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Introduction to Consulting - Course Work WT10
Market AnalysisBMW
Julia Schmidt, Lorenz Illing, Michael Fröse
1) Introduction
2) Market
3) Competitve landscape
4) Company´s positioning
5) Conclusion
23.11.2010 © Julia Schmidt, Lorenz Illing, Michael Fröse
AGENDA
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23.11.2010 © Julia Schmidt, Lorenz Illing, Michael Fröse
1) INTRODUCTION
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23.11.2010 © Julia Schmidt, Lorenz Illing, Michael Fröse
• founded in Munich,1917
• Acquisition of Rover Group in 1994
• Acquisition of Rolls-Royce in 2003
• 2009
• 1,3 mio cars sold
• 96,230 employees
• Revenue 50 € b
• most sold car : 3´ series
1) INTRODUCTIONBMW Group
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23.11.2010 © Julia Schmidt, Lorenz Illing, Michael Fröse
23 production and assembly plantsin 13 countries
1) INTRODUCTIONProduction
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12 R&D plants in 5 countries
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1) INTRODUCTIONResearch & Develpoment
1,341,048 cars worldwide
23.11.2010 © Julia Schmidt, Lorenz Illing, Michael Fröse
21% Germany
21%USA 14% India
GB 11%
24% Restof Europe
7% China
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1) INTRODUCTIONSold Cars in regions
23.11.2010 © Julia Schmidt, Lorenz Illing, Michael Fröse78%
16%
6%0%
BMWMiniMotorcyclesRolls Royce
1,043,829213,67082,631
918Total 1,341,048
2009
8
1) INTRODUCTIONSold Cars in brands
23.11.2010 © Julia Schmidt, Lorenz Illing, Michael Fröse
2) MARKET ANALYSIS
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23.11.2010 © Julia Schmidt, Lorenz Illing, Michael Fröse
product-oriented:
all companies that offer a combination of luxury and powerful cars with a high level of quality and service
customer oriented:
car manufactureres such as Lexus (Toyota), Audi (VW), Porsche (VW), Merzedes-Benz (Daimler).
2) MARKET ANALYSISMarket definition
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23.11.2010 © Julia Schmidt, Lorenz Illing, Michael Fröse
• The respective market for BMW consists out of the premium segments of the global passenger car and motorcycle market.
• BMW is one of the leading luxury car manufacturers in the world.
2) MARKET ANALYSISMarket definition
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RivalryAmongExisting
Competitors
Threat of New Entrants
BargainingPower of Suppliers
BargainingPower of Buyers
Threat of Substitute P & S
2) MARKET ANALYSISPorters 5 Forces
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Rivalry among existing competitors:
+ some competitors of the same size
+ Low industry and market growth rates
+ Barriers to exit are high (production facilities)
→ High
23.11.2010 © Julia Schmidt, Lorenz Illing, Michael Fröse
2) MARKET ANALYSISPorters 5 Forces
13
Threat of New Entrants:
+ high initial investments and fixed costs
+ limited access to specialized suppliers
+ existing players have close customer relations (e.g. long-term service contracts)
+ customer loyalty
→ Low
23.11.2010 © Julia Schmidt, Lorenz Illing, Michael Fröse
2) MARKET ANALYSISPorters 5 Forces
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Bargaining Power of Buyers + Buy large volumes (e.g. company car for many large
companies)+ Switching to an alternative product is relatively simple and not
related to high costs+ Products are undifferentiated and can be replaced with
subsitutes− Product itself of strategic importance to customer− Customer knows about the production
cost of the product→ Medium
23.11.2010 © Julia Schmidt, Lorenz Illing, Michael Fröse
2) MARKET ANALYSISPorters 5 Forces
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Bargaining Power of Suppliers:
+ Supplier’s products are customized and valuably differentiated
+ high switching costs to alternative suppliers
+ JIT production
− Market is dominated by many suppliers (sub suppliers)
→ High
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2) MARKET ANALYSISPorters 5 Forces
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23.11.2010 © Julia Schmidt, Lorenz Illing, Michael Fröse
2) MARKET ANALYSISPorters 5 Forces
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Threat of Substitute Products & Services:
+ close customer relationship
+ brand loyalty of customers is high
− No penalties or low switching costs for customers
− Current trends
→ medium
• retailers network
• military services
• company carpool
• franchise system
23.11.2010 © Julia Schmidt, Lorenz Illing, Michael Fröse
2) MARKET ANALYSISDistribustion Channels
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2) MARKET ANALYSISMarket Trends
-4
0
4
8
11
15
2009 2010 2011 2012 2013 20140
25
50
75
100
% growth million vehicles
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• branding
• brand loyality
• brand awareness
• global positioning
• positioning in established markets
• positioning in growing markets
• innovation rate
• differentiation
• hybrid
2) MARKET ANALYSISKey Success Factors
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3) COMPETITIVE LANDSCAPE
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World Ranking of manufactureres in cars sold 2009 in thousands
23.11.2010 © Julia Schmidt, Lorenz Illing, Michael Fröse
1. Toyota2) G.M.3) VW
4) Ford5) Hyundai
6) PSA7) Honda8) Nissan
9) Fiat10) Suzuki
...12) Daimler
...14) BMW
...41) Porsche
0 2.000 4.000 6.000 8.000
Cars Commercial Vehicles
3) COMPETITIVE LANDSCAPEMarket Structure
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• no clear market leader
• more than 50 competitors worldwide
• many local car manufacturers
3) COMPETITIVE LANDSCAPEMarket Structure
Toyota12%
G.M.10%
VW10%
Ford8%
Hyundai8%
PSA5%
Honda5%
Nissan4%
Fiat4%
Suzuki4%
2%2%
Rest27%
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3) COMPETITIVE LANDSCAPEDirect Competitors
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3) COMPETITIVE LANDSCAPEIndirect Competitors
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• founded in Stuttgart in 1931
• ca. 100,000 cars sold in 2009
• 11,910 employees worldwide
• Revenue 7,3 b € in 2006
• Merged with VW in May 2009
• most sold car : Porsche Cayenne Diesel in 2009
23.11.2010 © Julia Schmidt, Lorenz Illing, Michael Fröse
3) COMPETITIVE LANDSCAPEPorsche
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• founded in 1989
• ca. 216,00 cars sold in 2009
• Revenue 12,6 b € in 2007
• division of its parent company Toyota Motor Corp.
