Presented by:

Hemanshu Patel
Mukesh Chaudhary
Murtaza Abkari
Nishee Gautam
Rukmani Gupta
 INTRODUCTION
• BMW is a German luxury vehicle, sports car, motorcycle, and engine
manufacturing company founded in 1917. It is one of the best-selling luxury
automakers in the world. The company headquartered in Munich. BMW is the
parent company of Mini and Rolls-Royce Motor Cars. The company produces
motorcars under the BMW Motorsport division and motorcycles under BMW
Motored, and plug-in-electric cars under the BMW-I sub-brand and the
"performance" model designation within the regular BMW line-up.
Founders of BMW:

Karl Rapp Camillo Castiglioni Franz Josef Popp

PRESENT LOCATION
BMW announced in 1992 that it would build a 1,150-acre (4.7km2) manufacturing
facility in Spartanburg County, South Carolina, United States to strengthen its
international production system. The plant opened in 1994. The $2.2 billion plant,
which employs 8,800, is one of the company’s global five plant production
networks.
• The first car which BMW successfully produced and the car which
launched BMW on the road to automobile production was the Dixi, it
was based on the Austin 7 and licensed from the Austin Motor
Company in Birmingham, England.
Reasons for BMW is so successful brand

• Well there are several reasons behind its success, most important one is quality.
It excels in quality and technology both - sheer driving pleasure. So, overall BMW
represents a luxurious experience. It has also got a strong brand image.

• It invests in technology and quality. However, the perception of the brand is

mainly that of a luxury brand. Recently, it started introducing some low priced
variants like its bike which is going to be introduced to developing markets.

• Quality and reliability are also strong points behind BMW success today. They
believe in excellence in everything they do: service, product quality, customer
relationships.
Strategy number one
• In autumn 2007, BMW group adopted the Strategy Number ONE with
its four pillars: “Growth”, “Shaping the future”, “Profitability”, “Access
to technology and customers”.
• It aligns the BMW Group with two targets: to be profitable and to
enhance long-term value in times of change.
• The mission statement up to the year 2020 is clearly defined:
“To become the world’s leading provider of premium products
and premium services for individual mobility.”
IFE (INTERNAL FACTOR EVALUATION) MATRIX
• IFE (Internal factor evaluation) matrix is one of the best strategic tool to perform internal
audit of any firm. IFE is use for internal analysis of different functional areas of business
such as finance, marketing, IT, operations, accounts, Human Resources and others depend
upon the nature of business and its size.

• Internal factors are the outcome of detailed internal audit of a firm Obviously, every
company have some weak and strong points, therefor the internal factors are divided into
two categories namely strengths and weakness.

• RATING
• There are some important point related to rating in IFE matrix.
• Rating is applied to each factor.
• Major weakness is represented by 1.0
• Minor weakness is represented by 2.0
• Minor strength represented by 3.0
• Major Strength represented by 4.0
WEIGHT
Weight attribute in IFE matrix indicates the relative importance of factor to
being successful in the firm’s industry. The weight range from 0.0 means not
important and 1.0 means important, sum of all assigned weight to factors
must be equal to 1.0 otherwise the calculation would not be consider correct.

WEIGHTED SCORE
Weighted score value is the result achieved after multiplying each factor rating
with the weight.

TOTAL WEIGHTED SCORE

The sum of all weighted score is equal to the total weighted score, final value
of total weighted score should be between range 1.0 (low) to 4.0(high). The
average weighted score for IFE matrix is 2.5 any company total weighted score
fall below 2.5 consider as weak. The company total weighted score higher then
2.5 is consider as strong in position.
BMW INTERNAL FACTOR EVALUATION(MATRIX)
STRENGTHS
KEY EXTERNAL FACTORS WEIGHT RATING WEIGHTED SCORE

