BMW PESTEL Analysis

PESTEL acronym corresponds to political, economical, social, technological, legal, and ecological factors impacting organisations. The following table illustrates BMW PESTEL analysis:

PESTEL ANALYSIS

Political

Economical

Enforcement of new laws related to CO2 emission

Volatility of GBP:EURO exchange rates

Change in EU legislation related to end-of-life vehicle (ELV) recycling

Appreciation of Renminbi (RMB) of 1% to 2% during 2012

Level of political stability in emerging countries

Vast GDP fluctuations in EU countries during the last few years

Possibility of the UK to stop its EU membership

Volatility of price for crude oil

Social

Technological Ageing population in European markets

Increasing levels of popularity of green technologies

Changing family patterns (increasing numbers of same sex marriages, single parents etc.)

Technological breakthroughs in auto manufacturing industry

Integration of internet-enabled technologies in automobile industry

Changing consumer attitudes towards savings and spending

Increasing levels of demand for alternative fuels

Rising life expectancy in developed countries

Realisation of the concept of driverless car

Legal

Ecological Changes in employee health and safety rules and regulations

Increasing levels of consumer concern towards green products

Patents and Copyrights in relation to innovation on auto devices and functionalities

Effects of non-government environmental organisations

Changes in waste management practices

Changes in laws and regulations specific to car manufacturing sector

Changes to relevant EU Directives

Political Enforcement of new laws related to CO2 emission and change in EU legislation related to end-of-life vehicle (ELV) recycling are major political factors that affect BMW manufacturing processes. Level of political stability in emerging markets such as Russia, China, and Brazil can be highlighted as additional political factors impacting BMW in a way that political instability in these countries can have negative implications on local consumer spending patterns, and also BMW investments in respective countries may be subjected to risks.

Economical Impacts of a wide range of economical factors on BMW performance are evident and significant. Namely, vast GDP fluctuations in EU countries during the last few years with direct implications on consumer spending in EU countries is a substantial economic factor that affects BMW.

Moreover, additional economic factors that affect BMW revenues include, but not limited to appreciation of Renminbi (RMB) of 1% to 2% during 2012, volatility of GBP:EURO exchange rates, and volatility of price for crude oil.

Social There is a set of social tendencies in local and global scales and the impact of these tendencies need to be taken into account by BMW management in strategic decisionmaking. For example, changing family patterns such as increasing numbers of same sex marriages, single parents etc. mark demographic and social trends that may impact consumer spending patterns in relation to premium automobile products such as BMW cars. Additional social and demographic trends from this category include ageing population in European markets, rising life expectancy in developed countries, changing values, changing consumer attitudes towards savings and spending and others.

Technological Impacts of technological factors for BMW are also significant and they are mainly associated with potentials for increasing the levels of effectiveness of various business processes through technological innovations. Technological factors impacting BMW also involve increasing levels of popularity of green technologies, increasing levels of demand for alternative fuels, realisation of the concept of driverless car, and integration of internet-enabled technologies in automobile industry

Legal It is compulsory for BMW activities and business processes to confirm with a wide range of rules and regulations in local, regional, governmental and international levels, therefore any changes in relevant rules and regulations are likely to impact BMW performance. Moreover, patents and copyrights in relation to innovation on auto devices and functionalities can be specified as significant legal issues to be approached by BMW in an appropriate manner.

Ecological The impact of ecological factors on private sectors organisations such as BMW has increased significantly during the past several decades. Specifically, ecological factors effecting BMW include increasing levels of consumer concern towards green products, effects of non-government environmental organisations, changes in waste management practices and others.