STEP analysis and Market Segmentation Assignment

STEP analysis and Market Segmentation - Assignment Example The company manufactures its vehicles at 23 production and assembly plants in seven countries and sells them through 34 subsidiaries. The company operates through three business divisions: automobiles, motorcycles and financial services. The automobiles division develops, manufactures, assembles and sells passenger cars and off-road vehicles under the brands BMW, MINI and Rolls-Royce. It also sells spare parts and accessories. BMW and MINI brand products are sold in Germany through showrooms of BMW and independent dealers. The company sells passenger cars outside Germany through subsidiaries and independent import companies. The BMW is responsible for the manufacture products such as: BMW C1, BMW 1 series, BMW 3 series, BMW 5 series, BMW 6 series, BMW 7 series, BMW X3, BMW X5, BMW Z4, MINI, MINI Cooper, MINI Cabriolet and the Rolls-Royce Phantom. BMW's growth over the years had paid off from a boutique European automaker to a global leader in premium cars. Among their products, BMW's MINI Cooper is holding its own against more established rivals in the new car market. It is also one of the lowest depreciating models in terms of used car sales. It is for this reason that BMW has decided to increase its investment into the Mini. This is a wise move, since sustained demand, even after five years on the market, suggests that the model is a mini goldmine. It is unlikely that anyone predicted the success of the Mini Cooper when it was launched by BMW in 2001 - the revamped model has taken the European market by storm. Originally, BMW intended to produce 100,000 vehicles a year but given the high demand, an increased investment of GBP100 million has been set aside for Mini Cooper in 2005, taking the yearly production total to over 200,000 vehicles a year by 2007. After its 2001 launch, BMW hoped to sell 800,000 units of the current Mini in eight years. The Mini plant in Oxford, England, has been refurbished to boost annual capacity to 260,000 units from 200,000. The plant also will build a new variant, the Traveller station wagon, starting in late 2007, and the second-generation Mini convertible starting in 2008 (Ceferri and McVeigh, 18 Sept 2006). While sceptics argued whether it was the right move for BMW to launch Mini Cooper in 2001, the debate has now shifted towards whether the success of the Mini can continue into the future or whether it is just a fad, a little like Volkswagen's new Beetle, where sales fell dramatically after the initial consumer enthusiasm for the new model. BMW certainly thinks that its investment is well justified. The Mini's price point ranges between GBP11,000 to nearly GBP18,000, which pits the car against the popular Volkswagen Golf and Peugeot 307. Despite this, the demand for the model is generally high across the range with a UK waiting list for several models. Additionally, another key indicator with regards to the success of the model is the demand for it in the used car market, where its rate of depreciation is amongst the lowest of any vehicle in the UK. It is these metrics which must have given BMW the impetus to continue funding the development of the Mini. It is already very valuable to BMW, having surpassed all expectations in terms of popularity, and with its sales cycle having now run for four years with demand still riding high, BMW certainly seems onto a winner. In