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Free Example of SWOT Analysis Essay

SWOT analysis is an analytical tool used for evaluating and auditing a given business and the environment in which it operates. SWOT usually forms that first stage of the planning process within an organization. It helps the management of an organization in understanding the business environment. In the marketing department, markets often find SWOT analysis useful when developing various marketing strategies for their products. SWOT is the acronym for strengths, weaknesses, opportunities and threats. SWOT analysis is usually divided into two broad categories. The first category comprises of strengths and weaknesses of the organization, whereas the second category comprises of opportunities and threats. According to Domansky (2011), strengths and weaknesses form factors that operate within the organization, that is, the internal environment, whereas opportunities and threats are external factors that are generated by the external environment of the organization. SWOT analysis is a situational evaluation of both internal and external environments of the organization.

Strengths

Strengths of an organization refer to factors within the organization or its features that enable it to have added competitive advantage over and above its competitors. During SWOT analysis, the organization must look at the factors that give it more advantage over its competitors. The strengths of an organization in marketing include factors such as the number of professional salespersons that the organization has employed to carry out its marketing activities, ability of the organization to come up with new and innovative products that can easily meet and exceed customers’ expectations, provision of high quality products with high performance capability, as well as strategic location of the company’s premises and supply chains or distribution channels.

In my opinion, I would argue that BMW has effectively utilized this aspect of marketing through production of high quality automobiles with indubitably high levels of performance. The BMW M3 Coupé car is a good example of such products that the company has built its strengths on. For example, most sportsmen prefer to use the BMW M3 Coupé car due to its effective braking systems that rarely fail even at extreme speeds. Similarly, the company has employed a large number of salesmen in its showrooms across the globe to market the BMW M3 Coupé car. The company has also ensured extensive distribution of the product in areas where its demand is speculated to be high in order to convenience customers whenever they need to buy the car. The BMW M3 Coupé also has special in-built features such as airbags that ensure safety of the passengers. Extensive distribution of the BMW M3 Coupé car has facilitated easy access whenever consumers want to make a purchase.

A strong brand name that the company has been able to create in the automobiles market is another strength of the BMW M3 Coupé. Through persistent production of high quality cars, BMW has been able to develop good reputation amongst its customers. Most customers trust and believe in the company’s products. When BMW M3 Coupé was introduced into the market, it received quick acceptance because of the trust that the company was able to build amongst its customers long before its manufacture.

Weaknesses

The weaknesses of an organization with respect to marketing refer to various limitations that are disadvantageous in nature to the organizations. Weaknesses often place the competitors of the organization in a much better position as compared to the organization. Domansky (2011) defines weaknesses as the state of absence of organizational strengths. Some of the factors that may contribute to weaknesses of an organization in marketing include a weak brand name, inappropriate marketing strategies, and inaccessibility to major chain stores or distribution channels as well as low reputation amongst consumers. Weaknesses also refer to faults or mistakes that an organization makes and that have the potential to prevent it from achieving its goals and objectives.

In relation to the BMW M3 Coupé, its major weakness has been inaccessibility of its distribution outlets. According to Bellon (2009), BMW has only been concentrating on its markets in the United States of America, Europe and Asia. Other potential markets, especially in Africa, have been sidelined. In my view, this discriminative distribution of the car limits its accessibility to potential buyers in other markets, hence reducing sales volume. Additionally, the BMW M3 Coupé costs the company a lot of funds to manufacture. This consequently results to high prices of the product in the market. High prices often drive away customers; hence BMW M3 Coupé is not an effective cost leader in the motorsports car market as compared to low priced Mercedes Benz C63 AMG (Bellon, 2009). Another weakness of the BMW M3 Coupé is its overreliance on previous technologies. As stated earlier, the production of BMW M3 Coupé was based on previous models such as the BMW E36 Z3 and BMW E86 Z4 models. In my view, certain customers may not like the remodeled BMW M3 Coupé, because they will consider it as an old technology, despite its technical improvements and enhancements.

Moreover, BMW has selectively distributed the BMW M3 Coupé in markets that it considers profitable. In my opinion, although this may seem to be a good marketing strategy, it doesn’t give a chance to use the products to other potential consumers who are not within the targeted markets. For example, customers in Eritrea where the product is not supplied may opt for the readily available Mercedes Benz C63 other than making an order to the company’s sales department in Munich for personalized delivery.

