Pest Analysis of Bmw Essay

Along with the world debut of the new BMW 5 Series Sedan (earlier post) at the 2010 Geneva Motor Show, BMW is also presenting the BMW Concept 5 Series ActiveHybrid—its first combination of a BMW straight-six with electric drive. Integration of BMW ActiveHybrid technology in the new 5 Series model reduces both fuel consumption and emissions by more than 10%.

The drive system featured in the BMW Concept 5 Series ActiveHybrid consists of a straight-six gasoline engine with TwinPower Turbo technology, eight-speed automatic transmission, and an electrical drive system developed specifically for this model fitted between the engine and transmission. An automatic clutch connects the gasoline engine and the electric motors. Drawing its energy from a high-voltage battery at the back of the car, the electric motor develops maximum output of 40 kW.

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The drivetrain technology featured in the BMW Concept 5 Series ActiveHybrid allows all-electric driving in city traffic. An Auto Start Stop function offers additional efficiency by consistently switching off the combustion engine when stopping at the traffic lights, a road junction, or in congested traffic. The electric motor also offers a boost function, supporting the gasoline engine in generating particularly dynamic drive power for an even more sporting driving experience in the car.

The 5 Series hybrid also uses the auxiliary climate control function already featured in the BMW ActiveHybrid 7. The high-voltage battery developed for this specific concept is fitted within a high-strength special case near the rear axle of the BMW Concept 5 Series ActiveHybrid. This leads to an optimum position in terms of both safety and harmonious weight distribution. An integrated control unit permanently analyses the charge status of the high-voltage battery and controls both the battery charge process by way of Brake Energy Regeneration and the system cooling process.

Apart from the electric motor, the high-voltage battery also delivers electric power to the car’s on-board network. Among other things, this allows efficient operation of the car’s auxiliary climate control activated whenever required by a remote control function to cool down the car’s interior significantly even before starting the engine. All electrical functions such as the audio system, climate control or navigation remaining fully available even with the combustion engine switched off in all-electric drive mode or by the start stop system.

Intelligent energy management. A high level of all-round networking allows the power electronics to provide intelligent energy management, tailoring the interaction of the two drive units to the driver’s requirements, and optimizing the operating strategy of the entire vehicle under all conditions. A further feature of energy management in the BMW Concept 5 Series ActiveHybrid is the car’s ability to adjust its operating strategy not just to current, but also to upcoming driving conditions.

To do this the power electronics from the start evaluate data indicating a possible change in exterior conditions or the driver’s wishes and prepare the components in the drivetrain as well as the car’s electronic system for a possible change in requirements. To analyse driving conditions up front, the system uses data provided by engine and chassis management as well as the sensors in the driver assistance systems on board the car. Data saved in the navigation system on the route chosen by the driver likewise goes into the final calculation, enabling the system to forecast driving conditions on the route directly ahead.

Then, proceeding from this analysis, the car is coordinated in advance and the optimum use of all systems serves to use the energy available with maximum efficiency. Should the system determine, for example, that the highway ahead is about to lead downhill, the charge level of the high-voltage battery is intelligently controlled in advance to regain brake energy upfront with maximum efficiency. Similarly, the high-voltage battery may be fully charged in good time before the driver reaches his destination, enabling the system to switch off the combustion engine at an early point and change to all-electric drive along the final stretch of road.

Indeed, this forward-looking function is able to extend the cruising range on electric power by up to 30% n analyzing the macro-environment, it is important to identify the factors that might in turn affect a number of vital variables that are likely to influence the organization’s supply and demand levels and its costs (Kotter and Schlesinger, 1991; Johnson and Scholes, 1993). The “radical and ongoing changes occurring in society create an uncertain environment and have an impact on the function of the whole organization” (Tsiakkiros, 2002).

A number of checklists have been developed as ways of cataloguing the vast number of possible issues that might affect an industry. A PEST analysis is one of them that is merely a framework that categorizes environmental influences as political, economic, social and technological forces. Sometimes two additional factors, environmental and legal, will be added to make a PESTEL analysis, but these themes can easily be subsumed in the others. The analysis examines the impact of each of these factors (and their interplay with each other) on the business.

