Category: BMW

Analysis of BMW Campaign to Prevent Drunk Driving

Luxurious, sleek, and sporty are some words that come to mind when I think of a BMW. I picture a speedy automobile with an aggressive look and the performance that backs it up. I do not think of is a person that has lost their leg due to a drunk driving crash. Every two minutes someone is injured in a drunk driving accident (MADD). BMW wants to do their part to try to decrease the number of drunk drivers on the road. BMW takes a serious tone with this ad; a change from their usual ads that strictly showcase their cars. This advertisement from BMW uses rhetorical appeals such as, emotional appeal, logical appeal, and ethical appeal, to persuade against drinking and driving.

The ad catches the viewer’s attention instantaneously with a vivid picture of a person with a prosthetic leg and the words, “Don’t Drink and Drive.” (Fig 1) BMW plays off the idea that the amputee will catch and keep the viewer’s attention. The ad uses emotional appeals by making the viewer see the consequences of driving under the influence. A car accident where someone is seriously injured, like the person in the ad, invokes many emotions. Most of the viewers cannot say that this scenario could never happen to them because it could. Think about all the people that travel on the roads each day; whether they are the passenger or the driver they can still be involved in a drunk driving crash. The point is, drunk drivers affect much more than just themselves. The enormous target audience is a strength of this ad. Also, BMW does a great job of picking colors that appeal to the viewer’s emotions. The background colors are soft and plain to really draw the attention to the black prostatic leg. It is also interesting that they chose a person with only one prosthetic leg rather than two. Again, they did this to make the prosthetic leg stand out. I also believe they want to show how fast a person’s life can change when being involved in a drunk driving crash.

After the viewer sees the ad, they are hooked. Next, they read the text to find out what the message is. The ad says, “Spare parts for humans are not as original as those for cars. Don’t Drink and Drive.” (Fig 1) This statement uses a logical appeal by saying that human limbs are not as easy to replace as a part on a car. Most people in this world know, and agree, that drinking and driving is dangerous and should be avoided. BMW puts this statement out knowing that everyone will agree with it. This creates a sense of teamwork with the audience to fight against a common problem. The design of this ad is also simple and logical with the picture on the left and words on the right. Wisely, BMW did not try to do anything glamorous or fancy in this ad. By putting out this ad BMW is conveying that they are a company that cares about the people, and they are doing their part to prevent drunk driving. This ad indirectly tries to sell cars by showing the consumer that BMW is a trustworthy and caring company that wants to keep the population safe. Another thing the viewer recognizes right away is the logo. This induces a sense of trust from the viewer.

The famous BMW logo puts credibility in this ad. BMW is a German company that was founded in 1916 (BMW Group). The fact that BMW has been around for more than one hundred years is all the credit this ad needs. BMW is using their credibility in a good way by trying to prevent drunk driving. In 2011, BMW also started an ad campaign to combat the problem of texting and driving (Boeriu). With these types of ad campaigns, BMW shows that they do not only focus on creating better cars and increasing sales; they also focus on creating a better society where people are safer on the roads. In turn, these ads have pushed BMW to have record sales for the past five years (BMW Group).

With the perfect storm of the latest innovations in the automobile industry, and masterfully crafted advertisements, it is no shock to see BMW’s sales sky rocketing. This shows what using rhetorical appeals in advertisements can do for a company’s success, and in this case help prevent drunk driving. Rhetorical appeals are everywhere – just look around.

Works Cited

1. BMW. Don’t Drink and Drive. N.d. Mad Over Marketing. Web. .
2. ‘BMW Group – Company – History.’ BMW Group. BMW, n.d. Web. 04 Feb. 2017. .
3. ‘BMW Group Achieves Fifth Consecutive Record Sales Year.’ BMW Group. BMW, 1 Nov. 2016. Web. 04 Feb. 2017. .
4. Boeriu, Horatiu. ‘BMW Launches ‘Don’t Text and Drive’ Campaign.’ BMW BLOG. BMW BLOG, 02 June 2011. Web. 04 Feb. 2017. .
5. ‘Drunk Driving Statistics.’ MADD. MADD, 2015. Web. 03 Feb. 2017. .

SWOT Analysis of Mini Cooper

BMW is a huge manufacturing organization known for its automobiles, motorcycles and financial services. As the case study shows, BMW’s market is doing well with its market share all around the world. It has a percentage of its market in America, North America, Germany and in the rest of Europe. With the help of the advertising agencies, BMW became more popular and the unit sales have been increasing for their products yearly.

The main issue that BMW faced was that there has been continuous increases in the total advertising expenditures across the country. The economic environment GDP plays a huge role in the sales of BMW. In the USA , there has been high changes in the percentage of the advertising expenses in comparison to the percentage in the GDP of the country.

SWOT Analysis

Strengths

BMW is has a strong brand name and a strong image with MINI Cooper and Rolls Royce. BMW’s continuous innovation and technology is a key strength to the company or organization as it launched the MINI with its different features. The uniqueness design of the MINI Cooper attracted the customers to purchase the car with its variety of colours and being able to customize it as they wish.

Weaknesses

Advertising is a key factor for success in any organization. The lack of knowledge and lack of financials with dealing with the budget is a weakness in any organization.

Opportunities

As BMW’s market share being around the world , it has the chance to expand more by increasing their innovation and technology in their cars. BMW can look to make new partnerships with other car manufacturers to promote the sale of new brand products. Low price cars with better innovation and technology can be an advantage for both BMW and Mini Cooper.

Threats

Since there are many other car industries around the world such as Mercedes, Audi and Lexus, BMW should look to future needs in the world of development and make sure their sales do not drop drastically. The percentage changes in the advertising expenses in the USA have been high, therefore this might affect BMW’s market sale.

BMW plans on hiring a new advertising agency for the promotion on its new model car MINI through selecting the best advertising agencies considering its cost and benefit analysis.

AS for BMW’s segmentation it classifies a group of customers having certain characteristics. This will be suitable for people who would prefer a small but comfortable car . The people targeted to purchase Mini are willing to spend a lot of money that will reflect their attitude and their status.

By selecting the marketing communication budget using the percentage-of-sales method , BMW can use this method to evaluate the performance of the company and identify key indicators of improvement that the BMW need over time.

Competitive parity method is another method BMW can use as the advertising expenditures of competitors are taken as the guidelines for adjusting their advertising budgets.

Objective and task method is where the specific objectives are defined, tasks required to achieve objectives are determined. Costs of performing task are estimated, then summed to create the promotional budget. Advertising objectives are fixed after intensive research.

Conclusion

Mini Cooper became one of the world’s preferred cars. It drew the attention of people around the world with it being present in so many different countries. Mini Cooper attracted the people around the globe, whether young or old people. By developing their innovative marketing strategies it will boost their sales of Mini.

Comparative Analysis of BMW and Chevrolet Car Companies

The following report features an in depth analysis and comparison of two major automotive giants being Chevrolet and BMW. This report aims to explore in depth the history, practices, management between the two companies, so that we can better understand how two vastly different companies dominate their field.

BMW

BMW is a German motor vehicle manufacturer that was officially found on the 7th of March 1916 and is now one of the leading car manufacturers in the world. Although during establishment of the company they were previously an aircraft engine manufacturer known Bayerische Flugzeugwerke AG and in 1922 they officially changed their name to Bayerische Motoren Werke.

The first product manufactured by BMW was a straight-six aircraft engine called the BMW IIIa, that was used in aero planes during World War 1. After the conclusion of WW1, BMW diversified their product line, now producing motorcycle engines, farm equipment, house hold items and railway breaks. It wasn’t until 1928 where BMW officially became an automobile manufacturer when they purchased Fahrzeugfabrik Eisenach which was a company at the time already producing cars. During the 1930s BMW extended their automobile range to now include bigger luxury cars as well as sports cars

An major factor that affected the rise of BMW was the beginning and outbreak of World War II in 1939. This is so as BMW were now required to manufacture war supplies now to the German army, which was done under the instruction of the German government. Due to BMW manufacturing plants now being under control of the German government and all efforts forced to go to the German army, a massive toll began to take effect on the company. This is so as to keep up with the constant military demand, enormous amounts of materials were used to produce their products as well as to ship them to the front lines. Additionally at the beginning of 1940 BMW how now begun to hire foreign workers within the company, due to minimal amounts of staff present, as most employees had been drafted into the German army. Furthermore in the mid 1940’s BMW resorted to hire prisoners of war as employee numbers continued to diminish, during these times the factories working conditions were the worse they have ever been in the companies history. These working conditions became so bad as efficiency was prioritized above all else and everything ranging from humane working conditions to safety was neglected.

After Nazi Germany was defeated, the Allied forces destroyed and dismantled all of BMW’s factories due to their contribution to Germanys war effort. This act by the allied forces almost put the company out of business for good. During this time BMW reverted to selling kitchen utensils and other form of cooking ware to keep the company afloat. After a few years of selling kitchen ware BMW was able to rebound and produce its first automobile again in 1951, with the car being a considered a luxury vehicle that seated 6 people. This car was titled the 501 and was able to restore BMW’s reputation within the automotive industry.

During the 1960’s and 70’s BMW began to rapidly grow, with expansion of the company now being the primary focus of the company. This expansion came in the form of BMW establishing its own financial subsidiary organization known as BMW Kredit, which allowed them to expand and develop the automotive leasing market which was only just beginning at the time of this implementation.

In 1972 BMW expanded overseas with the construction of their first manufacturing plant in Rosslyn, South Africa, which employed 1700 employees and exclusively produced 53,000 unit of the BMW series 3 model.

By the 1990s the BMW name and brand has become associated with that of wealth and luxury, with their production line now expanding sports cars and sedans. In 1994 BMW finally expanded into the United States, which saw them construcut a manufacturing plant in Spartanburg, South Carolina. During this expansion period BMW also began aquiring other companies, firstly the Rover group in 1994 and in 1998 the Rolls Royce group.

Currently the BMW automotive group has its sights set on further expansion, with the aspects of growth, new technology and profit being their main goal.