Lastly, the BMW M3 Coupé has suffered from damaged reputation due to its technical failures that were experienced by some of its users immediately after its introduction into the market. Thus, most consumers believe that other brands such as the Mercedes Benz C63 have the capability to perform better than the BMW M3 Coupé.

Opportunities

Domansky (2011) defines opportunities as any favorable condition within the external environment of an organization that provides prospective chances or situations for the organization to enhance its competitive advantage within the market. Opportunistic factors include supportive legislation and policies that are formulated and implemented by the government and its regulatory agencies, availability of factors of production such as raw material and cheap labor, increase in demand for a product in the market, new technological advancements as well as increased growth and development of the economy. Opportunities are available to all companies within the industry in an equitable manner. Thus, it is important for an organization to take advantage of every opportunity that may arise within the business environment and effectively use its resources in order to realise profits and become more competitive.

In marketing environment, opportunities include factors such as availability of a market niche whose needs are not adequately met, reduced regulation of advertisement of products, positive changes in consumer tastes, preferences and lifestyles, removal of trade barriers between two or more countries, reduction in corporate tax rates and innovation of new production technologies and methods such as lean engineering.

With reference to BMW M3 Coupé, I would argue that BMW has effectively made use of various changes in the market place. For example, through continuous research and development (R & D), the company has been able to determine various changes in consumers’ tastes and references. Information obtained from market researches by the marketers have been effectively used by the company’s engineers in designing and developing automobiles that go hand in hand with the wants and preferences of customers. This has guaranteed ability of the company to meet and exceed expectations of the consumers because development of the car was customer focused.

Additionally, through research and development, the company has been able to improve various defects that were earlier experienced by users of the BMW M3 Coupé model when it was introduced into the market. This has ensured that the customers’ trusts and hopes have been rebuilt. Moreover, the company has taken advantage of fewer trade barriers that exist between Germany and United States of America to make sure that it fully exploits the American market. However, it should also consider other potential markets, such as Africa and India, where it has fewer distribution channels although the markets do not have numerous barriers to entry into the automobile industry. Thus, I would argue BMW has not been able to effectively exploit the global market available for its BMW M3 Coupé.

Threats

Threats refer to various factors in the external environment of the business that may cause problems to the organization. Threats often pose difficulties that may limit the capability of the organization to carry out its operations effectively. According to Osswald (2007), threats are those factors that are unfavorable to the business. Threats often restrain the ability of the company to be competitive. Most threats are harmful to organizational goals and objectives. Example of threats include political instabilities within a country, global economic crisis, declining demand of goods and services within the industry, poor supply of factors of production, such as land and raw materials, as well as increased ease of entry of competitors into the market.

In the marketing environment, threats may include factors such as low prices charged by competitors, price wars between firms, unrest of workers within the industry, changes in advertising laws, fixation of ceiling prices by the government, consumer tastes shifting away from the company’s products and introduction of close substitutes of organization’s products.

In relation to BMW M3 Coupé car, its major threat was the introduction of similar cars by the Mercedes Benz and Audi companies. The Mercedes Benz C63 AMG had almost similar features as BMW M3 Coupé. This implied that certain consumers could easily shift to Mercedes Benz. Secondly, since the automobiles industry does not have any well laid-down restriction that could prevent new market entrants, BMW has to strive at meeting and exceeding the customers’ expectations as well as developing a pool of loyal customers. The company has to formulate and implement appropriate marketing strategies that would enable it to effectively place BMW M3 Coupé in a better position in the competitive automobile industry.

Given below is a table of the various elements that BMW has to consider during its SWOT analysis with respect to marketing of BMW M3 Coupé.

