J.

QSPM

Build Four
New
Increase
Production
Dealerships
Facilities in
in China and
China, USA,
Russia
and Eastern
Europe
Opportunities Weight AS TAS AS TAS
1. Growth in sales of luxury vehicles exceeds growth in all other
0.10 3 0.30 4 0.40
automobile categories.
2. Formula One, NASCAR, Indy Racing and other racing
0.04 0 0.00 0 0.00
organizations are outstanding ways to promote products.
3. Growing middle and upper class in China, India, Eastern Europe
0.05 3 0.15 4 0.20
and Latin America.
4. Financially well to do people are less effected by down turns in
0.05 4 0.20 3 0.15
the economy than middle and lower class families.
5. Growing desire for hybrid style cars among customers. 0.03 4 0.12 2 0.06
6. BMW head of sales and marketing recently said “We are
confident of healthy sales growth especially in Asia and the 0.07 4 0.28 3 0.21
Americas.”
7. Ford and GM saw sales drop by around 10% in Europe. 0.07 4 0.28 2 0.14
8. Growing demand for diesel engines and trucks in China and
0.05 4 0.20 1 0.05
other developing markets.
9. Ford and GM continue to struggle in the USA and international
0.08 2 0.16 3 0.24
markets.
10. Germans take a sense of pride in their subject matter and want to
be as well prepared as possible, so they can contribute and make
0.04 0 0.00 0 0.00
key points during the meeting. In general, the German worker is
well skilled.
 Threats Weight AS TAS AS TAS
1. Volkswagen (VW) is the largest car manufacturer in Germany
and aims to double its USA market share from 2% to 4% by 2014, 0.06 3 0.18 1 0.06
and aims to be the world's largest carmaker by 2018.
2. VW introduced diesel-electric hybrid versions of its most
popular models in 2012, including the Jetta, followed by the Golf 0.03 0 0.00 0 0.00
Hybrid and the Passat. VW owns Porsche.
3. Mercedes-Benz is active in three forms of motorsport racing:
Formula Three, DTM, and Formula One. The parent, Daimler 0.04 0 0.00 0 0.00
AG, holds a 60 percent stake in Formula One team Mercedes-
4. Mercedes-Benz’s U.S. sales surged 11% in January 2013, in its
effort to overtake BMW in luxury-auto deliveries for all of 2013. 0.06 3 0.18 1 0.06

5. Lexus sales (owned by Toyota), were up 23% in the USA in 2012

through November, and are expected to gain at least 10% in 0.05 3 0.15 1 0.05
2013.
6. Audi designs, engineers, manufactures and markets automobiles
and motorcycles and competes heavily with BMW on luxury 0.07 0 0.00 0 0.00
cars.
7. Rising gas prices and pressure to produce more fuel-efficient
0.02 0 0.00 0 0.00
automobiles and growing concern over emissions and pollution.
8. Public transportation is fairly common in much of Europe and
0.03 0 0.00 0 0.00
large cities in the USA.
9. “Looking ahead, we expect the headwinds in Europe to remain,”
0.06 2 0.12 4 0.24
said Ian Robertson, BMW’s head of sales and marketing.
 Build Four
New
Increase
Production
Dealerships
Facilities in
in China and
China, USA,
Russia
and Eastern
Europe
Strengths Weight AS TAS AS TAS
1. In June 2012, BMW was listed in Forbes magazine as the #1
0.03 0 0.00 0 0.00
most reputable company in the world.
2. BMW owns and produces the Mini marque, and is the parent
company of Rolls-Royce Motor Cars and produces motorcycles
0.03 0 0.00 0 0.00
under the Motorrad and Husqvarna brands, led by the K 1200
GT, R 1200 RT, and F 800 S models,.
3. BMW Group operates 29 production and assembly facilities in
14 countries and has a global dealer network in more than 140 0.09 4 0.36 3 0.27
countries.
4. BMW's premium lineup includes sedans, coupés, convertibles,
and sport wagons in the 1, 3, 5, 6, and 7 Series, as well as the M3 0.09 0 0.00 0 0.00
coupe and convertible, the X5 sport active, and the Z4 roadster.
5. In calendar 2012, BMW Group sold 1.85 million cars and nearly
117,000 motorcycles worldwide, the highest annual total ever for
0.08 0 0.00 0 0.00
the company and an increase of 10.6% over the previous record
year in 2011.
6. Success was led by the highly successful BMW 1 Series, with a
total of 226,829 vehicles sold in 2012, an increase of 28.6% over
the previous year. The BMW X1 also did great in 2012 with a
0.08 0 0.00 0 0.00
total of 147,776 vehicles sold, up 16.9% over the prior year. The
BMW 3 Series Sedan did best though with 294,039 vehicles
delivered, an increase of 22.4% over 2011.
7. In early 2013, BMW Group and Toyota Motor Corp. extended
their long-term collaboration agreement for the joint
development of a fuel cell system, joint development of
architecture and components for a sports vehicle, joint research 0.05 0 0.00 0 0.00
and development of lightweight technologies, and collaborative
research on lithium-air batteries with a post-lithium-battery
solution.
8. China led all nations with 30,000 BMW vehicles sold in 2012,
0.08 4 0.32 3 0.24
50% higher than the 20,000 sold in the USA.
9. “BMW Genius Everywhere” program will began in the USA in
late 2013, with a full launch by early 2014, which is when the new 0.03 0 0.00 0 0.00
BMW i3 electric car is due to go on sale.
10. Total revenue increased 13% in 2012. 0.05 3 0.15 4 0.20
 Weaknesses Weight AS TAS AS TAS
1. BMW only sold 2,311 units in Russia in 2012. 0.04 1 0.04 4 0.16
2. Over 50% of all motorcycle sales come from Europe. 0.03 3 0.09 2 0.06
3. Note that BMW is the smallest firm (between Daimler, Toyota,
GM, Nissan, and Volkswagen) in terms of # of employees, but 0.04 4 0.16 3 0.12
has the second highest EPS.
4. USA only accounts for 18% of all BMW automobile sold. 0.08 4 0.32 1 0.08
5. USA only accounts for 10% of all BMW motorcycle units sold. 0.02 4 0.08 1 0.02
6. No meaningful sales are derived from developing countries on
0.02 4 0.08 3 0.06
motorcycles.
7. Inventory turnover of 5 vs the industry average of 10. 0.05 0 0.00 0 0.00
8. Quick ratio of 0.66 vs an industry average of 1.0. 0.05 0 0.00 0 0.00
9. Debt-to-equity of 1.24 vs an industry average of 0.70. 0.04 0 0.00 0 0.00
10. Only uses premium gas and cost of repairs can be higher than
0.02 0 0.00 0 0.00
normal.
TOTALS 3.92 3.07

Both strategies are attractive, but building new production plants, especially two new ones in China and
one in the USA, should be undertaken first.