The results can then be used to take advantage of opportunities and to make contingency plans for threats when preparing business and strategic plans (Byars, 1991; Cooper, 2000). Kotler (1998) claims that PEST analysis is a useful strategic tool for understanding market growth or decline, business position, potential and direction for operations. The headings of PEST are a framework for reviewing a situation, and can in addition to SWOT and Porter’s Five Forces models, be applied by companies to review a strategic directions, including marketing proposition.

The use of PEST analysis can be seen effective for business and strategic planning, marketing planning, business and product development and research reports. PEST also ensures that company’s performance is aligned positively with the powerful forces of change that are affecting business environment (Porter, 1985). PEST is useful when a company decides to enter its business operations into new markets and new countries. The use of PEST, in this case, helps to break free of unconscious assumptions, and help to effectively adapt to the realities of the new environment.

Main Aspects of PEST Analysis Economic conditions affect how easy or how difficult it is to be successful and profitable at any time because they affect both capital availability and cost, and demand (Thompson, 2002). If demand is buyout, for example, and the cost of capital is low, it will be attractive for firms to invest and grow with expectations of being profitable. In opposite circumstances firms might find that profitability throughout the industry is low. The timing and relative success of particular strategies can be influences by economic conditions.

When the economy, as a whole or certain sectors of the economy, are growing, demand may exist for a product or service which would not be in demand in more depressed circumstances. Similarity, the opportunity to exploit a particular strategy successfully may depend on demand which exists in growth conditions and does not in recession. Although a depressed economy will generally be a treat which results in a number of organizations going out of business, it can provide opportunities for some (Robinson and et al. , 1978; Thompson, 2002).

Economic conditions are influenced by political and government policy, being a major influence affecting government decisions. The issue of whether European countries join, or remain outside, the single European currency is a case in point. At any one time either exported or imported goods can seem expensive or inexpensive, dependent upon currency exchange rates. There are many other ways, however, in which government decisions will affect organizations both directly and indirectly, as they provide both opportunities and threats.

While economic conditions and government policy are closely related, they both influence a number of other environmental forces that can affect organizations. Capital markets determine the conditions for alternative types of funding for organizations. They tend to be a subject to government controls, and they will be guided by the prevailing economic conditions. The rate of interest charged for loans will be affected by inflation and by international economics and, although the determining rate may be fixed by a central bank, as it is the case with the Bank of England, that will also be influenced by stated government priorities.

According to Thompson (2002), government spending can increase the money supply and make capital markets more buoyant . The expectations of shareholders with regard to company performance, their willingness to provide more equity funding or their willingness to sell their shares will also be affected. The labour market reflects the availability of particular skills at national and regional levels; this is affected by training, which is influenced by government and other regional agencies. Labour costs will be influenced by inflation and by general trends in other industries, and by the role ad power of trade unions.

The sociocultural environment encapsulates demand and tastes, which vary with fashion and disposable income, and general changes can again provide both opportunities and threats for particular companies (Thompson, 2002; Pearce and Robinson, 2005). Over-time most products change from being a novelty to a situation of market saturation, and as this happens pricing and promotion strategies have to change. Similarly, some products and services will sell around the world with little variation, but these are relatively unusual.

Organizations should be aware of demographics changes as the structure of the population by ages, affluence, regions, numbers working and so on can have an important bearing on demand as a whole and on demand for particular products and services. Threats to existing products might be increasing: opportunities for differentiation and market segmentation might be emerging. Technology is widely recognised by various literature on strategic management (Capron and Glazer, 1987; Johnson and Scholes, 1993; Jan, 2002), as part of the organization and the industry part of the model as it is used for the creation of competitive advantage.

However, technology external to the industry can also be captures and used, and this again can be influenced by government support and encouragement. Technological breakthroughs can create new industries which might prove a threat to existing organizations whose products or services might be rendered redundant, and those firms which might be affected in this way should be alert to the possibility. Equally, new technology could provide a useful input, in both manufacturing and service industries, but in turn its purchase will require funding and possibly employee training before it can be used.

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