Chevrolet

Chevrolet is an American motor vehicle company that was started on November 3 1911 in Detroit by automotive engineer by Louis Chevrolet and William Durant. At the time Durant was head of the Buick automotive company and during this period Louis Chevrolet was hired to drive the cars he produdced in races in order to promote the brand. Chevrolet had their first car produced In 1913, this being the Series C classic Six. Additionally in 1913 Louis Chevrolet’s well known bowtie was adopted into the company logo, which was then implemented as badges on all of their products.

In 1915 Chevrolet owner William Durant acquired the rights to McLaughlin Motor Car Company, which currenly produced Buick cars in Canada. With Durant knowing this he was able to create the Chevrolet Motor Car company of Canada, under a specific franchise agreement of General Motors. Only three year later both Chevrolet and McLaughlin automotive were aquired by General Motors.

In 1916 Chevrolet had a become a major player within the American automotive industry, which then allowed Durant to purchase the majority share within General Motor. After the deal was completed in 1917, Durant became the President of General Motors America and ordered for Chevrolet to be merged into GM as a separate division.

After many years of GM on top of the automotive industry they finally made a break through in 1955, this being a small V8 engine. The design of this engine had a global effect on the automotive industry, with todays engines still using the basis of this design in their current automobiles. Additionally on top of the V8 engine Chevrolet were the first to introduce a fuel injected motor into their cars, which further propelled the success of the business with one in every ten cars being sold in 1963 being a Chevrolet.

Since 2010 Chevrolet has been operating in over 140 countries and set a record in global sales for over 4.76 million vehicles sold world wide. Although the US is the primary distributor of vehicles, Brazil and China follow close for second and third.

In 2010 GM began to research and develop the production of a Hybrid Plug in Chevrolet, which came to be known as the Opel/Vauxhall. This car design received multiple awards being car of the year in 2012 and was the best selling electric car in 2012 with 31,400 units sold.

The Major Environmental Factors Affecting Both Chevrolet and BMW

In the past decade society have become more knowledgeable and aware of factors that impact our environment, we find ourselves being more conscious of the choices we make in our everyday lives and how we can preserve our eco system in the most efficient way possible. Global companies have now marketed towards this move, increasing their involvement and providing solutions to contribute to creating a more sustainable environment. BMW and Chevrolet are two internationally renowned companies that have recognised the importance of sustainability. Companies like BMW and Chevrolet share partnerships with various campaigns that help minimise wast production and carbon emissions.

Managing Change and Innovation

For companies such as BMW and Chevrolet we need to look at what influences have and will make the most change in terms of design and revolution of their products. In the scope of this report we will specifically outline and discuss the influences of the consumer market upon the shaping of future electric vehicles, while also comparing strategies of the companies. In turn this should demonstrate how BMW and Chevrolet differ in managing change and innovation.

As one of the most predominant car manufacturing companies in European and overseas markets BMW has been attempting to widen their range of electric vehicles. From this they are attempting to hopefully lower production of all petrol vehicles and make way for more ecologically friendly substitutes. According to an article by ‘The Driven’ BMW announced it would be increasing production for ’25 new plug-in electric cars” to reach their new deadline of 2023 rather than the previously mentioned 2025.

Unfortunately, according to BMW executive Klaus Frölich European market customers are showing minimal interest in purely electric cars and believes that sales will not increase as a result of elevated production. To counteract this issue Frölich states that big offers and incentives will be required to sell these cars, although he is not optimistic on the capability of these enticements. In terms of marketing all electric cars it’s believed concentrating on regions such as China and California are the best option for retailing these vehicles as they display much popularity in these parts of the world.

Another issue that has befallen not just BMW but other car makers within Europe is the unwillingness to increase the production and sales of “cleaner cars” as to retain earnings from there much less eco-friendly alternatives. These highly profitable SUVs have given negative incentive to manufacturers of these cars to post pone generation of all electric vehicles just to keep shareholders content. However due to the greater demand for stricter legislation and taxation in Europe by the year 2021 car makers will pay substantial fines if certain fuel emission standards are not met. This enticement will ultimately force companies such as BMW to rethink their manufacturing and marketing strategies for new pure electric cars.

Chevrolet under the parent company General Motors (GM) has observed the market and realised that there are significant underlying issues with many all electric vehicles. Up until recently electric vehicles have been considered luxury items especially when you look at companies such as Tesla and how expensive their cars are, but this isn’t the only issue plaguing car manufacturers. It was stated by GM that they “currently lose money selling electric cars” alluding to the unprofitability of all electric vehicles. To counterbalance this GM have discussed making cheaper and more affordable cars but also putting resources into new and more efficient battery technology while attempting to reduce cost overalls. Batteries will however need to be produced at less than 100 US dollars per kilowatt hour just to remain profitable but GM expresses that they are on their way to meet this goal.

Chevrolet has also recently discussed production of an all-electric utility vehicle marketed towards larger families who need cars bigger than the usual small sedan. Although it has not been explicitly stated Chevrolet has in fact foreseen the eventual demand in larger electric cars for the general public and through this they will be able to fill that space within the market. Ideas such as this have put Chevrolet higher on the ladder in terms of innovating electric vehicles for the average person.

Recommendations for Improving Their Practices

• Large car manufacturers are trying better to be more sustainable.
• They have the resources to do so while influencing legislation.
• Put more research into better batteries
• Help improve infrastructure for charging points.
• Make electric cars more affordable.

References

1. Schmidt, B. (2019). BMW unveils new electric vehicles, says Europeans don’t want them | The Driven. [online] The Driven. Available at: https://thedriven.io/2019/07/01/bmw-unveils-new-electric-vehicles-says-europeans-dont-want-them/ [Accessed 19 Oct. 2019].
2. Welch, D. and Bloomberg (2019). GM Is Planning Electric Cars That Won’t Give Buyers Sticker Shock, General Motors President Says. [online] Fortune. Available at: https://fortune.com/2019/06/05/gm-electric-cars/ [Accessed 21 Aug. 2019].
3. Lambert, F. (2019). GM unveils Chevrolet Menlo EV electric car – a Bolt EV utility vehicle – Electrek. [online] Electrek. Available at: https://electrek.co/2019/08/14/gm-chevrolet-menlo-ev-electric-bolt-euv/ [Accessed 19 Aug. 2019].
4. Wikipedia. 2019. History of BMW – Wikipedia. [ONLINE] Available at: https://en.wikipedia.org/wiki/History_of_BMW. [Accessed 26 August 2019].
5. History of the BMW. 2019. History of the BMW. [ONLINE] Available at: https://www.carcovers.com/resources/history-of-bmw/. [Accessed 25 September 2019].
6. media.gm.com. 2019
7. CHEVROLET – A BRIEF HISTORY. [ONLINE] Available at: http://www.gmplantnews.com/media/za/en/gm/news.detail.html/content/Pages/news/za/en/2010/Chevrolet/07_22_chevrolet_brief_history.htm. [Accessed 25 September 2019].
8. Wikipedia. 2019. Chevrolet – Wikipedia. [ONLINE] Available at: https://en.wikipedia.org/wiki/Chevrolet. [Accessed 25 September 2019].

BMW’s Brand Philosophy and Corporate Culture

Controlling is a management function that control the performance of a company and process of carry out the plan that have been set. It recognizes the leeway between the plan that have been set and the real outcome. After that, it will make the correction to the deviations and also make sure the company is going on the achievement of its goals (Satyendra, 2015).

BMW’s brand philosophy, only through continuous innovation, can enable the company to maintain a strong life and continuous freshness. As the first brand, BMW definitely needs the first brand in terms of styling, material selection and quality, and needs to be constantly updated (Martina, 2017).

VPS is a value-added production system and is BMW’s main production system designed to create value (PSP Specialist, 2019). BMW VPS expert team completed a number of VPS production practices. In order to repair all quality defects, the BMW Quality Inspector will confirm the status of 100%. Every morning and afternoon, hourly quality meeting, according to BMW quality standards, 30 cars per day in the BMW test environment for road test and rain test.

In fact, in order to improve product quality, BMW VPS systematically cultivated the quality awareness of its employees. Next, the checking process include the vehicle conducts road test and rainwater test in the BMW test environment every day, and conducts a round of regional review every week according to the BMW quality standard to fully guarantee the product quality.

BMW always views corporate social responsibility as an integral part of its sustainability strategy. As an advocate and practitioner of strategic corporate social responsibility, BMW is committed to combining its own resources and core competitive advantages to effectively promote the long-term development of all stakeholders through innovative and sustainable ways operating. Actively participate and create shared value.

Industry 4.0’s highly digital production method, the use of facility 3D printed thumb protection and sunroof adjustment to shorten the development cycle for small batches and custom chemical installations. Frontline employees can get accurate production information and instant messages through smart terminals. The mechanical exoskeleton (without seats) in the assembly shop provides physical support to employees who require extensive physical operations to help employees reduce labor force and increase productivity (Oliver, 2019).

The employee experience day is more about internal employees, because many employees work long hours in the company, but they don’t have the opportunity to drive, or even have no chance to get close to the car, so we did the employee experience day. For example, everyone can made an appointment on the reservation platform (when we were doing BMW 7 series activities), there will be BMW 7 series of handlebars staff to send home, so that employees can better understand the brand power.

Brand Audit of BMW: Historical Overview and Background

Brand Audit – BMW

• Historical overview and background
• Parent company background
• Existing brands
• History of chosen brand
• Any changes in positioning/target market
• Competitors
• Existing brand extensions (if any)

The birth of BMW can be traced back to Karl Rapp and Gustav Otto. Their respective companies; engine maker Rapp Motorenwerke and aircraft manufacturer Flugmaschinenfabrik Gustav Otto, gave rise to Bayerische Motoren Werke. In 1923, BMW began its first metamorphosis when it expanded from manufacturing airplane engines to motorcycles. This was an influential development for the company, as prior to the transition, BMW had only produced engines as a standalone part. Now, they were manufacturing an entire vehicle. They announced that their first motorcycle would be called the R32. The design was considered to be so efficient that the original 1923 concept is still used to this day in modern day BMW motorcycles.

