Stages of Industry Life Cycle BMW's strategy is to keep its products in the introduction and growth stages by periodically

y introducing new models in each of its product lines. In fact, BMW does not like to have any products in the maturity or decline stage of the product life cycle. Explains McDowell, "If a product is declining, we would prefer to withdraw it from the market, as opposed to having a strategy for dealing with the declining product. We're kind of a progressive, go get 'em company, and we don't think it does our brand image any good to have any declining products out there. So that's why we work so hard at managing the growth aspect." BMWs product life cycle tries to stay in the first two stages. It wants to keep them in the introductory and growth stages to keep sales high. The maturity and decline stages have lower sales, so they want to avoid those if possible. o To keep BMWs products in the first two stages of the product life cycle, they regularly introduce new models in the 3 and X series. In their seven-year product life cycle, BMW ad a new model each year. These repositions them back in the introductory stage. They also continually modify the series. This is part of the growth stage, where the 3 and X series are currently. By adding new features and improving upon the original model they are differentiating from competitors and gaining as much distribution as possible.

External Stock quote online- compare profits BMW does not trade on the NYSE. The research found below was from the German stock market. Looking at the chart, it doesnt seem like there was much of a difference. But profits for the industry had much greater numbers. For the first quarter, net profit rose to almost 1.21 billion (in German currency), revenues grew 29%. BMW surpassed all industry numbers in the second quarter of 2011 with net profits of 2.57 billion, which was more than doubling results for the same period just one year ago. The results were from the strong sales in China. Revenues for the quarter were $25.4 billion, up from $21.8 billion in the second quarter of the previous year. The first six months of 2011 were the best half-year ever in their companys history. (Thats why if you look at the stocks, during the summer the price boomed up and back down). In 2011 the company delivered 450,608 of its BMW, Mini Coopers, and Rolls-Royce cars to customers, which were up 19% compared with the same period in 2010, which marked a new record. The top sellers included the 5-series sedan, X5 SUV, and the new X3. Profits were especially high in 2011, because of their sales in Asia which were about 50% or more of their sales and because of their new model X3.

Prices Date Dec 1, 2011 Nov 1, 2011 Oct 3, 2011 Sep 1, 2011 Aug 1, 2011 Jul 1, 2011 Open 55.63 57.25 47.26 56.50 71.60 68.70 High 57.41 61.16 62.47 57.97 71.76 73.85 Low 49.42 48.52 43.49 48.65 49.83 64.19 Close 51.76 55.98 59.06 49.97 56.35 69.82 Avg Vol 2,365,000 3,408,700 3,836,900 4,580,400 5,078,500 2,783,500 Adj Close* 51.76 55.98 59.06 49.97 56.35 69.82

Jun 1, 2011 May 13, 2011 May 2, 2011 Apr 1, 2011 Mar 1, 2011 Feb 1, 2011 Jan 3, 2011

61.28

70.02

59.26

68.81

2,861,200

68.81

1.30 Dividend 64.00 59.20 59.32 57.03 59.26 65.30 63.67 61.10 63.68 61.74 58.83 56.22 52.01 55.23 54.17 61.48 63.67 58.75 58.78 56.08 3,618,900 2,611,000 3,249,200 2,884,800 3,172,600 61.48 62.36 57.54 57.57 54.93

* Close price adjusted for dividends and splits.

Competitors- Customers- Suppliers- Who and how they differ Competitors Biggest competitor is Mercedes, then Lexus, and Audi. o Mercedes- Seeing how similar their products are and how closely their histories have been tied together, its not hard to find many ways in which these two auto giants are still making moves that mirror one another. For starters, they both favor the American south for their production facilities. BMW has a plant in South Carolina. Mercedes in Alabama. When it comes to engine power, Mercedes has put their faith in superchargers. BMW, on the other hand, went with turbochargers. With engines, when MBW rolled out the 750iL with its V-12 engine, Mercedes was right behind them with their S600. There are some differences, however. While BMW is putting their chips behind hydrogen fuel cells for future alternative energy vehicles, Mercedes is exploring much every other type of alternative fuel instead. Also, BMW is busy developing a prototype V-16 for Rolls Royce. Mercedes is countering with plans for a possible V-24 engine for Maybach. Suppliers- There are more than 50 suppliers for this company, because they are all car manufacturers making different parts. (Couldnt find any information on this, except for a list of all the suppliers). Customers- Bmw regularly undertakes research into its customers profiles looking at demographic criteria, such as age and sex, lifestyle, their views on motoring and the way in which they use their cars. The information is used across all areas of the business, from the design and development of the cars themselves, to the way BMW advertises its brands. One thing all BMW customers have in common is their appreciation of driving fun and sporty, yet elegantly designed cars. Within the BMW product range, there are differences in their customers profiles. For example, their female customers tend to prefer open driving, reflected in a preference for the BMW 3 series convertible and BMW Z4. The spaciousness and interior versatility of the BMW X models, x3, x5, attract modern families with children in their households (50% to 60% having atleast one child). Their customers have an active lifestyle, within an exceptionally high interest in outdoor activiites, such as water sports, cycling and skiing. Their highest share of urban customers are aged 39 or younger (40%).

Porters Five Forces Bargaining Power of buyers o Medium- while buyers are individuals and are not grouped together, they still have an immense amount of information available to them regarding the pricing and cost to manufacture a BMW. As a result, buyers do have some leverage in being able to negotiate a purchasing price from BMW. Threat of New Entrants o Very Low- In order to enter the automotive market a huge amount of capital is required. In addition, an entering firm would need to have a tremendous amount of tacit and explicit knowledge to design and manufacture products. Threat of Substitute Products o Medium- Available substitutes include public transportation such as buses, trains, boats, and aircraft. In addition, consumers can use other conventional means of transportation such as bicycling or walking. Competitive Rivalry within an industry o Extremely High- Any competitor in this market is generally a global company with billions of dollars in assets and can compete on any level that BMW can. Furthermore, there is intense competition on all fronts in the car market in general, not to mention the luxury car market. Major manufactures such as Toyota and Honda are pinching BMW with their luxury segments (Lexus and Acura) in terms of quality product and reliability. Bargaining Power of suppliers o Medium- Some suppliers are smaller and as such does not have that much power over the pricing and distribution of their products. However, there are not that many parts manufacturers in this market and therefore, the majority of suppliers to major automotive makers are medium to large businesses. As a result they have some flex in determining product pricing, delivery, and distribution.

Strategic Groups BMW- Mini RollsRoyce o I dont know how to make a bubble, and kind of felt like I didnt need to make one because they only have those three groups.