Master’s Thesis from the year 2017 in the subject Business economics – Offline Marketing and Online Marketing, grade: 1, 3, University of applied sciences, Munich, language: English, abstract: The automotive industry is facing the biggest changes in its more than 100 years of existence. At the end of this decade, the first electric vehicle is going to enter the mass market that can compete on product features, comfort and price with the internal combustion engines. People keep moving into urban areas. The requirements toward future mobility increase. Some countries already decided to prefer electric vehicles to conventional cars. Profits will shift to other markets or segments. Incumbents must align their current strategies to keep their market share in the future and participate in future profit pools of the automotive industry.
BMW and Tesla have different strategic approaches to the upcoming changes in the industry. BMW, as many other OEMs, is aware of future challenges and disruptive forces and has much more resources to manage the required investments in R&D than smaller start-ups. However, disruptive forces come from lower functionality and low-cost products that are usually overlooked by dominant firms in an industry.
This research analyzes the two automotive companies BMW and Tesla by using the common strategy analysis tools. First, the firms’ external environment is analyzed by using the PESTEL analysis, describing relevant trends that affect the strategic decision of the two companies. An industry overview with future projections is provided.
Secondly, an internal analysis is performed. SWOT analysis and the VRIO framework form the basis to define the strengths, weaknesses, unique recourses and capabilities of BMW and Tesla.
The conclusion provides an overall discussion of the most important findings emerging from the analysis with regard to the business operations and the existing business models of the two car manufacturers. Furthermore, important implications for the adaption and adjustment processes are discussed.
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