The automotive industry is facing the biggest changes in its more than 100 years of existence. At the end of this decade, the first electric vehicle is going to enter the mass market that can compete on product features, comfort and price with the internal combustion engines. People keep moving into urban areas. The requirements toward future mobility increase. Some countries already decided to prefer electric vehicles to conventional cars. Profits will shift to other markets or segments. Incumbents must align their current strategies to keep their market share in the future and participate in future profit pools of the automotive industry.
BMW and Tesla have different strategic approaches to the upcoming changes in the industry. BMW, as many other OEMs, is aware of future challenges and disruptive forces and has much more resources to manage the required investments in R&D than smaller start-ups. However, disruptive forces come from lower functionality and low-cost products that are usually overlooked by dominant firms in an industry.
This research analyzes the two automotive companies BMW and Tesla by using the common strategy analysis tools. First, the firms’ external environment is analyzed by using the PESTEL analysis, describing relevant trends that affect the strategic decision of the two companies. An industry overview with future projections is provided.
Secondly, an internal analysis is performed. SWOT analysis and the VRIO framework form the basis to define the strengths, weaknesses, unique recourses and capabilities of BMW and Tesla.
The conclusion provides an overall discussion of the most important findings emerging from the analysis with regard to the business operations and the existing business models of the two car manufacturers. Furthermore, important implications for the adaption and adjustment processes are discussed.
Table of Contents
1. Introduction
1.1 Problem definition
1.2 Methodology
2. Theoretical Background and Literature Review
2.1 Strategic Management
2.2 External Analysis Framework
2.2.1 The Macro-Environment
2.2.2 Competitive Forces - The Five Forces Framework
2.2.3 Key Success Factors
2.3 Internal Analysis Framework
2.3.1 SWOT Analysis
2.3.2 Generic Competitive Strategies
2.3.3 VRIO Framework
2.4 Related Work and Additional Concepts
3. Analysis of the Automobile Industry
3.1 Industry Overview
3.1.1 Market Size and Growth Rate
3.1.2 Transition to Autonomous Driving
3.1.3 New Mobility Business Models
3.1.4 Future Profit Pool
3.2 The Macro-Environment
3.2.1 Political Factors
3.2.2 Economic Factors
3.2.3 Social Factors
3.2.4 Technological Factors
3.2.5 Environmental Factors
3.2.6 Legal Factors
3.3 Industry Competition
3.3.1 Competitive Forces - The Five Forces Framework
3.3.2 Key Success Factors
3.3.3 Competitors and Markets
4. Comparative Analysis of BMW and Tesla
4.1 BMW Group
4.2 BMW Corporate Strategy
4.2.1 BMW Strategy Number One > Next
4.2.2 BMW Group SWOT Analysis
4.2.3 BMW Group VRIO Analysis
4.3 Tesla Motors Inc.
4.4 Tesla Corporate strategy
4.4.1 Tesla Master Plan 2016
4.4.2 Tesla SWOT Analysis
4.4.3 Tesla VRIO Analysis
4.5 Financial Performance of Tesla and BMW
5. Results and Key Findings
6. Conclusion and Suggestions for Further Research
7. Bibliography
Research Objectives and Themes
The primary objective of this research is to analyze and evaluate the distinct corporate strategies of BMW Group and Tesla Motors in response to the disruptive technological and socio-cultural shifts in the automotive industry. The thesis aims to determine how established traditional automakers versus Silicon Valley start-ups navigate the transition toward autonomous, connected, and smart mobility.
- Strategic comparison of traditional automotive business models versus new mobility solutions.
- Evaluation of industry-wide shifts toward autonomous driving, car-sharing, and ride-sharing.
- Assessment of firm competitiveness using established strategic management tools (PESTEL, SWOT, VRIO, Porter's Five Forces).
- Investigation into financial health, R&D strategies, and production scaling capabilities.
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1. Introduction
The auto industry is a global multi-billion-dollar industry with many large players and a highly competitive business environment. The automakers have to continuously innovate their products to keep market position and customers. The next decade is going make this competition even harder. Globalization leads to an increasing competition among all automakers. The auto industry is considered to be highly capital and labor intensive. New entrants have to make huge investments in R&D, production or sales infrastructure. However, the market entry barrier was lowered by the latest disruptive technologies and the increase of engineering services and contract manufacturers in the industry.
