Opportunities.
The liberalisation of the global markets provides an opportunity that can be exploited. The Bulgarian market in Eastern Europe is a good indication.
The existence of market niches in the 4WD range of the vehicle segment.
Threats.
The major threat was the competition from foreign manufacturers. This is especially with regard to the Japanese companies through Transplants located in Europe.
Due to globalisation, Rover was considered too small to survive in the long run. The loss of attractiveness of the worldwide automobile market enhanced competition within the industry.
Heavy reliance on Honda for technology and production innovation. .
Political/legal threat due to the British Government placing limitations on the development of the alliance with the Japanese.
BMW ACQUISITION OF ROVER:.
The session can begin with a discussion about the car industry in 1993, which can be summarized as follows: .
.
Maturing in life cycle terms.
Becoming global.
Uncertain short'term growth prospects.
Increased cost of technological innovation.
Ever?increasing economies of scale.
Quality improvement a necessity for survival.
Structural change in the US and EU auto sectors as a result of Japanese and Korean activity.
Reconfigured value chain, as assemblers try to get closer to customers.
Brands associated with lifestyles.
BMW: BEFORE THE ACQUISATION.
An assessment of BMW s position in this environment in 1993 includes:.
Strengths:.
The company had a good financial base and performance. BMW went through the recession in the early 1990's profitably. .
The company had good market research and intelligence as seen in their knowledge of Rover operations and models.
The firm possessed strong Research & Development team. The expertise in the Diesel engine sought after by Rover is a good indication of this.
The company enjoyed good market share in its niche. .
The company had good customer focus and understood the customer's tastes and preferences well.