BMW A Company Analysis

University essay from Göteborgs universitet/Företagsekonomiska institutionen

Author: Hiba Larsson; Christian Falkemark; [2007-02-14]

Keywords: ;

Abstract: Background: The automotive industry is distinguished by a highly competitive market. Thus,the actors on the market struggle with increasing cost of production, development and maturemarkets. With the aim to increase profit margins and reduce costs, Volkswagen, GM and Fordare some companies, which use the same components in different car models and car brands.These companies have in other words succeeded in synergising research and developmenteffects within the company despite car model and business area. By a contrast, BMW, anindividual actor, has yearly shown strong financial results and has retained its market shares.This becomes of interest to study more profoundly, in order to find the factors behind asuccessful company and a strong brand.Purpose: The purpose of this thesis is to analyse the development of BMW during the pastfive years. Not only are the financial statements taken into consideration. In addition, acomparison to competitors and the market situation is also made.Delimitation and assumptions: This thesis is delimited to an analysis of BMW between theyears 2001-2005. The thesis is based on the assumption that BMW is the most successfulautomotive manufacturer in the premium segment.Methodology: In the study of BMW both primary and secondary data are used. The primarydata consists of an interview and secondary data is collected from annual reports.Results and Conclusion: BMW is a well known and highly valued brand and has highdiversity in the product portfolio. BMW possesses high internal competence and the companydevelop a large part of the car by themselves. The emerging markets in South East Asia,Russia, Eastern Europe and South America have shown evident growth developments.Eminent production, transportation and raw material costs have both dampened margins andaffected the buying power of consumers likewise as high oil prices.Suggestions for further studies: What would be of interest are the services that theautomobile manufacturers offer beside the cars, the after sales services, like financial servicesfor example. In addition, future research could also include studies of customer loyalty inassociation to the after sales services.

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