Global Business Strategy Btechnd Assignment

Introduction

The Automobile industry has shaped people life and it is considered as status symbol in this modern scenario. The changes that happened over the years in automobiles industry has success story on its own through the evolution in technological advancements interior and exterior design. Automobiles have gained special place in the market. The following assignment deals with various aspects regarding the marketing strategies of one of the most famous categories in the segment of luxurious motor vehicles in which is popularly known as BMW.

BMW stands for Bavarian Motor Works which is actually the English translation of the German term ‘Bayerische Motoren Werke AG’ and is basically a German manufacturing company which is well known for its luxury vehicles, motorcycles as well as engines. The company was founded in the year 1916 and it’s headquarter is located in Munich, Bavaris which is in Germany. In addition the company also owns as well as produces mini cars and is also known for serving as the parent company for the famous Rolls-Royce Motor Cars. It is also considered to be one of the best selling auto manufacturers in the world. The company produces motor cycles under the brand name of BMW Motorrad while it produces and sells it plug-in electric cars under the sub brand which is known as BMW i.

(livemint.com 2013)

Review of International business environment analysis techniques

 The global environmental analysis and diagnosis consists of managerial decisions made by the analyzing the implication of opportunities and threats of the environmental analysis. The Business Environment is combination of Internal and external factors (Micro & Macro), Micro factors which influence business and presented within the business. These factors is under controlled of the business and could include policies of business, organization structure, participation in management, organizational culture, mission and value statement.

Whereas Macro or external factors which influence business and business has no control over them the external factors are those macro environmental factors that include Political, Economical, Social, Technological, Legal and the Environmental factors to control the business.

The internal and external factor like customers, suppliers, environment, government and the economical strength affects the business in the global marketplace. As per the opinion of Ashridge (2005).

There are a number of different tools we can use to analyze both the Micro &Marco factors within a business and below is the categories of those techniques:

Macro EnvironmentMicro Environment
·        PESTEL Analysis·        Porters 5 forces analysis
·        Country Risk Analysis·        Mendelow’s stakeholder analysis
·        Porters Diamond Analysis·        Porters 4 corners analysis

 Analysis of Micro and Macro Business Environment techniques

Macro Analysis

  • PESTLE

PESTLE analysis is the tool for the marketer that analyzes the external factors of the external environment to control the business. The factors of PESTLE are Political, Economical, Social, Technological, Legal and the Environmental, the result of this analysis will be the feeder in SWOT analysis which will determine the threats and opportunities. The advantages of SWOT analysis includes the fact that it helps to identify the strengths, weaknesses, opportunities and threats of the organization and as such it helps the organization to amplify its strengths and opportunities as well as to overcome its weaknesses and threats. The disadvantage includes the fact that it is time consuming and labor intensive as well.

The political factors include the legal considerations, regulations, and the formal and informal rules introduced by the government while international business operation takes place. While economic factors assessing the changes to an economy inflations rate, taxes and trading regulations.Social represent the culture of the society that an organization operates within. They may include demographics, age distribution, population growth rates, level of education, and living conditions.The well-developed technological environment offers a greater private sector involvement, so that the both the public and private sector partnership could lead a successful business operation. Legal factors consider the country laws that may affect the industry in areas of employment, health and safety and competitors. The last factor which is environmental factor includes the infrastructure of the country, weather condition and energy cost and availability to run the organization. The advantage of PESTLE analysis helps to provide an idea regarding the external environment of the company which is helpful for the company to frame or develop its future strategies and to take steps accordingly. The disadvantage includes the fact that it is time consuming and labor intensive as well.

Country Risk Analysis

Refers to the risk in investing or lending with respect to the country environment whether Political or financial risk factors. The excess capacity of the cars produced by the different countries also hampered the sales of the automobile industry. For Example in the year 2003, the automotive industry of the country UK had an excess of about 80% of cars which ultimately resulted in freezing about 1.3 billion Euro of the automobile industry of the UK. Moreover the global recession as well as the changes that take place in the exchange rates of the countries in which BMW operates. However the European markets as well as the US market are comparatively more important to the company as compared to the others. Its advantage is that it helps to identify the financial as well as the economic risks associated with the company or its products. Disadvantage includes the fact that it does not provide any solutions or methods to ensure protection from the associated risks.

  • Porter’s diamond

Porter’s diamond model for the competitive advantage of Nations proposes a model to comprehend the competitive position of a nation in the international competitive marketplace. The following diagram shows important components of the Porter’s Diamond –

(mapi.net 2015)

It is basically an economical model which helps to analyze the competitive abilities of the companies with respect to certain competitive locations. It is mostly applicable to the small industries as in such industries the competitiveness of one company effects that of the other.  Its advantage includes the fact the appropriate analysis of the same helps to provide competitive advantage to the firm. Disadvantage is that it is time consuming and is associated with certain risks.Order Now

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