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Background of the company
Bayerische Motoren Werke AG, also known as the Bavarian Motor Works, is a German company that manufactures automobiles, engines, and motorcycles. The company, whose name is abbreviated as BMW or BMW AG, was founded in 1916.
BMW’s headquarters is located in Munich, Bavaria. The company has a subsidiary known as Rolls- Royce Motor Cars. BMW mainly makes luxury cars. It also manufactures mini cars as well. The motorcycles are produced under BMW Motorrad.
BMW is among the top automobile producing companies in the world. It is listed among the ‘German Big 3’ automobile producers that make luxury cars, the other two being Audi and Mercedes-Benz.
In addition, the three ‘German Big 3’ happen to be the world’s best sellers of luxury cars. The company produces over 1 million automobiles every year and over 100,000 motorcycles. These figures incorporate all the BMW brands.
Industry sector: the main competitors and the position of BMW in the market
BMW operates in the automotive industry. This is one of the most competitive industries in the world of business today. The industry has many players, most of them with a significant influence on the market. They happen to be the major competitors for BMW.
Among the topmost competitors facing BMW include Mercedes-Benz and Audi, both German companies. Mercedes-Benz is the closest rival of BMW in terms of competition. Other competitors for the company are Lexus, Acura, Chrysler’s, Volkswagen AG, as well as Daimler, among others.
These are luxury car manufacturers that produce cars similar or with close resemblance to those of BMW. Each of the companies has its own way of winning the competition battle. Some of the competitive strategies they use include differentiation, cost leadership, and focus.
Although Toyota’s main automotive production is not luxury cars, it also has some car models that compete with BMW.
BMW has been able to lead the market over the years, despite the high competition it faces. It is the top producer of luxury cars, suppressing the dominance of Mercedes- Benz and Audi. BMW registers the most sales compared to its closest rivals per year across the globe.
Its major strategies are differentiation and focus. In addition, BMW has more operations compared to its rivals, further giving it an advantage over its competitors.
However, the company is losing part of its competitive position to Mercedes-Benz. The graph below show sales of BMW’s 7 series cars in the first quarter of 2013:
Source: (Valdes-Dapena, 2013)
Products/services provided by BMW and its main selling points
The major product for BMW is automobiles. The company also produces motorcycles and offers automobile related services. It specializes in the production of luxury cars. BMW sells its products in the global market, thus its operations are worldwide.
Not many people are able to buy the luxurious cars due to their high cost. For this reason, the BMW targets the people with a high income, as well as those with middle income mainly in developed countries. Its major selling points are in the United States of America, Canada, and Europe.
Additional Information: Decision making
A Decision Support System (DSS) can be used in various problem domains within the business organization. Problem solving involves decision making, thus DSS could be a very important tool in the process given the abilities it gives to the managers.
Decision making is a process that involves stages. Under the first topic, decision support system can be used in the intelligence phase of decision making (Sharda & Delen, 2011). This is the phase that involves the collection of any necessary information that can be useful to the decision maker.
Vast information is required to help the decision maker understand all the perspectives of the decision and make a well informed decision. DSS tools can be used to gather the relevant information.
DSS has four major components, namely: data, models, interface, and knowledge. DSS has a database that contains data sources from both within the organization and outside the organization.
The data offers support to information requirements in the organization and facilitates decision making. BMW management relies on this data to make it valuable decisions. Models, on the other hand, could be either mathematical or analytical.
They are used in the analysis of complex data and they make it easy for users to interpret it and acquire relevant information. Depending on the available data, BMW management will choose the appropriate model so as to facilitate well advised decisions.
Interface is usually in the form of an interactive graphical interface. It enhances the interaction between the DSS and the users of the system. The users in this case are the BMW managers and decision makers. It shows data analysis outcomes in forms that can be easily understood.
Finally, knowledge refers to the inputs of DSS that require manual analysis. There are some data that cannot be easily analysed by the system, thus the user is required to have knowledge to analyse it manually.
Therefore, BMW hires people who have the ability to input such knowledge in analysing data.
Source: Singh (2010)
The figure shows that the decision support systems are for senior managers to help in making strategic decisions.
The design phase is the next stage in the decision making process. This is where the decision maker picks out all the possible solutions to the problem (Sharda & Delen, 2011). There could be more than one solution for a given problem. It is not an easy task to pick out all the possible solutions.
The DSS system helps the decision maker in picking the most appropriate solution from the list of possible solutions. It helps the decision maker to design how the problem is to be resolved.
The DSS system also gives a guideline that can be followed by the decision maker to reach the correct and the best possible decision. Technological insight can be applied in this phase.
The choice phase is the most important stage since this is where the actual decision is made (Sharda & Delen, 2011). Only one solution is picked here out of all the possible solutions given. This is arguably the domain where DSS is most important.