The current business model of carmakers is mainly based on selling internal combustion engine vehicles directly to customers. The industry is extremely competitive, caused by the maturity of this industry. “Dieselgate” by VW forced OEMs to rethink their strategy. Global sales of passenger cars reached over 70 million vehicles in 2015. Over the next decade, connected and autonomous vehicles will lead to another revolution in the automotive sector. The global market for autonomous driving hardware components is expected to grow from 400 million U.S. dollars in 2015 to 40 billion U.S. dollars in 2030. The emergence of autonomous, connected and smart vehicles will affect the whole industry and create new potential for business models and new competitors around individual transport. Car- and ride-sharing, driven by socio-cultural changes, will also affect the auto industry forcing the business leaders to start questioning the existing business model. The shift will likely affect far more than automakers, but the auto industry will probably go through the biggest changes first.
Summary of Chapters
1. Introduction: Outlines the highly competitive nature of the global automotive industry and introduces the technological and socio-cultural forces driving its transformation.
2. Theoretical Background and Literature Review: Details the strategic management tools and frameworks, such as SWOT, PESTEL, and VRIO, used to evaluate the two companies.
3. Analysis of the Automobile Industry: Provides an overview of global market trends, focusing on the transition to autonomous driving and new, service-oriented mobility business models.
4. Comparative Analysis of BMW and Tesla: Executes a detailed strategic comparison of BMW Group and Tesla, examining their corporate strategies, strengths, weaknesses, and financial performance.
5. Results and Key Findings: Synthesizes the analysis, highlighting how each company is positioning itself for the future shift from car manufacturing to mobility services.
6. Conclusion and Suggestions for Further Research: Offers a final assessment of the strategic outlook for both firms and proposes directions for future academic inquiry.
Keywords
Automotive Industry, BMW, Tesla, Strategic Management, Business Model, VRIO, SWOT, Porter’s Five Forces, Electric Vehicles, Autonomous Driving, Car-Sharing, Ride-Sharing, Connected Mobility.
Frequently Asked Questions
What is the fundamental focus of this thesis?
The thesis focuses on a comparative strategic analysis of BMW and Tesla, exploring how they manage the industry-wide transition toward autonomous, connected, and smart mobility.
What are the primary thematic areas covered?
The work examines industry structure, the macro-environment through PESTEL analysis, internal resources through VRIO, and the strategic positioning of the two companies within the automotive sector.
What is the core research question?
The research asks which company possesses a better strategy to handle the disruptive transformation of the automotive industry over the coming decade.
Which scientific methods are utilized?
The study employs qualitative strategic management tools, including PESTEL analysis, Porter's Five Forces, SWOT analysis, and the VRIO framework.
What does the main body of the work address?
It provides an in-depth look at the automotive industry overview, macro-environmental factors, and a side-by-side corporate strategy evaluation of BMW and Tesla.
What keywords best characterize this work?
The work is defined by terms such as Strategic Management, Electric Vehicles, Autonomous Driving, Business Model, and Automotive Industry.
How does Tesla's business model differ from BMW's?
Tesla operates as a vertically integrated mobility solutions provider that emphasizes software and charging infrastructure, whereas BMW remains a traditional, premium car manufacturer transitioning toward integrated service provision.
Why is the "Silicon Valley" branding an asset for Tesla?
It attracts high-quality, motivated talent and fosters a culture of innovation and agility that is difficult for traditional competitors to replicate.
How does BMW leverage its existing assets for the future?
BMW utilizes its strong brand heritage, financial profitability from ICE models, and massive R&D capacity to restructure toward new electric and autonomous initiatives.
- Arbeit zitieren
- Master of Business Administration Andreas Kauerhof (Autor:in), 2017, Strategies for Autonomous, Connected and Smart Mobility in the Automotive Industry. A Comparative Analysis of BMW Group and Tesla Motors Inc., München, GRIN Verlag, https://www.grin.com/document/354483
