Introduction

The BMW Group is the only manufacturer of automobiles and motorcycles worldwide that concentrates entirely on premium standards and outstanding quality for all its brands and across all relevant segments. With the brands BMW, MINI and Rolls-Royce Motor Cars, the BMW Group has been focusing on selected premium segments in the international automobile market since the year 2000. In the succeeding years, the launch of the BMW 1 Series meant an expansion of the model range in the premium segment of the lower middle class and the BMW 6Series did likewise in the segment of the large Coups and Convertibles. The MINI marque was launched and production began in the Oxford plant in 2001. In2003, the BMW Group assumed marque responsibility for Rolls-Royce Motor Cars.

So therefore it is very important that BMW considers its environment that it operates in before beginning the marketing process. It should feed all aspects of planning. Clearly analyze the external influences affecting the development of the marketing strategy. There are numerous factors that have an effect on BMWs business and the consequences of its operations, a few of which are beyond the control of the Company. The following information below is an explanation of some of the mainly important factors that may cause the definite results of the Company's operations in potential periods to change essentially from those at present expected or most wanted. A PEST analysis will help to identify factors of the external environment which are considered to be opportunities and threats in the market.
What are external macro environments/industry environment

The global car market started decline in 2003, led by market falls in North America and Western Europe. Other regions of the world led by East Asia are seeing further car market expansion in 2003. In 2004, projections for livelier economic growth underpin the resumption of car market growth in Western Europe and North America. Although the more stringent laws can eat away at companies' earnings, they also provide the stimulus to develop new technologies and markets. The major external factor affecting the current situation of BMW is that industry structure is becoming more and more concentrated. In this era of auto-industry consolidation, BMW is seen as a medium-sized business which could face problems in the future if it doesn't take into consideration strategic alliances. One of the external economic factors is that in the last years a large degree of overcapacity has been experienced in the car industry running at 20% to 30% in Europe. This overcapacity has been caused by a drop in demand and sales, probably because of a global economic instability which has led consumers to reduce spending on non essential goods. (Johnson 2008) The decline is brought about by lower car demand in North America and Western Europe, both relatively mature car markets that have been adversely impacted this year by high energy prices and fragile consumer sentiment. The automobile industry is becoming more and more competitive, with 6 major groups which have been formed in the last 3 years. Strategy is a perceived pattern in actions past or yet to

come. It is a label applied to patterns in action; strategy evaluation requires a consideration of both current and likely future results against the resources committed to the strategy. BMW has never compromised on its product quality and engineering superiority and has delivered the promise that people have expected from this brand: Power, Performance and Luxury. BMW's business strategy has been perfectly aligned to its overall brand strategy, and that's what makes them so successful. BMW has always designed and built cars with much greater responsiveness to a drivers actions, providing a better sense of the road beneath and offering greatly enhanced control. BMWs tighter feel and enhanced responsiveness gave drivers the sense they were in complete control, something no other brand of automobile offered. This handling advantage was greatly appreciated by sports car aficionados and car enthusiasts. BMW's brand incorporates the five senses perfectly. The roaring sound of a BMW engine is a music to the ears of performance car lovers and sports car enthusiasts. For the car lovers all over the world, there cannot be a prettier sight than a BMW speeding away in front of them on a clear highway. A general product life cycle and doesnt take that into account. BMW doesnt use a skimming strategy because its uses a more prestige pricing strategy to find its target market. BMW gains most of its sales in the last couple years of a product, while most products begin to decline. Marketing Strategies: 3 Series, the strategy to be used in this model is the S.T.P (segmentation, targeting and positioning) to find out what my target market is. This may use multicultural marketing to target more Asian countries and try to expand the product life cycle. For X5 a skimming/penetration strategy and offer discounts and rebates until the price settle to equilibrium. This would work because it would cover allot of the costs of research and make the customer think their getting a bargain. Also would use brand personality to make the X5 seem like a sophisticated with extraordinary off-road capabilities. This would make the car seem more exciting and put BMW the term ultimate driving machine synonymous with each other.
corporate analysis in terms of strength, weaknesses, opportunitiesand threats (SWOT) will assist in gaining an understanding of where BMW iscurrently in terms of strengths and where improvement is required within thebusiness and what outside environmental threats it may face as well as what newopportunities are available to the company in the short and medium term. Figure 1:BMW SWOT Analysis

STRENGTHS

OPPORTUNITIES

Diverse ranges of Products - BMW,

New Products

MINI and Rolls-Royce Strong Cash Flow Position Increase turnover and trading profits Strong Balance Sheet

Market shift to globalisation Innovation & Alliances

Customers demand change to more comfortable and relevantly cheap cars Diversification New Technologies in Automobiles

World's leading Premium Quality Automobile Manufacturer Brand Awareness Human resources

Capabilities to turn resources into advantages

WEAKNESSES THREATS

Perception of High Prices Customer disinterest Environmental issues: Pollutions Buyer sophistication and knowledge Substitute products or technologies

New & existing competition Volatility in Price of Fuel New legislations Consequences of the oil crisis September 11th Economic recession Market shift to globalisation Takeover bids

Far-East Automobile companies expansion Extremely high competition for customers and resources

The Five Forces Model Figure2: Five Forces Model - ACCA Paper 3.5 (2001)

Threats from Potential entrants Suppliers Bargaining power Competitive Rivalry Buyers Bargaining power

Threats from Substitutes

Porter explains that there are five forces inherent in markets, which will jointly determine the intensity of competition and profitability of BMW and the automobile industry. The first is the threat posed by new entrants, the high capital expenditure and confidence of customers represent significant barriers to entry and the market is also sensitive to reputation. However, the emergent of low cost manufactures do pose a significant threat . There is an opportunity in the low price/ low economy (fast) sector. May be Hyundai or Daewoo could consider introducing a low cost sport saloon. The second is the threats from substitutes, as there are many make and model of other premium branded cars, hence, Jaguar, Mercedes Benz, Audi etc. The third force is the threats from the bargaining power of buyers, is this strong for both BMW and the entire automobile industry with a large number of alternative suppliers, hence, the aggressive pricing strategy? This results in a very strong competitive rivalry in the industry. This is intensified as a result of little or no differentiation in the basic product offered. Finally the threats from the suppliers bargaining power, this is fairly low in the automobile industry, due to dual sourcing strategies, using arrange of alternative sources of supply for parts. The five forces analysis gives an improved understanding of the degree of competition within the business environment. The analysis shows that the automotive industry is highly competitive, with buyers possessing and exerting a very powerful influence to the large number of substitute brands available to them.

Strategy for the growth of the BMW

The BMW Group is about to implement a fundamental strategic realignment. This will primarily involve one of the three following options: First: a major acquisition or merger. Second: a restructuring along with mass layoffs. Or third: a brand-new business model. Strategy will lead the BMW Group through some fundamental changes: 1. We will consistently align the BMW Group to achieve profitability and increase value over the long term. 2. We will create the basis for ensuring the Group's long-term growth. 3. We will share the company's success with our shareholders to a greater extent. 4. We will start a program to tap into efficiency potential amounting to billions. 5. We will engineer new technologies in the field of mobility within the scope of an innovation initiative. 6. We will focus even more on our customers. They will be the benchmark for all our activities.

All of this will ensure the company's success and safeguard the Group's independence.