Innovative, high-quality products made a name for BMW as swiftly as its top-class performances in the motor sport arena. In 1972, the company launched their newest BMW Motorsport subsidiary. BMW Motorsport was known for its top of the line standards and began to gain recognition for the power and quality of its vehicles. With its new found popularity, BMW changed the direction of the company and began manufacturing sports cars for the common man. Following the wild success of the BMW Motorsport subsidiary, new lineups such as the BMW Mountains, Yachtsport, and Golfsport began to introduce high-quality performance based vehicles to the market. Over the decades, the name BMW became synonymous with luxury. With its lines of sedans and sports cars, BMW became one of the great cornerstones of the automobile industry. By producing a differing range of products in the same product class, BMW is able to appeal specifically to different segments of the market depending on the customer’s needs and wants. BMW has a general target market of affluent men and women between 25-50.

Along with Mercedes-Benz and Audi, BMW is considered one of the German big three manufacturers of luxury automobiles in the world. It’s market share expanded following the acquisition of the British-based Rover Group in 1994. The Rover Group is best known for their sports vehicles like the Mini, Mg, and Land Rover. Initially, BMW had big plans involving the Rover Group, but they eventually sold the group in 2000, keeping the Mini model for their own purposes. BMW’s hunger for acquiring other automobile manufacturers didn’t end there. In 1998, BMW purchased the Rolls-Royce group. Despite facing uncertainty for the near future, BMW sales have gone up this year. Sales have increased by 0.8 percent overall, worldwide, adding up to over 1.25 million cars delivered. In full year 2018, the BMW Group achieved its eighth consecutive annual sales record with a total of 2,490,664 BMW, MINI and Rolls-Royce delivered around the world. China was by far the largest country market for BMW in 2018 followed by the USA and Germany.

• Brand inventory (positioning)
• Brand elements
• Brand associations
• Positioning strategy (POP/POD)
• Target market
• Existing campaigns

BMW has developed a brand platform of high-level awareness and familiarity with strong and favourable brand associations. They’ve maintained this position following the introduction of their ‘Ultimate Driving Machine’ Slogan. In order to keep its advertising fresh, BMW integrated new taglines, such as; ‘Sheer Driving Pleasure’ and ‘Designed for Driving Pleasure’ in their advertisements. Although the new slogans still retained the spirit of emphasising the emotional aspects associated with the job of driving a BMW, consumers preferred the original slogan. To visually illustrate this philosophy, BMW’s logo is consistently presented on all their products, making it easier for consumers to recognise. Its iconic blue and white quarters are a representation of the State of Bavaria’s official colours.

Traditionally, car manufacturers have tried to measure their brands across a large number of image attributes, hoping to develop additional insights about brand differentiation. Such associations are a set of remembered qualities that help communicate information to the consumer. However, consumer perceptions of a brand’s reputation are generally consistent across different measures of value. For example, consumers believe that manufacturers whose car lines have a reputation for luxury and prestige tend to produce cars that excel in many other areas, such as ride, handling, safety, and reliability.

Deciding on a positioning requires determining the target market and the nature of competition and the optimal points-of-parity and points-of-difference brand associations. In other words, marketers need to know who the target consumer is, who the main competitors are, how the brand is similar to these competitors, and how the brand is different from them. In order to legitimately compete in the high-end cars market, BMW must have associations in common with their competitors. These Points of Parity are elements that are considered mandatory for a brand to be considered a legitimate competitor in its specific category. Indeed, to compete against other premium brands such as Audi, BMW have to maintain a reputation for the quality of their cars: high quality build, finishing, and design. However, brands needs to develop distinctive attributes or benefits (Points of Difference), so as to attract customers and have a competitive advantage over competitors. When BMW first made a strong competitive push into the U.S. market in the early 1980’s, it positioned the brand as being the only automobile that offered both luxury and performance. At that time, U.S. luxury cars like Cadillac were seen by many as lacking performance, and U.S. performance cars like the Chevy Corvette were seen as lacking luxury.

To begin with, BMW vehicles sell well to consumers who have high standards for quality, luxury, and performance because BMW builds those attributes into its automobiles. They implemented a different marketing mix to sell cars to different socioeconomic segments, aggressively emphasizing premium segments.

· Consumer perceptions

The survey was given to 12 people. Out of these 12 people, 8 were male and 4 were female. The survey was given to people of similar age groups but different professions. The process used to capture the results left us unable to directly determine which responses came from the 12 respondents in the 16 to 25 year old age range. With that capability we could have better identified which segment of the market was responding positively or negatively to a question. The subheadings below will highlight and reflect on the results found within each area from the survey; which is provided in the Appendix.

· Brand awareness/usage

This section was focused on asking questions that determined how many customers actually recognised BMW as a brand. Close ended questions that required a direct response about if the individual was aware of any recent BMW advertisements was asked. They were also asked an aided awareness question to note which competitors were familiar. These questions provide key data points in the development of an overall brand or strategy. For example, a question was asked to gain an insight into which features customers relate BMW with. 95% strongly agreed that it was a luxury brand, however 75% disagreed that it was good value for money. This could be attributed to the low age group of the respondents, especially because the level of disposable income amongst this age group would be significantly low.

· Brand performance

When questioning consumers about brand performance, tangible aspects of the brand need to be acknowledged in order to determine if the customer’s functional needs are met by the product. While exceling in areas concerning the visual appeal of the model of the car, respondents were not convinced BMWs are suitable for a family. This links back to the question asked in regards to brand awareness, and respondents were unable to identify different makes and models of BMW.

· Brand imagery

The questions in this section were focused on gaining an understanding of the tangible or intangible elements that consumers associate with BMW. It can come from any of the five senses, and can be unique to each individual. The below graph dictates the responses to each question asked about words associated with BMW.

The positioning concept indicates how the management wants buyers to perceive the company’s brand (Cravens and Piercy, 2009). In this regard BMW has positioned the brand as the lone automobile that offers both luxury and performance. Its German legacy and reliance on designs, along with a clever marketing strategy, BMW has been able to achieve a point of difference on performance and a point of parity on luxury.

· Brand judgements/attitudes

This section emphasises customer’s personal evaluations and opinions of BMW. Judgements develop from performance and imagery associations and are focused on personal opinions and evaluations like perceived quality of the brand, credibility, consideration and superiority. Feelings, on the other hand, are the emotional responses and reactions to the brand like social approval, self-respect, excitement, fun. It is vital to get a legitimate positive reaction in the buyer mind as far as judgment and emotions.

· Brand resonance

Brand resonance is characterised by the strong connections customers have with BMW. Brands with strong resonance will benefit from increased customer loyalty, and decreased vulnerability to competitive marketing actions. The questions were tailored to determine the extent of brand loyalty possessed by the respondents. However, the automobile market in general has very low customer loyalty, even when satisfaction with a particular brand is high! This explains why that although 75% of respondents answered Yes to letting others know they own a BMW, only 15% answered ‘yes’ to feeling a connection with BMW as a company.

· Main findings

• reasons for gap (desired vs existing positioning),
• what are the main drivers of equity

BMW’s premium price is meant to guarantee the consumer a high level of quality engineering, which can display status or success in a visible manner for social approval. The car’s driving ability combined with its looks and advertised image distinguishes BMW from its competition, as reaffirmed by the results from the survey. It is positioned to attract consumers interested in more than an ordinary car for their money. The survey results indicate BMW to be strongly positioned. BMW produces models targeting the singles market as well as models for families. The survey data indicates the attributes relating to associations with the singles market to be far stronger than those focused on the family market.

Bibliography

1. Bekker, H. 2019. ‘2018 Global: BMW, Mini & Rolls Royce Worldwide sales’ Viewed 28 Oct 2019. < https://www.best-selling-cars.com/brands/2018-global-bmw-mini-rolls-royce-worldwide-sales/>
2. Chin, C. 2019. ‘This is what the BMW logo really means’. Viewed 29 Oct 2019. < https://www.thedrive.com/news/29376/this-is-what-the-bmw-logo-really-means-and-no-its-not-an-airplane-propeller>
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External Environment of BMW and Task Environment Factors: Analytical Essay

1.1 Industry of BMW

BMW is a one of the leading luxury carmakers in the European automobile industry. In this automobile industry. BMW faces huge competition from its competitors who are Audi, Honda, Volkswagen, Porsche and etc. BMW Group also provides premium financial and mobility services with the help of its three brands, BMW, MINI and Rolls-Royce. As a global company, the BMW Group operates 30 production and assembly facilities in 14 countries and has a global sales network in more than 140 countries. In the era of modern, BMW is now focusing on the digitalisation of production. Digitalisation in production, also referred to as Industry 4.0, opens up new opportunities for the entire BMW Group production system – enabling fulfilment of individual customer wishes and enhancing the flexibility and quality of production processes. Modernisation also benefits our associates over the long term.

1.2 History, Achievement & Future of BMW

Bavarian Motor Works or known as BMW is a German automobile manufacturer founded in March 1916 by Camillo Castiglioni, Franz Josef Popp and Karl Rapp . BMW is headquartered in Munich, Germany.BMW is one of the top industries in the world for multi kind finest motor manufacturers . BMW is a German motor, motorbike and appliance manufacturers that have been widely trade since 1969. In 1928, the first car of BMW was built under license. The company’s slogan in English is “The Ultimate Driving Machine” and Sheer Driving Pleasure”. The original German slogan is “fraud am Fahren,” which translates to “joy in Driving” in English. According to the Chairman of Board of Management of BMW AG, Harald Krüger , their vision is that “ To be the most successful and sustainable premium provider of individual mobility.” and the mission is “ To become the world’s most successful premium manufacturer in the industry.” BMW is known for its performance and luxury vehicles while it is also own and make the tiny product.

In 2018, BMW Group’s global revenue stood at roughly 97.5 billion euros. The German vehicle manufacturer sells vehicles under the BMW, Rolls-Royce, and MINI brands and was among the leading luxury car brands worldwide in 2018. Following the financial disaster of 2008-2009, BMW recovered rather quickly, surpassing pre-crash revenue and the earning before interest and tax (EBIT) by 2010.

