One of the topmost luxury automobile manufacturers in the world, Audi is as much known for its car as for its sophisticated luxury. Audi is a completely owned group of Volkswagen and has one of the most famous logos of automobile history – the four interconnected rings of Audi. Here is the SWOT analysis of Audi.
Strengths in the SWOT analysis of Audi
Technology and engineering – Audi is known for the engineering and precision behind their cars. And that is exactly what they market. The look and design of the car comes with precision engineering and use of high capacity engines. The same looks cannot be achieved without the proper manufacturing facilities or the right manufacturing process.
Brand name – A brand is a promise and Audi definitely carries the “trust” factor behind it. Known as one of the most safe cars in the world, Audi has the design, the technology and the safety to be one of the best cars around. Furthermore, years of proper marketing communications and years of introducing newer, faster and more sleek cars has added to the brand name of Audi as a super premium car manufacturer.
Products – For an automobile manufacturer, the products are the key driving elements for the success or failure of the company. This is where Audi is at its best. Audi has varying series of car models, all from premium to super premium to ultra premium. The A series and the Q series of Audi cars are one of the most popular and in demand series from Audi. But other then that, Audi also focuses on innovation with cars like Audi ultra, Audi Quattro, Audi sport and others.
Design – BMW, Mercedes, Audi, Ferrari, all these cars are known and are premium because of the design of their cars. Sleek, Sophisticated and Rich, all these attributes can be associated with an Audi car. Audi cars are differentiated mainly by its logo which involves 4 interconnected circles. Besides these, the car comes in hatchback as well as sedan and luxury cars. The accessories which accompany an Audi car is almost as famous as the car itself. Air bags for safety, seat and mirror warmers, automated gears, the interior decoration of the car, all of these things contribute to the design element of Audi.
Weaknesses in the SWOT analysis of Audi
Diversification – BMW diversified itself into low cost cars and has kept a larger product portfolio because it wants to increase its turnover. Same strategy has not been followed by Audi because of which BMW has taken the front seat in the luxury car segments leaving Audi lagging behind.
Promotions and communications – The message of Audi ads always hits the bullseye. However, Audi needs to pick up the frequency of promotions as well. You will see Audi promoting even less then BMW which is a mistake. Although premium brands need not be present everywhere, regular and to the point promotions which set the idea of “premium” in the minds of the customers need to shown again and again. Both BMW and Mercedes are promoting more vigorously then Audi.
Opportunities in the SWOT analysis of Audi
Target Emerging markets – Because of its presence in limited number of markets, Audi can introduce its products in emerging markets as well, thereby covering more geographical territory and bringing more turn over and profits for themselves.
Innovate for mature markets – Innovation and diversification in mature markets will give Audi an edge from their competitors making them stand apart in the crowd. Innovation can be in the form of battery fueled premium cars, or more energy efficiency or the overall working of cars in themselves. Innovation is a driving force behind differentiation which will help Audi in the long run.
Threats in the SWOT analysis of Audi
Limited markets – The market is limited and the share of the pie is going to other premium brands as well. This may cause saturation in the long run.
Threats in general to luxury cars – Younger generation spending more on gadgets and realizing the value of savings on other products
Risks of international markets – Audi cannot survive with its home territory. It has to spread internationally. The PEST risks across countries is high which takes a lot of time of the brand to manage.
Competition – Like any industry, competition is high even in the luxury car manufacturers segment, the competition being strongest from BMW.
Thus overall, even though the going is good for Audi, the future is grim with the opportunities to expand being limited in mature markets and at the same time rising competition from Mercedes and BMW as well as other premium cars. However, Audi being Audi, we are sure that the company will thrive in the long run and make the necessary strategy changes to expand further and become more profitable.
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