Bmw Group - General Environment of the Automobile Industry

The business environment of the BMW group is influenced by several external factors which lie beyond the company's control (McDonald 2002). These should be examined carefully as they can help to evaluate and select BMW's competitive strategies (Quester 2001). However, it is the aim to focus on key variables instead of providing an extensive list of every single factor that might influence the company's development. Nevertheless one has to bear in mind that the macro environment of a company is not exclusively influenced by the examined factors alone (Shaw 2004). In the following, variables of the external environment of BMW will be examined in terms of the general environment, the industry environment, the strategic group and the competitive environment.

General Environment of the Automobile Industry

Economic Factors

A crucial economic factor for the automobile industry is the price of crude oil. As observed during several oil crises, the demand for cars dropped dramatically. Additionally, oil price instability can indirectly affect the automobile industry by the macroeconomic effect of a recession, which leads to a further plunge in car sales. This has been experienced for the first time during the oil embargo of the OPEC in the 1970s (Lee & Ni 2002). Table 2 indicates the continually rising oil price over the last decade, which makes a reaction of the automobile industry necessary.

The business environment of the BMW group is influenced by several external factors which lie beyond the company's control (McDonald 2002). These should be examined carefully as they can help to evaluate and select BMW's competitive strategies (Quester 2001). However, it is the aim to focus on key variables instead of providing an extensive list of every single factor that might influence the company's development. Nevertheless one has to bear in mind that the macro

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