As in achievement, in 2018, the BMW Group has achieved its eighth consecutive annual sales record with a total of 2,490,664 (+1.1%) BMW, MINI and Rolls-Royce delivered around the world in 2018. Best-ever figures were achieved by both BMW and Rolls-Royce, while the company’s portfolio of electrified BMW and MINI vehicles grew sales by 38.4% compared with the previous year. This sales result reconfirms the BMW Group’s position as the world’s number one premium automotive manufacturer. BMW can look back on a highly successful 2018 yielding an impressive haul of awards and accolades. Over the course of the past year, vehicles from BMW have managed to win over not just automotive journalists and experts from around the world, but also the readers of motoring magazines, market researchers and IT insiders. What’s more interesting is the the award winners distinguished themselves in areas ranging from product quality and design to technical innovation, intelligent connectivity and sustainability.

With a century of production to their name, the future of automotive design holds interesting prospects for BMW. Customers have shown interests and demanding in electric mobility and other sustainable technologies is creating a complex new chapter in the company’s history. Focus these days is on increased efficiency and decreased carbon footprint in the product lifecycle, including recycled materials, lightweight construction, and the continued development of bivalent hydrogen/gasoline engines. From the innovative IV aircraft engine to the hydrogen-based car of the future, things have certainly come a long way.

2.0 External Environment of BMW

A business organization contains of a group of people or individuals who are targeted towards some common commercial goals. The business organizations operate in an external environment, therefore, the external environmental factors impact on the operations of the business organizations. However, these external factors cannot be controlled by the business organizations. They need to adapt themselves according to the external environment. In addition to it, when beginning a new business venture in a different location, the organization needs to identify the external factors and its impact on the business operations. If the external factors do not align with the goals or the vision of the organization, the business venture can remain unfruitful (Thompson & Martin, 2010). External environment analysis is a strategic tool which assists the organization in forming strategies to curb the market competition. In this regard, the current report will examine the external environment of BMW.

2.1 Mega Environment

The term ‘mega environment’ refers to the external environment that reflects conditions and trends in the society that an organisation operates within. There are five major elements to the mega environment which is technological, economic, legal-political, sociocultural, environmental and international. These elements are often external to the span of control of the organisation and as such are often unable to be influenced directly (Bartol et al, 2003). In this report, 2 out of the 5 major elements will be discussed, that is the environmental and sociocultural factor.

2.2 Environmental Factor

With increasing awareness of global phenomenon, consumers worry about the health of the planet and two major impactful problems are the CO2 emissions and fuel-usage by cars. This affects the change in demand for a different product line and new direction of products. In BMW’s existing markets, environmental concern plays an important role of living up to emission standards. BMW observed the changing trend of consumer’s choice and support for “green” products, and therefore responded by increasing its focus on manufacturing more fuel-efficient automobiles. According to Walsh (2012), BMW achieved its lead on the Dow Jones sustainability index and is working hard to stay ahead of sustainability in creating innovative solutions.

How environmental factor influences the decision making and operations of BMW? BMW decides to lower the emissions from vehicle use with efficiency technologies and solutions for pollutant reduction. In their conventional drive vehicles, they currently achieve the most effective impact on lowering CO2 and pollutant emissions through their efficiency technologies and through specific solutions for pollutant reduction. A reduction in local emissions of nitrogen oxide (NOx) in particular is needed to improve urban air quality. All diesel models of the BMW Group have been fitted with a highly effective combination of a NOx storage catalytic converter (NSC) and a SCR system (SCR, Selective Catalytic Reduction) with urea injection (AdBlue) since mid-2018 (except for MINI 3-door cars, 5-door cars and convertible models). The larger MINI diesel models also use these technologies. In terms of climate protection, reducing global CO2 emissions is imperative. Since 2007, their Efficient Dynamics projects have helped them integrate efficiency technologies in their vehicles, in accordance with the specific requirements of individual models, engines and the respective markets.

Moreover, BMW has attached into the development and distribution of hybrid car models. These cars use less fuel than the non-hybrid models. On top of this, the BMW Group is also introducing more hybrid and electric model options to the audiences. From the very beginning of the BMW I series project, they have pursued the goal of reducing the emissions of CO2 and other pollutants throughout the entire life cycle of our electrified vehicles. To this end, they rely on light construction, renewable resources and particularly resource-efficient and environmentally friendly production processes.

2.3 Sociocultural Factor

The sociocultural element focuses on the attitudes, norms, values, beliefs and behaviours of the demographic region in which an organisation operates (Bartol et al, 2003). The culture in which the countries they operate can impact on the business operations of the company. The culture of the geographical location affects the preference and the choice of the consumers. The culture of the country also impacts on the attitude towards working, education, training and ethics of the people (Thompson & Martin, 2010). All countries have culture that are unique to the country.

This means BMW Group must adjust products and marketing to fit the people it sells to. This requires adaptation to each market, using a one-size fit all approach won’t yield any results. BMW has manufacturing companies all over the world including United States of America, China, India, and Austria. The company chooses the location based on the heavy research and development. This requires not only understanding who the consumers are and why they buy, but also the point of view from political and economic landscape.

How BMW manages the changes lead by this sociocultural factor? BMW Group decided they need a platform to understand the cultural difference of the world and that platform is through social media.BMW has social media pages on most of the major platforms. On Facebook it has over 13 million followers and posts daily updates and entertaining images to provoke interest from followers. Twitter is where the company often responds to customer inquiries, suggestion, and complaints. Although it doesn’t seem to have a dedicated customer service section to help people on a consistent time, but someone do respond to followers when necessary. BMW needed to attract their customers by showing more of their dazzling pictures of their products and this is where Instagram comes in.Instagram is an easy choice for BMW since Instagram is none other than a photo and video sharing social networking. BMW boasts nearly 20 million followers and a feed of bright photos of their cars in various luxury locations. It’s a simple way to showcase BMW’s grand lifestyle to the younger audiences that frequent Instagram. However, due to the cultural difference, BMW will now be able to understand the preference and choice of the customers through social media.

3.0 Task Environment Factors

Task environment of an organization is the environment which directly affects the organization from reaching business goals. For example of task environment are suppliers, distributors, customers, stock markets and competitors which are directly affecting the organization from achieving its goals.

3.1 Competitors

There are many competitors in the automobile industry that are competing with BMW. For example, Audi, Mercedes Benz, Volkswagen and more. Competitions between BMW and the other companies are very fierce which will cause a lot of problems in terms of customers raiding. This factor could dictate their organizations strategies as it is very hard to maintain their customers from other companies, and this has caused them cutting the prices for their products. BMW once has cut prices for approximately 4,500 spare parts used in BMW by 10 to 30 percent. BMW has also been making efforts to increase efficiency and slash turnover costs like purchasing more locally made spare parts and expanding its logistics network to cut prices of the vehicles. This is also to ensure that the car owners do not need to pay a very costly maintenance fees and feels that they are benefiting from it.

These changes can bring some advantages for BMW group. One of the major advantages is relevance to market. They have maintained to be a brand that is hard to match through effective designing and modeling of the vehicles. They have also ensured that their vehicles have a diversified portfolio including luxury Sedans, Sport cars and SUVs. The manner in which the likes of BMW 3 series, BMW 5 series, BMW 7 series, BMW X3, BMW X5 and BMW X6 have been availed in the market, has always ensured that the consumers are challenged to advance with each model. This way, BMW has maintained its relevance in the market.

The other advantage is their ability to satisfy elite. In the perception of people in the market, BMW are very expensive and only belongs to rich and affluent owners. Most of the people believed or viewed that owning a BMW car is an achievement or a social status. This way though, those who can afford the cars will have a demand for every BMW model was released to the market because they will be thinking that buying a new released BMW model is like having a higher status over people who cannot afford it. And those who cannot afford it will have to work hard until they can.

3.2 Suppliers

Suppliers is one of the most important factors in a company’s success. There were many suppliers that had made partner with BMW like Brembo which supplies brake calipers, Peiker Acustic GmbH & Co who supply high speed mobile internet for cars which also made BMW to became the first ever automaker vehicles and other more industry that supply important parts that made BMW. BMW industry is very stable in their stock supplying as they always strengthen their relationship with their suppliers. The main part of having suppliers is because suppliers provide services and maintenance agreement on the item or parts they provide. Suppliers also providing something that the industry does not or cannot process in house like printed marketing material.

By having a strong relationship with suppliers can bring some advantages to the industry. The first advantage is cost reduced, usually when setting up deals with new suppliers will be very costly for the item the industry request. But with a long term of stable mutual beneficial relationship with the suppliers BMW industry can get better offers from the suppliers which able to reduce the cost on vehicles making. That’s not all, having a strong relationship with suppliers also reduced the availability problems and quality issues for the item suppliers were providing which will also give a better product for the customers.

As the relationship with the suppliers develops, the communication between BMW industry with the suppliers will be improved as well. The second advantage is the increase in efficiency. When the suppliers get more understanding on which industry that they are doing business with, they can make a better schedule on item delivery. This will make BMW industry to get their needs more effectively and reduce in supply delaying. This will allow the flow of operations in BMW industry to improve greatly and able to deliver the product to customers efficiently.

4.0 Conclusion

The external environmental analysis can let company understanding the sources of competitive pressure and the impact of these pressures. BMW industry becomes one of the best industries in the world by solving difficulties and decision making. BMW Group always focuses on the future and develops innovative ideas and solution, so they create a project which is ‘THE NEXT 100 YEARS’. BMW aims to make this fascinating driving experience even more intense in the future. The driver is in constant communication with the vehicle in an intuitive and natural way. BMW Group is developing more intelligent cars such as intelligent personal assistant, it can be controlled by voice command and supports you wherever you go.

