In this PESTLE analysis of BMW, you’ll learn many critical factors that have led to the success of the BMW corporation. Each factor falls under one or more of the macro environmental influences related to the PESTLE framework. Specifically, you’ll learn…
Who BMW is most likely to compete with?
Where BMW Group has allocated funds for lobbying?
How the company reaches and reacts to audiences around the world?
And what futuristic technology is working on right at this moment?
This is only the beginning of the information you’ll find in this PESTLE analysis of BMW. Let’s get started.
Before you begin:What is PESTLE analysis?
Contents
Political factors: Adapting to carbon emission regulations
BMW Group is affected by common political influences, such as the introduction of new policies, regulations, and political corruption. But unlikes smaller corporations, BMW Group has an intense amount of funds, profits, and brand image. This means it can influence policies for the growth of the company.
BMW Group is powered by more than 15 production companies worldwide. The manufacturing is efficient, but can also be halted by policies and regulations, like the end-of-life vehicle recycling system.
Additionally, political instability affects BMW Group is in two ways: First, it can affect consumers’ ability to buy or change buying patterns directly. This is a concern in specific countries like Brazil, China, and Russia. And second, if BMW has invested in countries with political instability, those investments may be at risk.
The company also emphasized its inclusion of greener technologies by developing the first common use of hydrogen passenger car. This car was developed because Europe taxes cars that heavily produce pollution.
Economic factors: A quiet fear of tariffs and currency fluctuations
Several years ago, BMW Group topped the list for most reputable company. Now it consistently battles Toyota for the title. Who takes first place between the two depends on valuation. Back in 2012 BMW’s value hit a 10 percent increase while Toyota’s value fell by 10 percent.
Global economy fluctuations also affect BMW’s performance, valuation, and profits. Specific regions, like Europe, can have a massive impact on the company’s success. And over the last few years the GDP has fluctuated. Fluctuations make it difficult for BMW Group to speculate profits and losses in the coming year since the currency is so volatile.
Tariffs are also impactful to BMW. It’s possible to build a BMW in Mexico and sell it to Europe without a tariff. However, if you build a BMW in the United States and then sell it to Europe, the company suffers a 10 percent tariff.
Despite this quiet fear, BMW will be investing $600 million in a South Carolina plant. Tariffs increase the costs for necessary vehicle parts, such as steel and aluminum. South Carolina important more than $500 million worth of steel and aluminium in 2017 — with tariffs the cost will increase over $106 million. This will likely eat at BMW’s profits.
Social factors: Heavy R&D meets millions of social media followers
All countries have cultural differences that are unique to the country. This means BMW Group must adjust products and marketing to fit the people it sells to. This requires adaptation to each market; using a one-size fit all approach won’t yield results.
BMW has manufacturing companies all over the world including China, South Africa, and Austria. The company chooses the location of these plants based on heavy research and development. This requires not only understanding who the consumers are and why they buy, but also the political and economic landscape.
A part of knowing and using this knowledge involves the integration of social media. BMW has social media pages on all the major platforms. On Facebook it has over 13 million fans and posts daily updates and entertaining images to provoke engagement from followers.
Twitter is where the company often responds to customer inquiries, comments, and complaints. Although it doesn’t seem to have a dedicated customer service section to help people on a consistent basis, someone does respond to followers when necessary.
Instagram is an easy choice for any car manufacturer. BMW boasts nearly 20 million followers and a feed of dazzling photos of their cars in various luxury locations. It’s a simple way to showcase BMW’s lavish lifestyle to the younger audiences that frequent Instagram.
Technological factors: The newest luxury gadgets
With so much competition in the automotive industry, the only way for any car brand to stand out is through innovation and adaptation. This involves adapting the newest technology into each car — everything from the latest parts to leisure options like Bluetooth, WiFi, and more. Considering BMW is known for its luxury, the company can’t afford to skip out on these “leisure” options because consumers have come to expect them.
BMW Group also prides itself on innovation and mobility. The cars can come with automatic car parking, hybrid vehicles, and autonomous driving. This last one, autonomous driving, is a big topic in the automotive industry. Brands like Tesla are at the forefront of self-driving cars, but unlike them, BMW Group talks about bringing it to the public.
Legal factors: The need to abide by hundreds of rules at once
BMW Group abides by a host of copyright laws related to its vehicles, as well as the technology incorporated, including WiFi and Bluetooth. It’s trickier because the Group must abide by the regulations in each country the vehicles are manufactured and sold. Any changes to these laws (in any given location) can pause or fully halt BMW’s performance and creation of new technologies.
Ecological factors: Less CO2 and more hybrid model cars
Nowadays, consumers worry about the health of the planet. And two major impactful problems are CO2 emissions and fuel-usage by cars. As a means to please this audience, BMW has dove headfirst into the development and distribution of hybrid car models. These cars use less fuel than the average.
On top of this, the BMW Group is also introducing more electric model options to the public.
