Strategic analysis automobile industry

Essay by marco23University, Bachelor'sB, October 2004

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This assignment will focus on BMW as a whole. BMW is a Public Limited Company (PLC) in the Private Sector and their main objective is to make profit and cover their costs. A board of directors undertakes the day-to-day running of BMW. Being in the private sector they raise most of their capital though the sale of shares and of course their cars.

Using a PESTAL Analysis, Porter Five Forces Framework, Resource Audit and a Value Chain Analysis recommendations will be made to BMW about any opportunities or possible threats there are in the car market.

Key Factors Affecting BMW

There are many factors that are affecting BMW's current situation (see Appendix 1,2,3 and 4), however the focus in this section of the assignment is the main factors from each of the analysis that have been completed.

The following information was collected using the PESTAL framework. "The PESTEL analysis categorises environmental influences into six main types, political, economic, social, technological, environmental and legal.

It is particularly important that PESTEL is used to look at the future impact of environmental factors, which may be different from their past impact" (Johnson and Scholes 2002).

Environmental Influences


"'The Government's own analysis shows that keeping motoring costs constant, by increasing fuel prices, will help it meet its targets to reduce congestion and pollution' (Friends of the Earth, 2003). With an increase of prices customers will change to fuel-efficient cars, BMW must take note of this and manufacture those types of vehicles" (Appendix 1). Currently BMW's have large litre engines making them expensive to run.


"The table below shows that consumer expenditure and savings have been growing in real terms since the mid-1990s along with PDI". This means that the general public has more disposable income to spend on...