BMW-MINI cooper
Individual Case Study Analysis; BMW-MINI Cooper
BMW bought MINI cooper in the year 2000, which was initially owned by the Rover Group. The Rover Group became part of BMW in 1994 when BMW purchased it, then later in 2000, and the two companies split while the BMW retained the MINI badge. BMW helped MINI cooper to grow and expanded its market into the United States in 2002 through acquisition. The MINI cooper always organizes annual road trip rallies for the MINI cooper owners. For instance, last year, they attracted over 1000 MINI coopers owners who drove up to 5,030 miles combined to Colorado. This event always gets them the chance to donate cash for charity and link up with each other.
Today MINI cooper has grown large and become more expensive. However, MINI cooper sales have declined in the previous years; like for instance, in 2018, the brand was able to sell 361,531 globally, which was a drop of 2.8% compared to the prior year. In the United States, there is a more significant drop in sales of about 7.3% year-over-year drop despite the MINI cooper being a niche product. In 2019 December alone, they were able to report a 40% year-over-year drop in the United States (Abhijeet Pratap, 2019). The drivers of the company’s car tend to be the best selling point for their vehicles. The even company rolls on its website, “The Best Owners,” as a top strategy to attract clients. The MINI Cooper has over 73 owners’ clubs in the United States alone and additional international clubs across Ukraine and Sri Lanka.
Some MINI cooper drivers who currently own the cars feel like the latest modifications of the vehicles is nothing good compared to the earlier models. The MINI sales in June 2019 dropped down by 22% compared to the previous year the same month. Analysts believe that the leading cause of the drop in the price, styling and divergence from the original brand. But the Mini executives stand on the ground that the design of the car should evolve so that it can be able to meet the evolving efficiency and safety standards (Abhijeet Pratap, 2019). The company had recently reported that there would be the production of an all-electric Mini Cooper E concept in the year 2020. The car is believed to share the same platform with BMW i3, but they will maintain their British charm.
The problem faced by BMW includes; differentiation, competition, and global warming. In differentiation, the producer will have to produce different types of cars for different geographical locations depending on their varied tastes. However, this will incur a lot of costs, and that would cause financial constraints to the company. Competition from other companies is another problem. With the market being run by six companies at 69%, the company faces challenges from its competitors who may lower their prices to attract customers. Global warming is another challenge that faces the BMW Company. With global warming, most production companies choose to go green and produce effectively without affecting the environment.
Moreover, this means that there will be more costs to be incurred by the company in the process of producing greener engines. BMW deals with its problems in dynamic ways. In differentiation, BMW uses more advanced technology to make their cars better by mainly focusing on security and energy features, which makes it unique, for example, the athletic sedan where advanced consumer electronics were used that made the car sporty and luxurious at the same time (Abhijeet Pratap2019).
Nevertheless, in competition, the BMW has new models in the market, the X6, X7 and X5, which is pimped with advanced electronics to ensure it’s both sporty and luxurious. At the same time, they have bought the Rolls Royce Company, which has made it to be more reliable among the competitors. In environmental challenges, BMW has tried to produce cars that are environmentally friendly and do not pollute the environment. An exemplary production is the BMW 7 series and the Z4, which are conducive to the environment (Shama,2019).
The strengths of BMW include; brand recognition, research development, broad product range and skilled human resources. Brand recognition in BMW comes as a result of innovation, driver safety, marketing and quality production. The brand is easily recognized across the world by many people due to its stylish logo. The company, at the same time, put much investment in promotions and marketing so as to grow the brand higher and more excellent. In research and development, the company has used more advanced technology to produce better cars that are friendlier to the environment and also considers the driver’s safety.
Fundamentally, in a broad product range, the company enjoys a wide range of products, which includes cars and motorcycles. The company also owns Rolls Royce and Mini besides BMW. In skilled human resources, BMW has got a range of specialized employees. The company invests so much in human resources to ensure that its workers are motivated at the same time hires qualified personnel to enable faster growth of the company. BMW’s weaknesses include; premium prices, high production and operating cost and vehicle recall. The premium prices come as a result of their premium brand image, which slows down growth and expansion as well as drives away potential clients. BMW focuses on manufacturing more premium cars, which incurs a lot of cost during production, thus raising the production costs, which reduces the profit to be earned. BMW uses vehicle recalls protecting its image by ensuring cars are safe. The vehicle recall may sound so responsible for a company, but it can affect the brand’s image and change the customers’ brand’s perception.
Opportunities in BMW include autonomous driving technology, digital marketing and customer engagement and electric cars. With the technology advancing frequently, there is a growth in customer’s interest in autonomous driving, which sounds like a good opportunity for BMW to venture into (Abhijeet Pratap). With the evolving digital market, BMW can use their own websites to run their advertisements and also engage customers. Clients are also seen to develop an interest in emissions-free vehicles; this is a good opportunity for BMW to invest in electric cars.
However, BMW also faces threats from competition, regulatory pressures and cost of raw materials. Several brands in the car industry use technology in advancing their cars, which is a competitive threat to BMW (Shama, 2019). There is also a growing regulation in the automotive industry, which comes with high compliance costs; thus, they have to be careful to avoid unnecessary costs incurred. The raw materials prices keep on increasing over the year, which makes the company incur a lot of the expenses during production.
In a nutshell, I would recommend that when launching the MINI cooper, the best segment will be the upper class that will be able to purchase the car because these people are willing and able to spend a lot of cash on products that fit their status and attitude. MINI cooper should also focus on the manufacturing of electric cars using advanced technologies.
In conclusion, BMW is a premium car dealer that overrides on a wide range of products from BMW to Rolls Royce cars as well as motorcycles.
In conclusion, the main aim of BMW is to make a huge profit, which makes it investing in electric vehicles, thus growing their market. The recent growth of the automotive industry has made it to be so competitive that the leading brands like BMW enters into partnerships with other brands of the vehicle both globally and locally so that it can grow. The BMW should focus on making electric vehicles that sound to be the next move to fit in the competitive market.
References
Abhijeet Pratap. (2019). “BMW SWOT ANALYSIS of 2019.” notesmatic.com/2019/08/bmw-swot-analysis-2019.
Shama, Elijah. (2019). “The Mini Cooper Goes Electric As It Turns 60 and Tries to Stem Falling Sales.” CNBC, 30 Sept. 2019, www.cnbc.com/2019/08/03/the-mini-cooper-goes-electric-as-it-turns-60-and-tries-to-stem-falling-sales.html.