Excellent Brand Recognition 0.12 3 0.36

Strong Global Presence 0.11 4 0.44
Distribution Network 0.08 4 0.32
Environmentally Friendly Options 0.08 4 0.32
Production Rates 0.07 4 0.28
Strong Research and Development Department 0.05 3 0.15
Skilled Workforce 0.04 4 0.16
Safety 0.03 4 0.12
Market Size 0.02 4 0.08
Strongest Product: Series 3 0.02 4 0.08
WEEKNESSES
KEY EXTERNAL FACTORS WEIGHT RATING WEIGHTED SCORE

Advertising 0.08 2 0.16

Brand Diversity 0.06 2 0.12

Increasing Sales From Competitors at a Faster Pace 0.05 3 0.15

High Cost Structure 0.05 4 0.20

High Repair Costs 0.04 2 0.08

Number of Recalls 0.04 1 0.04

Perception of Being Limited 0.03 1 0.03

Lack of Acquisition and Merger Background 0.03 1 0.03

Total 1.00 3.12

EFE MATRIX (EXTERNAL FACTOR EVALUATION
MATRIX)
•The EFE matrix is the strategic tool used to evaluate firm existing strategies, EFE matrix
can be defined as the strategic tool to evaluate external environment or macro
environment of the firm include economic, social, technological, government, political,
legal and competitive information.

•The EFE matrix is similar to IFE matrix the only difference is that IFE matrix evaluate the
internal factors of the company and EFE matrix evaluate the external factors.

•EXTERNAL FACTORS ARE DIVIDED INTO TWO CATEGORIES OPPORTUNITIES AND THREATS.
1) Opportunities
2) Threats
RATING
Rating in EFE matrix represent the response of firm toward the opportunities and threats. Highest the rating
better the response of the firm to exploit opportunities and defend the threats. Rating range from 1.0 to 4.0 and
can be applied to any factor whether it comes under opportunities or threats.

There are some important point related to rating in EFE matrix.

•Rating is applied to each factor.
•The response is poor represented by 1.0
•The response is average is represented by 2.0
•The response is above average represented by 3.0
•The response is superior represented by 4.0

WEIGHT

Weight attribute in EFE matrix indicates the relative importance of factor to being successful in the firm’s
industry. The weight range from 0.0 means not important and 1.0 means important, sum of all assigned weight to
factors must be equal to 1.0 otherwise the calculation would not be consider correct.
WEIGHTED SCORE
Weighted score value is the result achieved after multiplying each factor rating with the weight.

TOTAL WEIGHTED SCORE

The sum of all weighted score is equal to the total weighted score, final value of total weighted score should be
between range 1.0 (low) to 4.0(high). The average weighted score for EFE matrix is 2.5 any company total weighted
score fall below 2.5 consider as weak. The company total weighted score higher then 2.5 is consider as strong in
position.
BMW EXTERNAL FACTOR EVALUATION(MATRIX)
OPPORTUNITIES
KEY EXTERNAL FACTORS WEIGHT RATING WEIGHTED SCORE
Expand Brand Portfolio 0.12 3 0.36
New Emission Standards 0.04 4 0.16
Market to Lower Income 0.10 1 0.10
New Non-traditional Marketing Opportunities 0.10 2 0.20
Growing Used Car Market in UK 0.04 3 0.12
Changing Customer Needs 0.06 3 0.18
Increasing Fuel Pricing 0.08 4 0.32
Rising Green Awareness 0.02 4 0.08
Growth in Asia 0.02 4 0.08
Growth in Global Car Market 0.04 4 0.16
THREATS
KEY EXTERNAL FACTORS WEIGHT RATING WEIGHTED SCORE

Intense Competition 0.05 4 0.20

Rising Row Material Price 0.05 3 0.15

Decreasing Fuel Prices 0.04 3 0.12

Growing Euro Exchange Rate 0.03 3 0.09

Recalls 0.04 1 0.04

Ease of Entry Into Market 0.04 3 0.12

Competitor Pricing 0.04 2 0.08

Faster And New Products From Competitors 0.09 4 0.36

Total 1.00 2.92

 INTERNAL EXTERNAL- IE MATRIX

IE stands for Internal external as the name suggest that it’s based upon internal and external
factors of the organization. The IE is an important strategic tool which comes under the
portfolio management considered much similar to BCG Matrix. The IE matrix used to plot the
organization divisions in nine cell diagram, each cell have some meaning associated which
suggest strategies.