5.0 References

1. Competitive Advantage Analysis. (2019). Competitive Advantages of BMW – Competitive Advantage Analysis. [online] Available at: https://www.competitiveadvantageanalysis.com/competitive-advantages-of-bmw/ [Accessed 29 Jun. 2019].
2. (Quek and Hwee, 2015)Building & Sustaining Strategy: Bayerische Motoren Werke (BMW)-Automotive Industry.[Online]. Available from: https://www.tmc.edu.sg/wp-content/uploads/2015/09/File-6-BSS-BMW-eqch.pdf. [Accessed: 4thJuly 2019] .
3. (Blunck, 2016)Germany BMW’s Sustainability Strategy of Evolution and Revolution towards a Circular Economy Chapter 6 Germany BMW’s Sustainability Strategy of Evolution and Revolution towards a Circular Economy.[Online]. (September). Available from: http://www.eria.org/RPR_FY2014_No.44_Chapter_6.pdf. [Accessed: 22ndJune 2019].
4. (BMW Group Sustainable Value Report 2018, 2018)[Online]. Available from: https://www.bmwgroup.com/content/dam/bmw-group-websites/bmwgroup_com/responsibility/downloads/en/2019/2019-BMW-Group-SVR-2018-Englisch.pdf. [Accessed: 22ndJune 2019].
5. (Frue, 2019)PESTLE Analysis of BMW: Shaping the automotive industry. [Online]. (March).
6. Available from: https://pestleanalysis.com/pestle-analysis-of-bmw/. [Accessed: 28thJune 2019].
7. (Allison, no date)External Environment of BMW Organization – MyAssignmenthelp.com. [Online]. Available from: https://myassignmenthelp.com/free-samples/external-environment-of-bmw-organization. [Accessed: 30thJune 2019].
8. The mega and task environments are external influencers to an organisation.[Online]. (December). Available from: https://paperap.com/paper-on-mega-task-environments-external-influencers-organisation/[Accessed: 3rdJuly 2019].
9. UKEssays. November 2018. Introduction Of Bmw Company Marketing Essay. [Online]. Available from: https://www.ukessays.com/essays/marketing/introduction-of-bmw-company-marketing-essay.php?vref=1. [Accessed: 2ndJuly 2019].
10. (Business Segments, no date).[Online]. Available from: https://www.bmwgroup.com/en/company/business-segments.html. [Accessed: 27thJune 2019].
11. (BMW Group – Innovation – Industry 4.0, no date). [Online]. Available from: https://www.bmwgroup.com/en/innovation/innovation%20-%20company/industrie-4-0.html. [Accessed: 27thJune 2019 ] .
12. (Introduction Of Bmw Company Marketing Essay, 2018). [Online]. Available from: https://www.ukessays.com/essays/marketing/introduction-of-bmw-company-marketing-essay.php. [Accessed: 28thJune 2019] .
13. (BMW Brief History – MWF car news, 2016).[Online]. Available from: http://mentalwardfilm.com/bmw-brief-history/. [Accessed: 30thJune 2019].
14. (Wagner.I, 2019).Global EBIT of BMW Group 2018 | Statista. [Online]. Available from: https://www.statista.com/statistics/264344/global-ebit-of-bmw-group-since-2006/. [Accessed: 30thJune 2019].

Changes BMW Undergone in The Process of Shifting from Engine Based Cars to Electric Cars: Analytical Essay

1. Introduction

Bayerische Motoren Werke AG (BMW Group), the BMW tagline is “designed for driving pleasure” which is very popular among people. The company was founded on March 7th, 1916. Founded by FRANZ JOSEP POPP, KARL RAPP and CAMILLO CASTIGLIONE. The company headquarters are in Munich Germany. The slogans are “SHEER DRIVING PLEASURE” and “THE NEXT 100 YEARS”.

• Name

Bayerische Motoren Werke AG (BMW Group)

• Founded

March 7, 1916

• Logo

[image: ]

• Industries served

Automotive

Motorcycles

Financial Services

• Geographic areas served

Worldwide (over 150 countries)

• Headquarters

Munich, Bavaria, Germany

• Current CEO

Harald Krüger ( from May 13 2015)

• Revenue (Euros)

€97.48 billion(2018) , €98.678 billion (2017) 4.78% increase over €94.163 billion (2016)

• Profit (Euros)

€9.88 billion (2017).

• Employees

134 682 (2018)

• Main Competitors

Chrysler Group LLC, Daimler AG, Ford Motor Company, General Motors Company, Honda Motor Company, Hyundai Motor Company, Nissan Motor Company, Tata Motors, Ltd., Toyota Motor Corporation, Volkswagen AG and many other automotive companies.

All the information above mentioned is taken from BMW official 2018 report and BMW site.

In this present generation competitive world, change or adapting to the current trend is a very crucial factor for the organization success. Now in automobile industries the electric vehicle are the latest trend and all the companies are trying to make automobiles powered by electricity, BMW has announced that they are going to make electric vehicles by 2025. Recently in Munich 21st March 2018 the CEO of BMW Harald Krüger has show cased the BMW i3 series electric powered vehicle as a glimpse that they are going to release the car in 2021. I want to discuss what change that the BMW has adapted in their whole organization to convert from fuel powered car manufactures to electric powered vehicle manufactures and autonomous driving, because the tesla is leading manufacture of electric vehicle so BMW also trying to be in the trend. The electric vehicle and autonomous driving is a disruptive technology where all the automobile companies are racing to achieve it with 100 percent efficiency. (Bloomberg.com, 2019) (Forbes.com, 2019)

Macro trends

The electric vehicle came in to light because of the hike oil prices and fuel resources will be consumed totally. Second factor is carbon monoxide or emission gas from the car which is very harmful and main cause for the greenhouse effect, and the third factor is innovation every company is trying to create a disruptive technology in order to gain a huge competitive advantage over their competitors.

2. Porter’s five forces for the internal analysis

The threat of substitute products

Threat of substitute product is high for BMW because BMW produces till now engine-based car models but recently all the competitors are transforming to produce electric or battery-powered cars. BMW has launched its i8 series hybrid car which has both fuel power and battery powered in the June 2014, BMW first hybrid vehicle. Automobiles can be easily replaced by motorcycles and bicycle’s, but BMW has its own motorrad(bikes). Public transport is also a huge substitute for BMW cars. (porter Analysis, 2019)

The threat of new entrants

Basically, the BMW is a high-end luxury car manufacturer, so it targets rich people, so for the new entrants is not that easy to give competition to BMW. Since tesla came in to the game it is giving competition to the whole automobile industry, but BMW has a very high brand power and customers are very loyal.

For new entrants huge capital, skilled professional workers are required and face many legal issues to launch. So the threat of new entrants is low for BMW. (porter Analysis, 2019)

Power of competitors

The power of competitors is very high because there are many companies like VW, TESLA, TOYOTA etc, are competing. So BMW invests a lot of money in research and development department (R&D) to create new innovations and technology. Actually, the electric cars are the new age of innovation where the fuel-based cars are completely replaced and now all the competitors are trying to achieve the competitive advantage. (porter Analysis, 2019)

Bargaining power of customer

The bargaining power of customer is very high because customers can easily shift and have lot of options in the market. The BMW should always pay attention to the customer needs and what they are expecting. BMW should always treat their customer loyalty in order to get the competitive edge. (porter Analysis, 2019)

Bargaining power of supplier

The bargaining power of supplier is low because BMW can easily replace their supplier as there a lot of options available. Now the BMW has signed a 1 billion worth contract with Samsung SDI for car batteries to keep up with the competitors (according to electrek.co). In this particular case the bargaining power of supplier can be high. (Lambert and Lambert, 2019)

3. PESTLE analysis

Political factor

• Brexit can be a dis advantage to BMW because U K government may impose tax on BMW cars as it is a German manufacturer.
• If the government in another country changes where the BMW operates it can cause risk to the investment.
• The import and export tax rates will effect BMW directly in their revenue.

Economic factor

BMW should make cheaper cars in order to capture the whole market as BMW makes only luxury cars and targets the rich people, but it should reach to the middle segment also.

The global economy fluctuation will effect the BMW in performance, valuation and profits. The tariffs will affect BMW directly because BMW has operations in more than 150 countries. (Frue, 2019)

Social factor

BMW operates in more than 150 countries, each country has its own culture the culture difference between countries is high. Bmw must try to adapt to the customers around the globe. Bmw have a lot of facebook pages (over 13 million pages), Instagram and twitter. Although social media integration is a key role to attract customers and know their preferences, BMW officials releases news or updates or responds to the followers in twitter but responds to the main issues it is a positive point for BMW. (Frue, 2019)

Technology factor

In the present competitive world for a company to survive it should be innovative and must be ready to adapt to the change. The adapting to the new technology or disruptive technology is very important for companies to survive. In this case tesla came up with a disruptive technology like manufacturing the electric cars and BMW earlier released a hybrid model now the company has announced that by 2021 all the BMW cars are electric powered, it is good for BMW to adapt to change and release announcement about the future. (Frue, 2019)

Legal factor

BMW till now has not faced any legal issues because all the law was fully accepted and followed by BMW very strictly. BMW asks the sub companies and suppliers to follow the rules very strictly. (Frue, 2019)

4. Critical success factor

BMW has a very high brand loyalty because of the quality of the product and precision of the work, where the customers have a very good impression on BMW. The readiness to adapt to the change is a very difficult task to global companies like BMW but they have adapted to every change and giving competition to their competitors. BMW invests lot of money in R&D for creating new technology, innovations and strategies to be ahead in the market. The BMW uses STRATEGY NO 1

• Access to technology and customers
• Profitability
• Shaping the future
• Growth

The BMW has increased its sales network by entering in Asian market (INDIA, CHINA). The size of the work force increased globally and expanding. The BMW always thrives to make new innovations which is a very good competitive edge to the company as the bmw has releases new conceptual cars and models every year ex BMW I3 which is a hybrid and latest the BMW new I series car displayed in Munich by the CEO which is going to be released in year 2021.

The external pressures is a very plus point for BMW because the bmw is always ready to adapt to the change and now the BMW has signed a billion dollar contract with Samsung SDI to buy batteries for the electric vehicle and BMW tied up with Volkswagen to launch twenty five lakhs plus battery power station in the whole Europe. These external pressures creating more work force and innovation which helps in the company’s growth. The disruptive technology like tesla has introduced electric vehicle which is a very high competition for BMW and all the other automobile industries, BMW has announced that from 2025 all the cars from bmw will electric powered which will bring a huge competition with tesla and BMW also planning to bring a disruptive technology like fully autonomous diving where it will be huge success to the company and the whole automobile industries. The BMW have some strategic issues like there is a very big organizational structure in the company like the board of the management consist of six highly professional managers and chairman of the board so the pinpoint of a problem in a company is low and it cannot be reached to the top management easily, so the BMW should give power and decision making to the middle management like each individual manager can be able to rectify their own team problem among them and later should be informed to the board. The feedback should be improved as the employers should give feed back to their higher authorities about the operation and performance. The communication among the departments must be improved as now the BMW entering into the electric vehicle field and every department participation is required by keeping them connected. BMW has introduced a new model of connection with other departments by keeping a meeting of all the departments head and the CEO directly interacts with them for every two months. The risk management of BMW is super because BMW takes an open sustainability audit every year where all the employers can see that and the employers can share their thoughts and ideas to the risk management department where each and every feedback is considered and they are presenting prizes or compensation to make the employers to involve much.