• most sold car : Lexus RX
23.11.2010 © Julia Schmidt, Lorenz Illing, Michael Fröse
3) COMPETITIVE LANDSCAPELexus
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• founded in Stuttgart in 1926
• ca. 1,300,000 cars sold in 2007
• 256,000 employees worldwide
• Revenue 52,4 b € in 2007
• division of its parent company Daimler AG
• most sold car : CLK/SLK
23.11.2010 © Julia Schmidt, Lorenz Illing, Michael Fröse
3) COMPETITIVE LANDSCAPEMercedes
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• founded in Zwickau in 1909
• ca. 920,000 cars sold in 2010
• 60,000 employees worldwide
• Revenue 29,84 b € in 2006
• wholly owned subsidiary by VW since 1966
• most sold car : Audi A4
23.11.2010 © Julia Schmidt, Lorenz Illing, Michael Fröse
3) COMPETITIVE LANDSCAPEAudi
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3) COMPETITIVE LANDSCAPECars sold (2009)
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0 325.000 650.000 975.000 1.300.000
85.900
310.000
975.000
1.183.000
1.280.000
Porsche
Lexus
Mercedes
Audi
BMW
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3) COMPETITIVE LANDSCAPENet sales in mio € (2009)
23.11.2010 © Julia Schmidt, Lorenz Illing, Michael Fröse
0 12.500 25.000 37.500 50.000
7.466
12.680
41.318
29.840
50.000
Porsche
Lexus
Mercedes
Audi
BMW
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3) COMPETITIVE LANDSCAPEEmployees (2009)
23.11.2010 © Julia Schmidt, Lorenz Illing, Michael Fröse
0 25.000 50.000 75.000 100.000
12.202
11.520
97.000
58.011
100.041
Porsche
Lexus
Mercedes
Audi
BMW
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4) COMPANY`S POSITIONING
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4) COMPANY`S POSITIONINGStrategy
• The BMW Group is the leading provider of premium products and premium services for individual mobility.
• New strategy Number ONE• standing for 'New Opportunities' and 'New Efficiency'
• BMW Group's activities comprise • the development, production and marketing of
motorcycles• as well as comprehensive financial services for private and
business customers: 34
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STRENGTH:• Strong brand image• Strong R&D capabilities (DM)• Strong product innovation• High employee productivity• Motocycle as niche product• US military service• High quality suppliers• Steady decrease in Co2
emissions• Strongest product: 3 Series
4) COMPANY`S POSITIONINGSWOT Analysis
WEAKNESSES:
• Poor performance of BMW in asian markets
• Declining production and deliveries
• Lack of scale compared to competitors
• High wages
• Too less strategic alliences35
23.11.2010 © Julia Schmidt, Lorenz Illing, Michael Fröse
OPPORTUNITIES:
• Car industry on road to recovery
• Poised to benefit from increasing demand for hybrid electric vehicles
• Growth in Asia
• Growing used car market in UK
• Moderate growth in global cars market
• Rising green awareness
4) COMPANY`S POSITIONINGSWOT Analysis
THREATS:
• Competition in the global automotive market
• Currency risk
• Environmental protection regulations
• Recession in US and Europe
• Rising green awareness
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5) CONCLUSION
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23.11.2010 © Julia Schmidt, Lorenz Illing, Michael Fröse
4) COMPANY`S POSITIONINGTOWS Matrix
O T
S
•focus on BRIC countries by using brand image
•considering green awareness to invest in hybrid technologies
•investments in new products for leasing- increase leasing contracts
•enter UK used car market with leased cars (3` series)
•high global presence → reduce currency risk
•new innovations to match EU vehicle regulations
•strong brand image helps BMW to overcome recession
W
•use BRIC countries to outweigh low performance in these countries
•car industry is growing again → increase production
•build new production facilities in Asia to lower wages
•Lower wages → stay competitve
•lack of scale to competitors reduce EU dependence on EU vehicle regulations
•M&A to overcome lack of scale compared to many strategic alliences of competitors
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New product development in China• 1 series or 3 series on cost leadership basis
‣ diversification strategy according to Ansoff Matrix
5) CONCLUSIONPossible Recommendation
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5) CONCLUSIONReferences
• (2007). Annual Report Porsche Automobil Holding 2007
• (2009). Annual Report Bayreische Motoren Werke AG (BMW Group).
• (2009). Annual Report Toyota Motor Corporation (Toyota)
• (2010). Company Spotlight: Bayerische Motoren Werke AG. MarketWatch: Automotive, 9(4), 17-23. Retrieved from Business Source Premier database.
• (2010). DATAMONITOR: Bayerische Motoren Werke AG (BMW Group). Bayerische Motoren Werke AG SWOT Analysis, 1-9. Retrieved from Business Source Premier database.
• Amrioul, N. (2009). Das Image von Automarken: Eine empirische Studie von Audi, BMW und Mercedes Benz. VDM, Verlag Dr. Müller.
Thank you for your attent ion.
QUESTIONS?
© Julia Schmidt, Lorenz Illing, Michael Fröse