WHAT ARE THE CLASSIFICATION ON X AND Y- AXIS?

On x-axis of the IE matrix, the IFE total weighted score of 1.0 to 1.99 represent weak position,
2.0 to 2.99 considered as Average and 3.0 to 4.0 on high extremes is strong. On Y-axis score of
1.0 to 1.99 represent low, 2.0 to 2.99 considered as Average and 3.0 to 4.0 is strong.
The Internal External Matrix -
Strong Average Weak
4
Grow
High &
Build
3
Total EFE Score

(3.12,2.92) Hold
Medium &
Maintain
2

Harvest
Low &
Divest
1
4 3 2 1
Total IFE Score
CPM (COMPETITIVE PROFILE MATRIX)
• Competitive profile matrix is an essential strategic management tool to
compare the firm with the major players of the industry. Competitive profile
matrix show the clear picture to the firm about their strong points and
weak points relative to their competitors. The CPM score is measured on
basis of critical success factors, each factor is measured in same scale mean
the weight remain same for every firm only rating varies. The best thing
about CPM that it include your firm and also facilitate to add other
competitors make easier the comparative analysis.

• IFE matrix only internal factors are evaluated and in EFE matrix external
factors are evaluated but CPM include both internal and external factors to
evaluate overall position of the firm with respective to their major
competitors.
CRITICAL SUCCESS FACTORS

Critical success factors are extracted after deep analysis of external and internal environment of the
firm. Obviously there are some good and some bad for the company in the external environment and
internal environment. The higher rating show that firm strategy is doing well to support this critical
success factors and lower rating means firm strategy is lacking to support the factor.

RATING

•The response is poor represented by 1.0

•The response is average is represented by 2.0
•The response is above average represented by 3.0
•The response is superior represented by 4.0

WEIGHT

Weight attribute in CPM indicates the relative importance of factor to being successful in the firm’s
industry. The weight range from 0.0 means not important and 1.0 means important, sum of all
assigned weight to factors must be equal to 1.0 otherwise the calculation would not be consider
correct.
WEIGHTED SCORE
Weighted score value is the result achieved after multiplying each factor rating with the weight.

TOTAL WEIGHTED SCORE

The sum of all weighted score is equal to the total weighted score, final value of total weighted score
should be between range 1.0 (low) to 4.0(high). The average weighted score for CPM matrix is 2.5 any
company total weighted score fall below 2.5 consider as weak. The company total weighted score higher
then 2.5 is consider as strong in position. The other dimension of CPM is the firm with higher total
weighted score considered as the winner among the competitors.

Benefits of the CPM:

•The same factors are used to compare the firms. This makes the comparison more accurate.
•The analysis displays the information on a matrix, which makes it easy to compare the companies visually.
•The results of the matrix facilitate decision-making. Companies can easily decide which areas they should
strengthen, protect or what strategies they should pursue.
 COMPETITORS PROFILE MATRIX
BMW AUDI MERCEDES

Critical success Weight Rating Score Rating Score Rating Score

factors

Brand Loyalty 0.10 3 0.3 2 0.2 4 0.4

Cash Flow 0.025 3 0.08 4 0.10 1 0.03

Compliance 0.15 3 0.45 2 0.30 3 0.45

Distribution 0.10 4 0.40 3 0.30 4 0.40

Network
Flexibility 0.05 4 0.20 4 0.20 4 0.20

Operational 0.15 2 0.30 4 0.60 3 0.45

Efficiency
Positive Image 0.15 4 0.60 4 0.60 2 0.30
 BMW Audi Mercedes

Critical success Weight Rating Score Rating Score Rating Score

factors

Product Quality 0.15 4 0.60 4 0.60 4 0.60

Resource Sharing 0.025 4 0.10 4 0.10 4 0.10

Social 0.10 4 0.40 4 0.40 4 0.40

Responsibility

TOTAL 1.00 3.43 3.40 3.33