5. Organizational resilience

The BMW follows the MTBF mean time before failure to be more resilient. BMW have IT services also in order to face and withstand if any disruptive technology comes in to the market and BMW is trying to build up their customer loyalty which gives BMW to be more resilient. I suggest that BMW should follow some methods to be more resilient like early identification of risk, forecasting the change in the environment, do some risk compressive analysis and use some sustainable management tools. Which help BMW to be more resilient to the change or disruptive technology. As BMW should be more proactive to the change and can be easily adapt to the change

Not only does adaption plays crucial role in resilience but the climate and weather extremes also play an important role (Linnenluecke and Griffiths, 2010). Now a days all the companies are focusing on the economic factors such as competition and technology innovation, well bot one company need to be resilient it should focus and forecast on all factors. This is also called as disaster recovery which offers per disaster strategies to reduce or avoid costly downtime, stop vulnerabilities and to maintain a smooth operation even in the time of unexpected or additional breaches.

The BMW should be resilient in such a way that has to be adaptive to disruptive change and maintain the business operation continually, protect people, assets and overall brand image. (Harvard Business Review, 2019) (Linnenluecke and Griffiths, 2010)

6. Diagnostic model

The suggested diagnostic model for BMW is 7 S frame work. Which was developed by Robert Waterman, Tom Peters, and Julien Phillips in 1980. The 7s framework consist of 7 factors

• Structure
• System
• Style
• Staff
• Skill
• Strategy
• Superordinate Goals

The 7s frame work is more importance on the interconnectedness of all the departments, in this frame work if one department needs to be changed then all the departments are effected by that change which is good for organization. The frame work can be used to increase the performance of the company, forecast the likely effect of future changes in and out of the company, all the departments are aligned and we can also check how good is the proposed strategy with this frame work. (Palmer, Dunford and Buchanan, n.d.)

Structure refers to the Organisational structure. The way the organizations is designed and who should report whom. The structure gives the information about how the departments are divided, how the work flows through the departments. Why I suggested this model to BMW is that it has gone through a lot of change from fuel car to electric car, now the 7s frame (especially strtuture) works help the BMW to know how all the departments coordinate and how does the team player align and organize to the change happened in the company. It also allows to know about the communication gaps between the department, which is very helpful for a global company like BMW. (Mindtools.com, 2019)

System is used to know the daily activities done by the employees and to check weather the job is done in time. In BMW using this frame work they can detect the main system that’s running the company, where are the controls of the company and they can monitor it (the Verizon has made a dash board where all the managers use it know the how work done and any issues inside the company). This system framework is useful to the top-level management of BMW where they can know how the employees are working and did they reach the target and how the employees are reacting to the change. (Mindtools.com, 2019)

Style is the leadership style in the company, In BMW this frame works helps in knowing how effective the leadership is and how their subordinates are reacting like willing to cooperate or compete with the managers. (Mindtools.com, 2019)

Staff this frame work helps BMW to know what position or category is required in the team and are there any gaps in required competencies.

Skills are the abilities of the employees who’s working in the company. This helps BMW in giving training to the employees who are the part of a change and help the employees to be adaptive and professional. (Mindtools.com, 2019)

Strategy is the plan of action used in the company to improve their competitive advantage and goals. BMW should use this frame work to develop a new strategy before adapting the strategy and after the change is adapted also. It helps to know how to achieve the intended goals, the strategy should be built in such a way that it should deal with competitive pressure and how the customer needs or demands are met. The BMW should adjust their strategy with respect to environmental issues. (Mindtools.com, 2019)

Superordinate goals it is the vision of the company and BMW have announced their vision such that by 2025 they will launch all the electric and green cars. (Mindtools.com, 2019)

So for the BMW I suggested this model because it has advantage mentioned in the above and also this 7s frame work is used to self-check with in the companies for the gaps.

7. Conclusion

According to the study I totally recommend BMW to use 7s frame work, BMW should be also ready for the environmental changes also to be more resilient. Adaption is most challenging task for the global company like BMW because it operates more than 150 countries so change cannot be easy until if the middle management is given power to take decisions so that it saves a lot of time to top management. Finally what I believe the most important aspects for the BMW success is their brand power, their relationship with customer and technology & innovation.

8. Bibliography

1. Bloomberg.com. (2019). Bloomberg – Are you a robot? [online] Available at: https://www.bloomberg.com/features/2019-bmw-electric-car-german-engines/ [Accessed 7 May 2019].
2. Frue, K. (2019). PESTLE Analysis of BMW: Shaping the automotive industry. [online] PESTLE Analysis. Available at: https://pestleanalysis.com/pestle-analysis-of-bmw/ [Accessed 7 May 2019].
3. Lambert, F. and Lambert, F. (2019). BMW signs $1 billion battery supply contract to support future EV production. [online] Electrek. Available at: https://electrek.co/2018/06/29/bmw-signs-billion-battery-supply-contract-future-ev-production/ [Accessed 7 May 2019].
4. Porter Analysis. (2019). Porter Five Forces Analysis of BMW|Porter Analysis. [online] Available at: https://www.porteranalysis.com/porter-five-forces-analysis-of-bmw/ [Accessed 7 May 2019].
5. Harvard Business Review. (2019). What Resilience Means, and Why It Matters. [online] Available at: https://hbr.org/2015/01/what-resilience-means-and-why-it-matters [Accessed 7 May 2019].
6. Mindtools.com. (2019). The McKinsey 7-S FrameworkEnsuring That All Parts of Your Organization Work in Harmony. [online] Available at: https://www.mindtools.com/pages/article/newSTR_91.htm [Accessed 7 May 2019].
7. ComputerWeekly.com. (2019). BMW gears up IT resilience with private cloud infrastructure. [online] Available at: https://www.computerweekly.com/news/2240205641/BMW-gears-up-IT-resilience-with-private-cloud-infrastructure [Accessed 7 May 2019].
8. Press.bmwgroup.com. (2019). BMW Group Annual Report 2018. [online] Available at: https://www.press.bmwgroup.com/global/article/detail/T0293372EN/bmw-group-annual-report-2018?language=en [Accessed 7 May 2019].
9. Equitystory.com. (2019). [online] Available at: http://www.equitystory.com/Download/Companies/BMW/Quarterly%20Reports/DE0005190003-Q2-2018-EQ-E-00.pdf [Accessed 7 May 2019].
10. Evarts, E., Contributor, E., Contributor, E., Contributor, J., Editor, B., Contributor, E., Contributor, E. and Editor, B. (2019). BMW plans 12 all-electric models by 2025. [online] Green Car Reports. Available at: https://www2.greencarreports.com/news/1122188_bmw-plans-12-all-electric-models-by-2025 [Accessed 7 May 2019].
11. Bmw.de. (2019). BMW i Modelle: Übersicht Elektroautos | BMW. [online] Available at: https://www.bmw.de/de/neufahrzeuge/bmw-i.html?bmw=sea:59052874027_kwd-299858606523&gclid=CjwKCAjw2cTmBRAVEiwA8YMgzTYNoY9oKiQBZt0Ce29cUoCd6BPb27AJWZd1_ADzYwax6KEqLjexoRoCtjoQAvD_BwE [Accessed 7 May 2019].

Marketing Audit of Bavarian Motor Works (BMW): Analytical Essay

Assessment question:

Analyse marketing audit and its usefulness. Using SWOT framework conduct a basic marketing audit of Nando`s (or any other organization of your choice) analysing its environment, current marketing performance and strategy. (LO2-40%)

The company selected for this project is Bavarian Motor Works, otherwise known as BMW.In this report includes a swot analysis (strengths, weaknesses, opportunities and threats).

BMW is a German multinational company that produces automobiles and motorcycles. The company was founded in 1916 as a manufacturer of aircraft engines, which it produced from 1917 until 1918 and again from 1933 to 1945.

Automobiles are marketed under the brands BMW, Mini and Rolls-Royce, and motorcycles are marketed under the brand BMW Motorrad. In 2015, BMW was the world’s twelfth-largest producer of motor vehicles, with 2,279,503 vehicles produced.

BMW is headquartered in Munich and produces motor vehicles in Germany, Brazil, China, India, South Africa, the United Kingdom, the United States and Mexico. BMW has significant motorsport history, especially in touring cars, Formula 1, sports cars and the Isle of Man TT.

The SWOT analysis framework involves analysing the strengths and weaknesses of the business’s internal factors, and the opportunities and threats of its external factors of performance Through this analysis, the weaknesses and strengths within a company can correspond to the opportunities and threats in the business environment so that effective strategies can be developed.

SWOT Analysis

BMW strengths:

BMW is a well-known company with a high status branding that has a very high recognition factor.

BMW has advertised their cars to consumers through media and film industry greatly over the years showing that their cars are built for all classes.

Another Strength is that they have high budget to invest which can pay for labour, services, or product research. This means that BMW is a profitable company who has enough money to invest.

They also have highly skilled labour, as BMW is a big company they need skilled labour to make their products because BMW is a branded company, if the labour is poor the products will be cheap and they can loose customers. To make customers they have to invest more. The more they invest, more they make profit.

BMW is known as one of the automobile manufacturing companies that produce luxurious types of cars. However, a huge amount of expenditure is being used for employing experienced labor in order to produce vehicles of a higher quality compared to its competitors like Mercedes Benz, Toyota and Volkswagen. Due to the fact that most cars in BMW are made with premium automobile parts and requires skilled workforce, BMW’s products tend to be priced higher in contrast to their competitors in the automobile manufacturing industry

BMW weaknesses:

• Research and Development.
• High prices.
• BMW is a well-known company with a high status branding.
• Customer needs.

