A combination of factors: Injuries (Coman, Tolisso and lately Thiago), relying in aging and declining players such as Robbery, Martinez and Boateng, players underperforming (such as Mueller and James), Kovac seeming to have lost the dressing room (German media faulted him for speaking too much Croatian during training, fights with James over playing time, Ribery openly snubbing him, and there are apparently two moles in their dressing room that always leak stuff to the media) and on top of that Bayern's board's refusal to spend money buying quality players.
That Canadian kid they are adding looks pretty promising and Coman is almost ready to return so we will see.