Essay on Strategic Appraisal of Bmw

3159 Words13 Pages
Napier University Edinburgh | Strategic Appraisal Assessment | 08002676 |

Word Count:
20/4/2010
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Strategic Appraisal
BMW Case Study

Introduction

Bayerische Motoren Werke AG now known as BMW was founded in Germany in 1916. The BMW group began as a manufacturer of engines. In the present day now also manufactures automobiles, motorcycles, software and offers financial services. The case study ‘Exploring Corporate Strategy’ prominently deals with the automobile side of The BMW Group. Within this market BMW trade under three different brands BWM, MINI and Rolls Royce. BMW experienced a failure to gain and grow market share in the early twenty first century the group then embraced an imperative strategy of organic
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The organisation claimed that this drop was due to changes in the legislation for tax provision. These changes meant that the organisation had to abide by the new taxation amounts and at this time the taxation rates had increased implicating higher out goings for The BMW Group. This change in legislation has consequently had a huge impact on the organisation causing its profits to decline. As changes like this often happen within legislation BMW have to ensure that they are aware of these so they do not face any further issues.

Political issues also have to be taken into account on a regular basis within The BMW Group due to the company trading globally. Trade barriers and restriction can cause problems for this organisation so thought has to be given to where and how they can trade. BMW then have to consider the tax policies which are in place as it will affect their pricing strategy. If taxes are high then the prices of their automobiles will rise in accordance if they aim to meet the same profit margins.

Porter’s Five Force Model in relation to The BMW Group

Michael Porter established this model as a way of ‘assessing the attractiveness (profit potential) of different industries.’ (Johnson, 2008) Relating this to the BMW Group it will outline issues that will aid in securing competitive advantage and gain an understanding of the
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