BMW is known as one of the automobile manufacturing companies that produce luxurious types of cars. However, a huge amount of expenditure is being used for employing experienced labor in order to produce vehicles of a higher quality compared to its competitors like Mercedes Benz, Toyota and Volkswagen. Due to the fact that most cars in BMW are made with premium automobile parts and requires skilled workforce, BMW’s products tend to be priced higher in contrast to their competitors in the automobile manufacturing industry

BMW opportunities:

• Innovation and Alliances.
• Diversification.
• New Technology.
• New Line.

BMW threats:

• Chinese Manufacturers.
• Rising Fuel Prices.
• Mercedes and Audi.
• Recession.

Brand value is closely related to brand recognition and its positive reputation, which means that BMW brand is one of the most recognizable automotive brands. BWM has a reputation of producing perfectly engineered vehicles, which offer luxury driving that few other brands can offer.

High brand recognition helps the company to introduce related product and services to the market faster and without huge advertising expenditure.

BMW has created a high expectation putting them in the spotlight. If one of the products loses its brand image then the whole group can lose its brand image. They have few Opportunities such as that they can merge with other international companies and promote their products. They can enter a new market providing low end cars. BMW’s threats are Chinese car manufactures producing similar cars. Being a company of such high calibre such manufactures should not be a threat to them and they should be able to ensure their customers of their product.

BMW Group pursues product differentiation business strategy and differentiates its vehicles on the basis of design, performance and advanced features and functionalities. Moreover, high level of integration of information technology and internet, as well as, electromobility represent solid grounds of BMW Group competitive advantage. At the same time, BMW Group has certain weaknesses that include a lack of portfolio diversification with only three brands, a high level of vulnerability to economic crises due to the premium pricing strategy and the lack of strategic partnerships with other businesses within and outside of automobile industry.

Assessment question:

Carry out research and present information on a Nando`s targeted marketing segments. (LO 3 -30%)

The STP model is useful when creating marketing communications plans since it helps marketers to prioritise propositions and then develop and deliver personalised and relevant messages to engage with different audiences.

• Segmentation: The process of dividing a market into smaller segments of buyers with distinct needs, characteristics or behaviours that might require separate marketing strategies or mixes.
• Targeting: The process of evaluating each market segment’s attractiveness and selecting one or more segments to enter and maintain a marketing mix intended to meet the needs of that group. Targeting is the step that follows segmentation.
• Positioning: A process that influences potential customer’s overall perception of a brand, product line, or organisation in general. Position is the place a product, brand or group of products occupies in the consumers’ minds relative to the competing offering.

BMW segmentation, targeting and positioning can be specified as the base of the marketing efforts of the company. BMW, as well as, any other business entity has to divide population into different categories according to a set of certain criteria and develop products and services that are particularly attractive to this specific group. This marketing process is known as segmentation, targeting and positioning. Segmentation, targeting and positioning is important because businesses cannot offer products and services that are attractive to all members of population in an equal manner. Segmentation implies dividing potential customers into different groups according to certain criteria such as age, social class, lifestyle etc. Segmentation can be divided into four types: demographic, behavioral, and psycho-graphic.

There is many ways to segment the market, such as:

• * Geographic segmentation: region, country size, city size, density, climate * Demographic segmentation: age, gender, family size, family life cycle, income, occupation, education, religion, race, nationality * Psychographic: social class, lifestyle, personality
• * Behaviour segmentation :purchase occasion, benefits sought, user status, usage rate, loyalty status, readiness state, attitude towards product

The BMW segmentation would look like that:

Geographic: All world

Demographic:Age between 30- 65+; gender male and female; family size 3-4; family life cycle singles, married with and without children; income £ 30000+; occupation professionals and technical, managers; education university, postgraduate, professionals; religion; race; nationality

Psychographic: Social class: middle class, upper middles, lower uppers; lifestyle achievers, strivers; personality ambitious, successful.| Behavioural| Purchase occasion regular occasion; benefits sought prestige, comfort, quality, reputation; user status regular user; loyalty status strong|

BMW Group has a strategy of targeting their customers by using segmentation. Geographically, BMW Group targets the areas that are more industrialized like Europe, North America, some parts of Asia and Africa i.e. China and South Africa. More than 70% of sales of BMW cars are recorded in Europe and North America.

Assessment question:

Analyse current marketing mix strategies employed by Nando`s and make recommendation to improve its current marketing mix to appropriately target its marketing segments. (LO5 – 30%)

The marketing mix is the set of controllable tactical marketing tools that an organisation blend to produce the response it wants from the target market. The marketing consists of everything the organisation can do to influence the demand for its products and services. The many possibilities gather into four groups of variables known as the Four P’s: product, price, place and promotion. More recently, two further P’s were added — process and physical evidence.:

BMW Product

BMW Group is engaged in development, manufacturing and the sale of engines as well as all vehicles equipped with those engines. BMW Group owns and sells its vehicles under the following three brands: BMW, MINI COOPER, ROLLS ROYCE.

The company pursues product differentiation business strategy and maintains 13 research and development centres in five countries. Vehicles produced under BMW Group brands belong to the premium segment and accordingly, they have highly efficient and reliable with advanced set of features and capabilities. BMW leads the automobile industry in electromobility and the brand is also famous for achieving a high level of integration of internet and digitalization in its vehicles.

Bmw Place

BMW Group has about 6,000 dealerships and sales representatives in 150 countries globally. The worldwide distribution network currently consists of around 3,310 BMW, 1,550 MINI and 140 Rolls-Royce dealerships. In China alone, around 60 BMW dealerships were opened in 2015.The dealership and agency network for BMWi comprises about 950 locations. As it is illustrated in figure below, China, USA and Germany represent the largest automobile markets for BMW Group and accordingly, these countries accommodate the largest numbers of dealership offices and representatives.

Bmw Promotion:

The promotional and advertising strategy in the BMW marketing strategy is as follows:

BMW has been a world-renowned brand for over half a century. The company has been a strong advertiser of its products and other offerings. The promotional strategy as a part of its marketing mix focuses on aggressive advertising using media channels like TV, online ads, billboards, print ads etc so that it can create a continuous brand awareness. BMW has been a close sponsor for various rally racing events and other sports events. The company also promotes many celebrated sports teams and rally racers. BMW has been a constant participant in various international rally races for a long time. They have been a successful team at the F1 races on numerous occasions.

Apart from the F1, BMW has also been a strong contender at the Superbike racing category. Since the beginning of its motorcycle manufacturing in 1923, the company has been actively participating in various racing events. Apart from the participation, the company has been a major organizer of such event globally. These events have led to BMW being recognized as a fast and reliable automobile over the years. Moreover, due to the huge fan following of such racing events across the globe, BMW has found an effective way to reach out to newer markets. Hence, this conclude the BMW marketing mix.

BMW People:

• BMW has people working under its sales team that play a vital role in its marketing efforts. These people have been trained in persuasive techniques, but also to show respect to the business customers taking into consideration their preferences.
• BMW has people working in its customer service department. These are contacted by customers in case of any issues within the product, and these people guide customers through the process of getting the issues resolved. These people are trained to respect the customers and try their best to get their issues resolved.
• BMW has people working with suppliers to obtain raw materials. These people play a vital role in maintaining or improving the quality of the final product produced.
• BMW has people working at retail stores who help the customer on site, by answering any questions or helping them decide the product that best suits their needs.

BMW Process

• BMW to make sure that its products are always available at retail stores has systems installed where retailers can notify when their inventory levels are low. BMW provides them with more products while ordering its productions to replenish its stock. This ensures that products are always available to customers when needed.
• BMW has an online delivery process, where orders are received in the computer system and based on these orders, the relevant product from the inventory is shipped to the delivery service provider.
• BMW is actively involved in researching market opportunities in order to understand customer needs. It also develops understanding regarding customer needs through feedback collected at store, its helpline or social media pages.

BMW Physical Evidence

• BMW sells its products in a distinct color packaging that easily identifiable on retail shelves. These are placed on special shelves provided by the company, which also have a distinct color and design. This makes it easier for customers to locate such shelves in busy retail stores.
• BMW has an online website that is user-friendly and allows customers to view its products in high quality images taken from various angles.

BMW should collect feedback from its customers regarding its packaging so that it could improve on this.BMW should set up its own stores where it provides a shopper-friendly environment and ambience, encouraging its customers to purchase its products.

BMW should undergo trainings for its sales force, customer services and purchasing people as these play a vital role in delivering value to the customers.BMW should provide incentives to its sales force through bonuses for meeting targets, or through commissions for the sales made. BMW should hire people that show respect towards customers, and are committed to the company.

BMW has 24 hours hotline number to help in communication with the company exclusively for certain model customers. They have a website for online communication. They believe in listening to customers when they are “with” you.

BMW strives hard to find out what their customer need are and works hard to wards fulfilling them. They believe that it is important to satisfy customer needs to keep customers happy and satisfied.

BMW also realizes that all the costs taken to design their cars are also to be included in the cost of the car. They have retailers selling their cars in different regions/countries at different prices based on the acceptable customer cost for that region.

The UK has an important role to play within the BMW Group. It is the only place in the world where all three of BMW Group’s brands – BMW, MINI and Rolls-Royce Motor Cars – are represented by manufacturing operations. BMW Group employs around 8,000 people directly in the UK with an additional 14,000 in its 147-strong Retailer network representing BMW and MINI brands. The company has invested nearly £2 billion in its UK operations since 2000, and the UK is BMW Group’s fourth largest sales market in the world

References:

1. https://en.wikipedia.org/wiki/BMW/
2. https://www.bmw.co.uk/en/footer/experience-bmw/about-us.html
3. https://www.bmwgroup.com/content/dam/bmw-group
4. BMW Group (2016). Annual Report 2016. Available at: https://www.bmwgroup.com/content/dam/bmw-group-websites/bmwgroup_com/ir/downloads/en/2015/12784_GB_2015_engl_Finanzbericht_Online.pdf Accessed 7th December, 2016
5. Interbrand (2016) Best Global Brands 2016. Available at: http://interbrand.com/best-brands/best-global-brands/2016/ranking/ Accessed 7th December, 2016

Analytical Essay on BMW Corporate Strategy

Introduction

Bayerische Motoren Werke AG, also known as BMW, is a German based automobile manufacturing company founded in 1916 by Franz Joseph Popp, Karl Rapp and Camilo Castiglioni. Today, it is considered one of the best companies of the car industry and it is owned by the parent company BMW Group, which is also known for owning other luxury brands such as Mini and Rolls-Royce. It operates 30 production and assembly facilities in 14 countries and is present in more than 140 countries. BMW started off as an aircraft manufacturing company but due to the consequences of the First World War, they switched into motorcycle production and later on, entered a new sector which was the automobile manufacturing. Today, BMW is known for becoming one of the world’s most popular automobile brands.