BMW M3 Coupé: Marketing Environment

Internal Environment

External Environment

Strengths

Weaknesses

Opportunities

Threats

  1. Production of high quality cars
  2. Well established manufacturing plants
  3. Easy access to financial resources
  4. Continuous research and development (R & D)
  5. Efficient utilisation of the company’s resources such as labor, funds and raw materials
  6. Good reputation of the company and product image in the market
  7. High engineering expertise
  8. Poor management of the organization
  9. Unrealisable suppliers
  10. Underutilization of production capacity
  11. Reduced pace to adopt new technologies
  12. Favorable policies formulated and adopted by the government
  13. Increased demand of products by the customers
  14. Availability of factors of production such as labor and land
  15. Existence of a market niche
  16. Increased competition within the automobile industry
  17. Ever dynamic technology
  18. Political instabilities in host countries
  19. Global economic crisis
  20. Ease of entry of new companies into the industry
  21. Increased bargaining power of workers through formation of trade unions
     

Market Segmentation and Target Marketing and their relation to BMW M3 Coupé. Market segmentation refers to the process of dividing or grouping the market into various segments depending on the features and characteristics exhibited by the consumers. According to Barnes, Blake and Pinder (2009), market segmentation involves classification of both current and potential customers in relation to their characteristics and demands with the aim of satisfying their needs better. In market segmentation, various characteristics of the customers such as location, level of education, occupation, socio-economic class and age are used to divide customers into specific groups which can be used when  applying different marketing strategies. In market segmentation, customers are treated as homogenous groups with similar characteristics.

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On the other hand, target marketing refers to identification of specific groups of customers which the organization aims to serve independently. A target market is a group of customers that the organization recognizes as unique: hence it aims to satisfy its needs separately. Marketers often do not generalise characteristics of customers in target marketing.

In my opinion, BMW has effectively used market segmentation and target marketing strategies to sell its products. For example, through analysis of the global market, the company has found out that most of its customers are based in United States of America and Asia, that’s why it concentrated on these two major markets. Through target marketing, it developed the BMW M3 Coupé in order to meet the various taste, preferences and demands of sportspersons in the motorsports industry. Additionally, through target marketing, the company has been able to design various automobiles for different customers from different socio-economic classes. For example, the BMW M3 Coupé car is exclusively designed for rich motorsports-people who want luxury cars.

Reference List

  1. Babson, S 2007, Lean Work: Empowerment and Exploitation in the Global Auto Industry, Detroit, Wayne State University Press.
  2. Barnes, C Blake, H & Pinder, D 2009, Creating & Delivering your Value Proposition Managing Customer Experience for Profit, London, Kogan Page Publishing.
  3. Bellon, BP 2009, Mercedes in Peace and War: German Automobile Workers, 1903-1945. New York, Columbia University Press.
  4. Bentley, R 2005, BMW 3 Series (E46): Service Manual : M3, 323i, 323ci, 325i, 325ci, 325xi, 328i, 328ci, 330i, 330ci, 330xi : Sedan, Coupe, Convertible, and Sport Wagon : 1999, 2000, 2001, 2002, 2003, 2004, 2005, Cambridge, Bentley Publishers.
  5. Clarke, RM 2006, BMW Z3, M Coupes & Roaders, Gold Portfolio 1996-2002, Cobham, Brooklands.
  6. Coombs, M & Rendle, S 2006, Owners Workshop Manual for BMW 3-Series. Spark Ford, Haynes Publishers.
  7. Domansky, LR 2011, SWOT Analysis and Decision Making in Profit Organizations, New York, Novinka Books.
  8. Eckermann, E 2010, World History of the Automobile, Warrendale, Society of Automotive Engineers.
  9. Heneric, O, Licht, G & Sofka, W 2011 Europe's Automotive Industry on the move: Competitiveness in a Changing World, Heidelberg, Physica-Verlag Publishers.
  10. Levinsohn, JA 2011, International Trade and the U.S. Automobile Industry: Current Research, Issues and Questions. Cambridge, National Bureau of Economic Research.
  11. Lewin, OT 2008, BMW. St. Paul, Motorbooks International.
  12. Lewin, OT 2004, The Complete Book of BMW: Every model since 1950. St. Paul, Motorbooks International.
  13. Schumann, M 2007, The German Automobile Industry In Transition. London, Kogan Page Publishing.
  14. Osswald, S 2007, Description of the German Automotive Industry - Critical Analysis of the types of businesses existing in the Industry and the Government Policies Impacting on the Industry. Munchen, GRIN Verlag.
  15. Streeck, W 2005, Industrial Relations and Technical Change in the British, Italian, and German Automobile Industry: Three Case Studies. Oxford, Oxford Univeristy Press.
  16. Wong, D 2010, Cram's Reports: Automobile Industry and General Business, Detroit, Detroit Associates, Inc.
Code: Sample20

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