The decision made here has the capability of defining the fate and the future of the organization. Therefore, there is no or there is little, if any, room for error that exists.
The DSS is run such that it sieves the alternatives to come up with one best solution. The solution that is selected is then implemented.
The implementation phase is the last domain. The decision has already been made at this stage. Implementation might not be a big challenge to the decision maker, although it should be taken with a lot of caution (Sharda & Delen, 2011).
The DSS can assist in giving guidelines on how the decision is to be implemented. However, the implementation process can still be run successfully without the help of the DSS.
It is important to note that a good decision can fail if the implementation is not done in the right way. Monitoring of the decision follows once it has been implemented.
An assessment of the DSS and BI requirements for BMW to remain competitive in the future
Decision making is one of the most important activities in any organization. Decisions made have a direct impact on the performance of an organization, as well as its competitive strength.
For instance, poor decisions negatively affect the performance of the organization and its competitive advantage, while good decisions lead to improved performance and a better competitive position in the market (Sharda & Delen, 2011).
One of the reasons BMW has been able to dominate the luxury car market for a long time is its ability to make good decisions that favour its business.
Managers can use a number of tools that can enable them to make good decisions. One of the most significant decision making tools is the Decision Support System.
Decision making is an important function at BMW, given the competition that it faces from other players in the market. The company needs to decide on how it will improve its current position since failure to take any action will see it being overthrown from its position.
Decision Support Systems provide decision makers with alternatives from which they can select the best possible decision. DSS is a management tool that supports organizational processes.
The DSS will, therefore, have a high potential of helping BMW in the competitive market in the automotive industry now and in the future. This will ease the competitive pressure that the company is enduring from the likes of Mercedes-Benz.
Business Intelligence (BI), on the other hand, is also a tool that can give the organization a competitive edge.
Business intelligence can be defined as a set of theories, as well as technologies that can be used by the business managers or information system experts to convert raw data into information that can be of help to the business organization.
Information is important in helping the organization make effective and efficient decisions (Sharda & Delen, 2011). The manager and the organizational leaders need a means that can lead them to getting useful business information.
Business Intelligence has the capability of handling large amounts of data that can be used to the advantage of the organization in that the firm can able to access and develop new technologies.
Venturing into new opportunities is a move that will help BMW position itself strategically in the competitive market.
Business intelligence can combine the database and the warehouses to provide appropriate information. This can be done through gathering and analysing data from the market. This enables the BMW to understand the level of demand and the market requirements.
The management will then compare the market requirements/specifications with the specifications of the products in the warehouse.
If the warehouse specifications do not match the market specifications, then the management of BMW will plan for an improvement on the products in the warehouse in the bid to maximize customer satisfaction and maintain competitiveness.
Some of the tools that can be used in business intelligence in BMW include data mart and Meta data. Data mart is used is in the warehouse and is oriented to specific business teams. Meta data, on the other hand, is the data that is used in the design phase.
It is divided into structural Meta data and descriptive data. The former specifies data structures, while the later refers to specific data applications. These are the two major type data that BMW uses in order to improve its production so as to match customer requirements.
BMW is an organization that operates in a highly competitive business environment. The management of BMW, therefore, needs to be armed with information that will help it implement strategies that will place the company in a strategic and competitive position.
Mercedes-Benz has been working tirelessly over the past few years to ensure that it overhauls BMW from its position in terms of competition. Mercedes-Benz has come very close to BMW in competition lately, thereby increasing the pressure on BMW.
In 2012, for instance, the sales of BMW were said to have fallen by a small percentage, while those of Mercedes-Benz increased a little bit. This is an indication that Mercedes-Benz is exerting a lot of pressure on BMW in terms of competition.
Proven DSS nomenclatures
Decision engineering is one of the DSS nomenclatures that can be applicable at BMW. It is a framework that brings together best practices to facilitate decision making.
The best approaches have to be adopted to make the best decisions at BMW. Under this nomenclature, it is believed that better decisions are made when the decision makers adopt a structured approach.
Decision experts identify any uncertainties that may be associated with a given decision. Decisions about the future are surrounded with a lot of uncertainties because no one knows what will happen in the future.
It will be possible to reduce the uncertainties of the decisions made by BMW through decision experts, thereby increasing their effectiveness and the company’s competitiveness.
List of References
Sharda, R, & Delen, D 2011, Decision support and business intelligence, 9th edn, Pearson Prentice Hall, Upper Saddle River, NJ.
Singh, D 2010, Information system. Web.
Valdes-Dapena, P 2013, ‘Tesla sales beating Mercedes, BMW and Audi‘, CNN Money May 13. Web.
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