotive industry with help of the principles of a PESTEL-Analysis. After a general over-view of the automotive industry in the 21st century in chapter 2, each point of the PESTEL-analysis will be processed separately in chapter 3. The conclusion in chapter 4 in-cludes the results, an overall assessment of the BMW Group and recommendations considering the focus of the business strategy.
Table of Content
1. Introduction
2. Automotive industry in the 21st century
3. PESTEL Analysis for BMW
3.1 Political
3.2 Economical
3.3 Social
3.4 Technological
3.5 Environmental
3.6 Legal
4. Conclusion
4.1 Critical discussion and overview of results
4.2 Overall assessment of the BMW Group
4.3 Recommendations for business strategy
Objectives and Topics
The primary objective of this seminar paper is to conduct an environmental analysis of the BMW Group within the global automotive industry using the PESTEL framework to evaluate strategic influencing factors.
- Analysis of the current state and competitive dynamics of the 21st-century automotive industry.
- Application of the PESTEL framework to identify political, economic, social, technological, environmental, and legal influences on BMW.
- Evaluation of BMW's market position, innovation strategies, and sustainability efforts.
- Development of strategic recommendations for future business management based on identified risks and opportunities.
Excerpt from the Book
3.1 Political
Government regulations restrict most manufacturers as well as BMW in points of, for instance, political stability, missing trade agreements and congestion charges on vehicles. These aspects are affiliated to legal factors (cf. 3.6) whereby the decisions are set up by political authorities.
Regarding to the political stability, if BMW focuses on the headquarter location Germany, it is obvious that since Germany is politically highly stable, there is no reason to fear political conflicts or riots, however, it possesses a high tax burden which could be a clear competitive disadvantage. The political instability respectively risk of conflicts in emerging markets such as China, Brazil and Russia can not only have negative influence on local customer spending patterns, but also investments in these regions may be afflicted with risks. Also, assembly plant locations like Egypt need to be taken more seriously (Lagi, et al., 2014).
Another point illustrates the use of free trade zones. Chief executive Reithofer insists on a free-zone area between USA and Germany, since all SUVs are manufactured in the US plant Spartanburg. The export of these vehicles to Europe costs 10 per cent duty which is due to an increasing popularity of SUVs in Europe a distinct disadvantage (BMW Group, 2015; DIE WELT, 2014).
Furthermore, governments of several countries want to or already launched congestion charge zones such as the UK did in London which is also a distribution area of the BMW Group. This is a result of the enforcement of new laws related to CO2 emission which is picked up once more in part 3.5 and 3.6. However, when governments decide to distribute scrapping bonuses, it stimulates the buying of automobiles in the short term (Hansen, 2010).
Summary of Chapters
1. Introduction: Presents the relevance of the German automotive industry and defines the scope of the PESTEL analysis regarding the BMW Group.
2. Automotive industry in the 21st century: Provides a general overview of the global competitive environment, market sectors, and key industry trends.
3. PESTEL Analysis for BMW: Detailed examination of political, economic, social, technological, environmental, and legal factors impacting the company's operations.
4. Conclusion: Summarizes the key findings, assesses the BMW Group's current standing, and provides strategic recommendations.
Keywords
BMW Group, PESTEL Analysis, Automotive Industry, Strategic Management, Innovation, Sustainability, Market Analysis, Economic Factors, Political Stability, Environmental Regulations, Technology, Global Strategy, Risk Management, Premium Segment, CO2 Emissions
Frequently Asked Questions
What is the core focus of this paper?
The paper examines the external environment of the BMW Group by applying the PESTEL framework to understand how various macro-environmental factors influence the company's strategic decision-making.
What are the primary thematic areas covered?
The core themes include the competitive dynamics of the automotive industry, the impact of global political and economic conditions, social demographic changes, and the shift toward green technologies and environmental sustainability.
What is the research goal?
The research aims to evaluate BMW's current market strategy and provide recommendations for future business strategy by identifying major external risks and opportunities.
Which scientific methodology is applied?
The analysis is based on the PESTEL model, which categorizes external environmental factors into Political, Economical, Social, Technological, Environmental, and Legal domains.
What does the main part of the paper address?
The main part focuses on the systematic analysis of the six PESTEL pillars, specifically looking at how they apply to the BMW Group's production, marketing, and innovation efforts.
Which keywords characterize this study?
Key terms include PESTEL Analysis, BMW Group, automotive industry strategy, environmental regulations, sustainable mobility, and global market competitiveness.
How does the aging population impact BMW?
The study notes that an aging population presents a twofold challenge: difficulties in recruiting qualified labor and the need for new vehicle innovations specifically designed for seniors' physical needs.
What role do patents play in BMW's strategy?
Patents represent a critical component of the "patent war" in the automotive industry; the paper suggests BMW should increase its patent activity to remain competitive with rivals like Toyota in the field of new driving forces.
How does the paper assess BMW's environmental impact?
It highlights BMW's "EfficientDynamics" project as a key strategy to meet EU emission targets and reduce the carbon footprint of its production and vehicle fleet.
What strategic recommendation is given regarding emerging markets?
The author advises concentrating foreign trade and marketing efforts on BRIC-states, particularly China, due to high growth potential, predicted surplus capital, and a large population that has yet to adopt individual mobility.
- Citar trabajo
- Anonym (Autor), 2015, PESTEL-Analysis of BMW, Múnich, GRIN Verlag, https://www.grin.com/document/295081