Also read:SWOT analysis of BMW
PESTLE Analysis of BMW: Conclusion
BMW is a popular, lavish vehicle manufacturer providing high-performance cars to audiences all over the world. BMW Group is a formidable force, able to affect bills and regulations because of the massive funds the firm brings in each year. Although the company is often competing against other vehicle manufacturers, like Toyota, its obsession with innovation allows it to stand out amongst most competitors.
Not only is the Group looking to introduce autonomous driving to the public, it also focuses on the development of green technology for eco-friendly audiences. It can showcase these offerings (and more) on their social media pages, which have millions of followers. Despite the threat of expensive tariffs, BMW Group shows no signs of slowing down in the automotive industry.
More informative PESTLE analysis examples are available throughout this article and on the website. And when you’re ready to create your own from scratch, we have you covered.
A PESTLE analysis studies the key external factors (Political, Economic, Sociological, Technological, Legal and Environmental) that influence an organisation. It can be used in a range of different scenarios, and can guide people professionals and senior managers in strategic decision-making.
There are four major factors affecting the automotive industry: technology, market, customers and the most influential factor – environment. Environment is a source of materials, infrastructure necessary for manufacturing but everything is limited.
PESTLE is an acronym that stands for six external factors affecting your business: political, economic, sociological, technological, legal and environmental. Each of these can have a profound effect on your business and varying implications, for example, in terms of: duration of impact - short term or long term.
A PESTLE analysis is a simple tool that helps businesses succeed because it allows business owners to gain an understanding of the wider market in which they are operating in. Widening your understanding to consider external factors instigates strategic thinking which, in turn, results in better strategising.
It's also true that most of an automobile's environmental impact, perhaps 80 to 90 percent, will be due to fuel consumption and emissions of air pollution and greenhouse gases that climate scientists say are driving global warming. Fortunately, the level of that impact is very much under the control of the driver.
Prospective buyers should take more than one test drive to make sure the car is a right fit. Check for driving comfort, blind spot view, and the seating configuration. Legroom, storage space, and other amenities are also important factors that can have a significant impact on your decision.
The BMW Group currently sees challenges in various areas, including political uncertainty, a cooling global economy (partly due to international trade conflicts), rising production costs to meet regulatory requirements, exchange rate effects and rising raw materials prices.
Political Factors affecting Volkswagen; Political stability in most countries- is an opportunity for Volkswagen to grow its market with no interference from state of the country. Mutual trade agreements between Volkswagen and other states enable easy trading and opening of manufacturing sites.
A PESTLE analysis is often used as a broad fact-finding activity. It helps an organization establish the external factors that could impact decisions made inside the organization. By understanding the impact these external factors can have on an organization, it becomes handy for organizations to plan better.
Doing a PESTEL analysis helps you to look at all important factors. that might affect the success or failure of your project. PESTEL is an acronym for the following factors (Political, Economic, Social and cultural, Technological, Environment and Legal)
Political factors include government policies, leadership, and change; foreign trade policies; internal political issues and trends; tax policy; regulation and de-regulation trends.
In particular, PESTEL reflects the names of the six segments of the general environment: (1) political, (2) economic, (3) social, (4) technological, (5) environmental, and (6) legal.
PEST Analysis can assist an organization in recognizing and thereby capitalizing on opportunities offered by existing conditions in the business environment. 4 It can also be used for identifying current or possible future challenges, allowing for effective planning of how to best manage these challenges.
A PESTEL analysis helps managers gain a better understanding of the opportunities and threats they face; consequently, the analysis aids in building a better vision of the future business landscape and how the firm might compete profitably.
There is no single most important factor in the PESTEL framework. Depending on the subject to be analyzed, different factors may be supportive or detrimental. There is something that is most important in strategy formulation - knowing your company, knowing your competition, and knowing your customer.
The BMW Group has set itself a firm and verifiable interim goal for 2030 throughout its entire value chain: to reduce CO2 emissions from its vehicles by at least 40 percent – starting with the raw material, through the supply chain, production and the use phase, all the way to recycling.
Building 60 million vehicles requires the employment of about 9 million people directly in making the vehicles and the parts that go into them. This is over 5 percent of the world's total manufacturing employment.
As natural resources become more and more scarce, sustainable value chains are becoming more and more important for the automotive industry. They are based on the principle of reusing and recycling resources. Creating transparency along the supply chain is critical.
Price. Arguably the most important factor to consider when purchasing a car is the cost of the vehicle. Cars can range widely in price, with some vehicles worth their sticker price while others leave something more to be desired.
The most important and first on this list is the Economic Factor. This one is the main foundation of any purchasing decision. The reason is simple people can't buy what they can't afford. The need of a product also doesn't play a role here, but the most important thing is affordability.
Digitization, increasing automation, and new business models have revolutionized other industries, and automotive will be no exception. These forces are giving rise to four disruptive technology-driven trends in the automotive sector: diverse mobility, autonomous driving, electrification, and connectivity.
