Fuel prices are expected to rise in the near future Fuel prices have been low for the last few years and are expected to rise in the near future due to the changes in the supply. Low fuel prices have increased the demand for large vehicles such as pickup trucks and SUVs.
Thus scenario analysis is done to evaluate the likely views to predict the organizations future business environment Heijiden, In order to reach this conclusion PESTEL analysis is done to identity the key drivers of change that can be used to predict the scenarios for the future.
PESTEL stands for political, economical, social, technological, environmental and legal and forms of analysis of the macro-environment of the organization Thomas, The probable factors that affect the automobile industry are: Laws and regulations had affected the automobile industry since its outburst.
These laws generally revolved around the environmental norms that were to be fulfilled by any car industry. Thus the car manufacturers had to take care of the environmental issues during manufacturing of cars. Taxes and government foreign policies are critical for the automobile industry.
The foreign policies help to us decide the probability of success in the global market. Introduction of new schemes in the US and Europe automobile industry wherein regulations led to produce high mileage cars along with increase in automobile sales and production Hill, Economical factors Economical factors related to the exchange rates, economic growth globally and the business setting prevailing in the industry.
Economic factors for the industry are: Thus there was lot of revenue withheld even though demand was less than supply. Social factors Social factors include the changes in cultures and demo graphics globally apart from change in buying pattern and capacity of the consumer.
Social factors having an impact on the auto industry are: Changes in the customer predilection from car being a status symbol to fuel efficiency and low emission cars. Changes in buying pattern of the consumers due to recession in mature markets.
Environmental issues and awareness of the harmful emissions through automobiles Increase in use of technology to gain a clear competitive ad vantage Use of new and sophisticated design to overcome the decreased margins in the industry.
Stern application of the EURO norms set up to curb pollution in developing countries. The threat of new entrants in case of automobile industry is less as large capital cost is required to set up a manufacturing plant and assembly liner.
Also it takes time for new entrants to get a place and the reputation in the minds of the consumers. BMW has a brand image of being powerful and luxurious. Thus the threat of substitutes for BMW is high.
Bargaining power of buyers: BMW and its competitors are positioned as in exclusive product range. Here the bargaining power of buyers is high because the consumers can decide the product according to the price range and buy the products accordingly.BMW Business Strategy and Competitive Advantage.
The report also illustrates the application of the major analytical strategic frameworks in business studies such as SWOT, PESTEL, Porter’s Five Forces, Value Chain analysis and McKinsey 7S Model on BMW Group. Strategic analysis of the BMW Group ABSTRACT The BMW Group is a leading manufacturer within the premium segment of motor vehicles.
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This report analyzes the strategy of the company and evaluates it with regards to long-term valuecreation as well as sustainability.