SWOT Analysis and Strategic Direction of BMW

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Strategic Profile and Case Analysis Purpose
BMW was founded early in the 20th century, and at first, it was an aircraft engine manufacturer. In 1928, the company diversified into the automobile and motorcycle industry. The company was struggling as an aircraft engine manufacturer, and the motor vehicle and motorcycle industry seemed to have a bright future. After WWII, the company built the 501, which was technically advanced and of high quality. It is the root of BMW specializing in high-end cars, which the management believed that the company’s small production capacity was best suited to luxury cars with high-profit margins. 1973 was another major turning point for BMW when it turned to produce more fuel-efficient cars due to the oil crisis. Sales of gas-guzzling volume-produced performance cars slumped, and BMW started to develop a strong skillset in more fuel-efficient turbo-diesel engines. In the 90s, during the technological boom, BMW started to leverage o new technologies to improve comfort and user experience. During this time, they developed active steering technology, making all four wheels to steer. In their pursuit to improve and remain a luxury brand, they also developed iDrive, a knob that helps the driver interact with the car system and features without taking his/her eyes off the road. The technologies BMW has been developing in the last three decades are to improve performance and enrich the experience for the user.
Market demands have shaped the strategic direction for BMW over the decades. Initially, its production capacity was relatively small; hence it invested in producing high-end luxury cars. In the 70s, the oil crisis forced the company to invest in pursuing and integrating more fuel-efficient technologies such as hybrid technology and more fuel-efficient engines. Technology in the 90s shifted the market, and consumers started wanting new technologies integrated into their car, such as infotainment systems, Emergency Stop Assistant, assisted parking, lane keeping, etc. This trend has not died down, and consumers are seemingly yearning for self-driving cars that are environmentally friendly. This is the reason BMW has invested in developing fully more efficient and less environmentally pollutive autonomous cars to serve its clientele in the coming decades
Assumptions
Self-driving cars will optimize their consumption by themselves based on road conditions and acceleration and braking behavior.
Electric cars and smart charging infrastructure may at some point converge on autonomous automobiles, such that gasoline could become obsolete.
Identification of Environmental Opportunities and Threats and firm Strengths and Weaknesses (SWOT Analysis)
Strengths
Brand reputation – BMW has built a strong brand image in the car industry. In 2018, BMW was the third top-ranked brand in the industry, with an estimated net worth of over 25 billion dollars CITATION Dou18 \l 1033 (Bolduc, 2018). In 2020, Forbes ranked it as the 27th most valuable brand CITATION For \l 1033 (Forbes, n.d.). This shows that BMW not only has a strong brand image, but it is also valuable and very recognizable.
Handling, engines, and traction motors – In 1990, BMW pioneered a new technology which they dabbed active steering and increased the car stability and handling at high speed. Secondly, the company has a long history in engine manufacturing, and it still sells them to other automakers. BMW has severally won engine of the year awards for their products in this category.
Information technology integration – BMW has continued to push the envelope about what technology can be included in a car. As a luxury product and brand, BMW has pioneered many technologies, some of which have become industry standards, such as iDrive. Most BMW cars also have laser-light technologies and other features that earned them the technology of the year award in 2014 for the BMW i8.
Environmentally friendly vehicles – 80% of BMW automobiles are made from recycled ad recyclable materials. BMW has also developed technologies designed to make its cars eco-friendlier, such as hybrid cars, hydrogen cars, etc. BMW’s eco-friendly products have the World Green Car of the Year Award at least twice in the last decade.
Weaknesses
Low total car production – According to the International Organization of Motor Vehicle manufacturers, BMW p...