The growing consumer purchasing power and increased spending on luxury cars drive the regional market growth. Furthermore, the significant demand for fuel-efficient and lightweight vehicles in the region propels the market growth.
The fact that BMW marketing strategy concentrates on high-end segments on a global scale and consistently defines premium brand identification renders success. Trendsetting and attractive product range deliberately targets affluent customers and demonstrates the success of the automaker's global marketing strategy.
BMW stands for Bavarian Motor Works (Bayerische Motoren Werke in German). The company, formally BMW AG, was founded in Munich in 1916. BMW began as a WWI airplane engine manufacturer. Its first car did not appear until 1928.
gave BMW a reliability rating of 177 out of 200, placing it 31st out of 40. Meanwhile, Repairpal gave BMW a score of 2.5 out of 5.0, ranking the company 30th out of 32 car brands. This may give the impression that reliable BMWs don't exist, but like every other German vehicle, BMWs need proper and regular maintenance.
BMW Group adopts a marketing campaign of targeting its customers. In the slogans i.e. “The Ultimate Driving Machine” and “Sheer Driving Pleasure”. BMW tells its customers and other people that BMW cars give a pleasure in driving that no other car can give.
BMW highlighted the “dramatic” changes it will need to make in the coming 10 years if it is to maintain its position in a car industry that is undergoing considerable upheaval through the arrival of electric vehicles, in-car connectivity and driverless cars.
The country which is not good in the economy the company Volkswagen deal with the lower segments car. Another problem with the sales of the car is the increase in the petrol prices which directly affects the sales of the car and this condition is directly related to the economic situation of the country.
This is primarily because of Volkswagen's business model which was to branch out and create multiple luxury vehicle brands. As a result, the primary brand Volkswagen is no longer directly associated with premium automobile classes.
The rise of autonomous, electric and connected vehicles will fundamentally change how cars are designed and constructed, even allowing them to be made out of materials such as paper and bamboo.
Political factors include government policies, leadership, and change; foreign trade policies; internal political issues and trends; tax policy; regulation and de-regulation trends.
Doing a PESTEL analysis helps you to look at all important factors. that might affect the success or failure of your project. PESTEL is an acronym for the following factors (Political, Economic, Social and cultural, Technological, Environment and Legal)
In particular, PESTEL reflects the names of the six segments of the general environment: (1) political, (2) economic, (3) social, (4) technological, (5) environmental, and (6) legal.
PESTLE helps you to analyse external factors which can affect your business. The six factors are: political, economic, social, technological, legal or environmental. With a clear overview of these factors you can better understand the position and potential of your business in the market.
3. Social factors in PESTLE Analysis. Social factors include cultural norms and expectations, health consciousness, population growth rates, age distribution, career attitudes, health, and safety. These factors are helpful for companies to better plan their marketing analytics and strategy.
PEST Analysis can assist an organization in recognizing and thereby capitalizing on opportunities offered by existing conditions in the business environment. 4 It can also be used for identifying current or possible future challenges, allowing for effective planning of how to best manage these challenges.
A PESTEL analysis is a framework or tool used to analyse and monitor the external environment factors which have an impact on an organisation. The result of which is used to identify threats and weaknesses, strengths and opportunities which can be considered or used in a SWOT analysis.
PEST is an acronym for four sources of change: political, economic, social, and technological. PEST analysis is a powerful and widely used tool for understanding strategic risk. It identifies the changes and the effects of the external macro environment on a firm's competitive position.
There is no single most important factor in the PESTEL framework. Depending on the subject to be analyzed, different factors may be supportive or detrimental. There is something that is most important in strategy formulation - knowing your company, knowing your competition, and knowing your customer.
It can provide an advance warning of potential threats and opportunities. It encourages businesses to consider the external environment in which they operate. The analysis can help organisations understand external trends.
SWOT analysis is a framework for identifying and analyzing an organization's strengths, weaknesses, opportunities and threats. These words make up the SWOT acronym. The primary goal of SWOT analysis is to increase awareness of the factors that go into making a business decision or establishing a business strategy.
Gain a clear understanding of where your organization stands within the larger community. Be better prepared for unanticipated changes to minimize the impacts of unpleasant surprises. Identify organizational shortcomings and opportunities for new investments.
PESTEL analysis helps to identify key factors to acknowledge, understand, and potentially use to your advantage. I have discussed some characteristics of these environmental factors below. The article will help you find which factors are more important to your company's strategy.
Governments can raise or lower corporation tax , which will impact on profits. They can also affect businesses by increasing value-added tax on products or business rates. They can bring in new laws like the National Minimum Wage , which impacts on profits and employment rights.
Introduction: My name is Barbera Armstrong, I am a lovely, delightful, cooperative, funny, enchanting, vivacious, tender person who loves writing and wants to share my knowledge and understanding with you.
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