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Bmw Five Forces

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BMW: case study analysis

Q1: Business environment and main trends in 2004
The global car market started decline in 2003, led by market falls in North America and Western Europe. Other regions of the world led by East Asia are seeing further car market expansion in 2003. In 2004, projections for livelier economic growth underpin the resumption of car market growth in Western Europe and North America. (Langley 2004, p691-711)
Although the more stringent laws can eat away at companies' earnings, they also provide the stimulus to develop new technologies and markets. Another major external factor affecting the current situation of BMW is that industry structure is becoming more and more concentrated. In this era of auto-industry consolidation, BMW is seen as a medium-sized business which could face problems in the future if it doesn't take into consideration strategic alliances. One of the external economic factors is that in the last years a large degree of overcapacity has been experienced in the car industry running at 20% to 30% in Europe. This overcapacity has been caused by a drop in demand and sales, probably because of a global economic instability which has led consumers to reduce spending on non essential goods. (Johnson 2008) The decline is brought about by lower car demand in North America and Western Europe, both relatively mature car markets that have been adversely impacted this year by high energy prices and fragile consumer sentiment. (Lynch 2005)
The automobile industry is becoming more and more competitive, with 6 major groups which have been formed in the last 3 years. Strategy is a perceived pattern in actions past or yet to come. It is a label applied to patterns in action; strategy evaluation requires a consideration of both current and likely future results against the resources committed to the strategy. This is only an overview of the major concerns and findings from Johnson G. Scholes K. and Whittington R. (2005)....