This is the in-depth BCG matrix analysis of BMW which is the renowned automobile company.

It’s the brand which is

famous for luxury cars and positioned in a same way in customer minds.
Introduction
BMW has been able to create market image as an automobile manufacturer that offers the customers with vehicles
that bring them comfort, along with a sense of luxury. Moving beyond the production of automobiles, the company’s
businesses have expanded into other domains such as motorcycles. In fiscal year 2016, BMW Group has recorded
revenues of € 86,424 million, suggesting strong financial performance of the company (BMW Group, 2016). The BCG
matrix is a useful tool when a business plans to analyze its products and identify the growth chances of its different
business segments. The framework divides products or business segments into cash cows, stars, question marks
and dogs. The application of BCG Matrix for BMW Groups would help to identify the profitable and risky ventures
being managed by the firm. The BCG matrix is elaborated is as follows:
Cash Cows
Some products that are being manufactured by an organization take a leading position for the firm in terms of
generating sales and revenues. Since these products are in high demand, the company is able to secure higher sales
and return on investment (ROI) from these items as compared to its other product ranges. All these products or
business units are considered as cash cows. They continue to offer financial support to the company, bringing in high
profitability and providing sustenance to the company’s operations, without needing massive investments to maintain
the profitability. These characteristics make the cash cows a suitable option for generating income to finance other
business units. BMW has some products which are high cash creating business units, thus earning the status of cash
cows for the company.
One of the main examples of cash cow products include Rolls Royce, which is a subsidiary of BMW. This segment
has been a prime source of financial earnings, driving the company towards growth over the years. In 2015, the
company has achieved more than 10% increase in net profits in the second quarter. This growth is attributed to the
higher demand of its cash cow, the Rolls Royce (Geiger, 2016). DeMattia (2015) has stated that the financial
performance of Rolls Royce division indicated the setup of record sales in the fiscal year 2015, with the highest
consumption of the luxury car in the US.
Stars
The second quadrant that has to be considered in the BCG Matrix is Stars. These products are the emerging items
that have good growth prospects in the future. The company needs to maintain steady investment in these categories
in order to make sure that the stars can become cash cows. The main feature of stars is that their industry has the
possibility of further growth, thus causing an increase in market share. These products already have a high market
share and the additional progress can make them a profitable venture for the organization. As a result, these items
are seen as adding long term value to the firm. The management needs to invest in these business units to help them
in further growth.
There are many products being managed by BMW which can be identified as Stars. For instance, cars included in
BMW series 5 such as Sedan and Touring are some of the cars that have been performing well. BMW Sedan is
specifically a popular car among the consumers in different parts of the world. According to BMW Group (2016), there
has been a significant increase in sales of its Sedan brand over the past few years, hinting at the high consumer
demand. BMW mini is another vehicle that can be placed in this quadrant due to its financial performance and future
growth prospects. The investment in BMW Mini is deemed as a profitable decision by the management, which has
sold an average of 250,000. The company has expanded the product line, adding new designs of the BMW mini,
strengthening the performance of its star product.
Question Marks
There are some products which do not show same level of promising future as indicated by cash cows and stars.
Instead, these products have a high degree of uncertainty, making them a part of the question mark quadrant. In case
of success, these items may provide the firm with the financial leverage, while the inability to gain a strong market
share can make these products a financial burden for the firm. An organization needs to analyze the success and
failure probability of these items to decide whether further investment is likely to fulfil the strategic and financial
objectives of the firm. The question marks for BMW is its SUV series which has been a profitable venture, however
it’s revenue generation potential has declined, resulting in loss of its market share in the luxury car segment. The
SUV business unit may be able to improve its financial performance in the coming months. The demand for SUV may
increase, helping the company to improve its market share. The industry has the potential to further grow, suggesting
at the future promotion of SUV brand into a leading position in the global automotive industry.
Dogs
The fourth quadrant in the BCG Matrix is represented by the products termed as Dogs. This category includes all
those business units or items that do not yield financial gain for the company. Instead, these items show poor
performance in terms of sales, revenues and future prospects. Another element which makes these products a
probable option for divestment is the low ROI as the company sees these items as cash traps. In some cases a
company continues to invest in these businesses, while in other cases the management decides to dissolve the
business unit or sale it. The BMW Z3 and Z4 cars have been identified as dogs as these vehicles have not been able
to gain similar amount of sales as generated by the other brands being produced by the company. The performance
of these vehicles was not up to the performance standard that other BMW cars have established, making the Z3 and
Z4 gain negative feedback from the customers.