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-Weak brand portfolio (only three brands): BMW manufactures and sells only 3 brands: BMW, MINI and Rolls-Royce. The lack of differentiation in brand portfolio may have negative impact on long-term growth of the company. It may put the company in jeopardy to external shocks and economic crisis in the future. [CITATION Jon13 \l 1033 ]Opportunities:-Increasing fuel prices:With the current economic instability and growing fuel prices, large markets can welcome the new range of BMW hybrids and hydrogen cars. BMWhas been working on developing the i-BMW concept which includes fully electric cars leading to emission reduction and cost efficient cars. -‘Green’ vehicles and new emission regulations:With customers becoming more conscious about the environmental protection and the negative aftermaths of petrol and diesel cars, BMW’s emphasis on ‘green’ vehicles will definitely create strong
MHRV 6451-14O-4V20-S2, AdvancedMarketing Unit IIposition in the automotive industry in the future. The firm produces most ecological vehicles which comply with the new reduced vehicle emission regulations. -Changing customer needs:Unique selling proposition and continuous brand building with the help of new innovative technologies can help BMW to cater to different target groups. BMW takes into account the changing customer needs before launching and developing new products.-Strategic alliances with other automobile companies:BMW can plan to increase its presence globally by taking in to account the possibility of strategic alliance with other companies. Strategic alliances can help large companies to explore the markets of countries that have limited themselves to particular companies. [CITATION Jon13 \l 1033 ]Threats:-Increasing prices of raw materials: Auto manufacturers are facing issues due to rise in costs or raw materials leading to lesser profits and higher input costs. -New competition: In developed countries, markets are saturated for luxury cars, intensifying competition. With increasing competition from competitors like Audi, Mercedes Benz, Toyota, etc. BMW tends to compete more on price rather than differentiation.-Euro exchange rates: Exchange rate fluctuation can be a major threat for BMW if euro appreciates against other currencies because a huge part of it profits come from other currencies. -Malfunctions:Another threat for BMW can be the product recalls which compromises its claims of high-end quality products affecting its brand image. E.g. in July 2014, the company announced recall of 1.6m 2000-06 3 series models due to passenger-side airbag issues. Similarly, in April 2014, BMW recalled 156,137 luxury cars and SUVs due possibility of faulty engine bolts. [CITATION Jon13 \l 1033 ]4.Current problems Although the focused segmentation approach had brought BMW a lot of successes in the past, this segmentation strategy can also make certain risks for the company. When the company is too focused on the certain customer targets, BMW can lose the market share in
MHRV 6451-14O-4V20-S2, AdvancedMarketing Unit IIother segments in case the preference of the market change and shift to those new segments.