BMW has always been trying to create value that best suits customer’s needs. It is known for being a brand that does not strive to serve all segments of the automotive industry. Therefore, it rather concentrates on targeting the premium segment at a global scale. This premium segment is comprised of individuals and households who eagerly look for automobiles that transmit high quality, luxury and performance standards. They are known to be professionals or executives who belong to the middle-upper class and whose income is high.

They are determined and ambitious and loyal to the brand. Moreover, BMW is also known for creating value through its high investments in R+D. They want to provide its customers to choose from a diversity of models which include world’s latest innovations and high-quality standards. For example, BMW was the first one in its segment to manufacture electric cars thus reducing the consumption of CO2 emissions.

In addition, BMW is well recognized for having the best security systems in all its models. As BMW’s goal is to offer maximum safety, the company has applied intelligent security systems in order to protect passengers from serious injuries in case of accident. BMW tries to differ itself from conventional security systems by applying a system which has the capacity to react at the speed of lights due to their decentralized structure of the system.

The reason why we have chosen BMW is based on the fact that we are very familiar with the brand and its very well known worldwide. We decided to focus on BMW’s procurement division since it’s key in a company’s supply chain. By doing some research, we identified that most companies underestimate its importance and therefore, we thought BMW was a potential company to analyze.

Corporate Strategy

Companies define corporate strategies in order to fulfil its company’s objectives while achieving a competitive advantage. BMW’s objective is to become number one in the automotive industry. They seek to inspire people while developing tomorrow’s individual premium mobility.

With respect to BMW’s competitive advantage, it is built upon five different aspects. First, the company ensures to offer the best customer experience. Due to the strong relationship and understanding BMW has with its core customers, all products and services are based on their needs and desires.

BMW strives to create and design products where customers can feel emotionally attached to them and highly satisfied. Second, BMW is an aspirational brand. To increase its brand value, the company constantly performs a thorough analysis of its design and its perception of the brand in the market. Due to the creation of new technologies, BMW foresees future opportunities. Therefore, it strives to innovate and implement new technologies in its future products and services. In addition, BMW’s aim is to inspire all those people who work for and with them.

As a result, respect and integrity are 2 fundamental values that are considered when directing BMW’s associates. Finally, BMW has an active role in the different communities in which they operate. They are responsible for each of the actions they perform and always achieve positive and excellent results.

As mentioned before, BMW’s priority is to offer the best customer experience. To do so, its strategic approach is based on the idea of taking BMW to the next level. Due to the constant changes’ companies face today in this modern world, BMW strives to adapt to change by taking advantage of today’s new innovative technologies, digitalization, and sustainability. They are willing to exploit every single opportunity that comes on their way in terms of transformation and become the most innovative company in its industry.

Their aim is to keep growing and offering its customers world’s latest innovations. For future years, BMW will focus its core business on aligning sustainable mobility with technological changes in its product portfolio. This means that BMW will invest on improving customer relationship and getting customers familiarized with these new upcoming technologies, which in turn will create new market standards. BMW’s strategic approach involves the following aspects: brand & design, technologies, customer experience & services, digitalization, profitability.

How is BMW´s supply chain strategy aligned with the company strategy?

As mentioned in the previous section, BMW follows a strategy where the customers are seen as the most important stakeholders. Following their Customer Oriented Action philosophy, customers are taken into consideration from the beginning to the end of the value chain. As stated by BMW, growth, shaping the future, profitability and access to new technologies and customers are the four core goals of their corporate strategy, which are replicated in their supply chain strategy.

Car manufacturing is one of the most complicated industries to build a proper functioning and efficient supply chain. The demand for customization, complexity of the product, assembly line with thousands of different pieces and different regulations are only some of the reasons behind the intricacy of the supply chain.

In addition, BMW is well know as one of the world’s most premium brands with some brands such as Mini & Rolls Royce under their holdings. They can only keep such brand reputation by maintaining their quality through continuous innovation and improvement. The brand is known for their wide variety of customization options, this strategy mainly focuses on customers, they want to offer their clients a car on demand. In order to do so efficiently, they use MySAP communication. MySAP is a supply chain wide communication platform which connects suppliers, manufacturer & distributors. By doing so the company is able to satisfy customer preferences, shortening lead time while reducing stock costs. This is only possible communication is effective among all parts of the supply chain. Following these two practices, BMW attracts potential customers by customization and quality assurance.

BMW’s supply chain has two main pillars and areas of continuous work. The first of them is the assurance of quality and minimization of risk along the supply chain. This does not only improve the quality of their production but reduces huge potential losses. The second is to continuously improve supplier relations and work closely with them in order to improve their service and ensure all specifications are met.

Examples of their strategy to take on the newest technologies can be extracted from the platforms they use. In addition to their communications tool MySAP, BMW uses the latest technologies in sourcing. The e-sourcing platform ASTRAS eRFX, allows BMW to source, track & evaluate their potential suppliers for every new purchase. With a 4 step process the company is able to offer new contracts, receive bids, retrieve data about the different bidders from their databases and finally make a choice among them making sure all the requirements and specifications will be met.

Finally, BMW is taking a more sustainable approach to their production, taking into consideration the direction of the world and the latest concerns. Not only they apply to themselves but require their suppliers to follow some quality standards along with strict sustainability requirements. In most cases the company will investigate even further and take into consideration the suppliers of their own suppliers. This will be further explained in another section of the paper.

Build-to-order

The automobile industry background, nowadays, is quite distinctive and fast-driven with a constant change in customer´s needs. Disruptive technology has allowed the car manufacturers to boost their product line in order to cover a greater customer portfolio.

BMW has adopt a “[footnoteRef:1]designing to defer product differentiation strategy” aligned with a build-to-order production. The reasons behind these implementations are: [1: Mathews, S. (2015, July 28). Analysis of BMWs Global Supply Chain Network – its production – distr… Retrieved April 4, 2019, from https://www.slideshare.net/SachinMathews1/analysis-of-bmws-global-supply-chain-network-its-production-distribution-sourcing-strategies-and-mechanisms]

• Pull service to enable customers to build their car with their personal preferences increase marketing efficacy
• The demand is dedicated to an adaptable supply chain boosts production efficiency
• To create a steadfast, consistent and personalized service environment moves away from a mass-production logistics
• BMW´s customer relationship is shared across the entire company, therefore it is not located uniquely in the dealers´ area more devoted service.
• Dealing with uncertainty is strategically placed in the safeguard and information management area avoid waiting, till the finished good inventory, to solve any issues.
• Little condensed in dealer´s stock quantities avoid having excessive stock control in the finished goods inventory.
• Cooperative and receptive, in order to mitigate long lead times in the supplier area.

Value-added production system

BMW has implemented this system in order to make the most of the chain from product demo, through progress, manufacturing/procurement and distribution. The main purpose is to diminish any waste, in order to reduce expenses. BMW covers it through [footnoteRef:2]lean and a fast production process while guaranteeing their brand´s quality. Lean management in BMW is characterized to detect precisely any issue and deliver quicker solutions. [2: https://www2.deloitte.com/content/dam/Deloitte/us/Documents/consumer-business/us-cb-future-of-the-automotive-supplier-industry-outlook.pdf]

BMW supply chain strategy is delivered in an adaptable and responsive way not only thanks to lean management, but also to the connection between [footnoteRef:3] “value-stream mapping” and the 5s (sort, simplify, sweep, standardized and sustain). This services are being fulfilled by their constant update in disruptive technology. This permits the company to react to changes in customer´s needs (e.g. hybrid cars due to Kyoto´s protocol). Resultantly, this system enables to boost the improvement in their expense´s structure, quality and productivity per product. [3: Mathews, S. (2015, July 28). Analysis of BMWs Global Supply Chain Network – its production – distr… Retrieved April 4, 2019, from https://www.slideshare.net/SachinMathews1/analysis-of-bmws-global-supply-chain-network-its-production-distribution-sourcing-strategies-and-mechanisms]

Reverse Logistic Network

This logistic area is key for BMW in order to boost their competitive advantage in the market. They implement this strategy in two areas of their supply chain:

• “Closed-loop” is a production mechanism in which all the feasible resources are employed on the same process.
• “Post-industry-loop” is a production mechanism in which the company recycles materials, such as containers, for their manufacture.

Distribution Network

The company uses a selective distribution strategy, which new cars can only be sold through BMW dealerships. The central purpose of this distribution channel is to expand accessibility to the customers and add value through dealers that are in charge of providing additional expenditure of promotional purposes on top of ad campaigns that BMW carries out. Handling delicate showrooms in order to deliver unforgettable buying experience and provide after-sales services are some of the values dealers add on BMW cars.

Following their Customer Oriented Action philosophy, they are investing in technology to deliver agility to customers and reduce the lead time of their orders. The focus is on applications such as logistics robots, autonomous transport systems at plants and digitalisation projects for an end-to-end supply chain that are already being implemented worldwide in logistics at BMW Group plants. They rely on a global supply network and close cooperation with numerous logistics service providers. The Connected Supply Chain (CSC) program significantly increases supply chain transparency. It updates the plants material controllers and logistics specialists on the goods location and delivery time every 15 minutes. This transparency enables them to respond immediately if delays appear likely and take appropriate steps early to avoid costly extra runs.

Moreover, BMW Group is also seeking for achieving sustainability by their logistics. They aim at reducing truck CO₂ emissions by 40% by 2030 and to be completely emission-free by 2050. Due to that, the company is devoting effort to acquire CO₂ – efficient modes of transport. More than 60% of all new vehicles already leave production plants by rail. Although, it is still necessary to use trucks on certain in-and-outbound logistics routes, BMW Group is already using natural gas and electric trucks in cooperation with logistics service providers to reduce emissions from these truck journeys.

Supplier network and Management

With more than 300 different companies in North America, Canada and Mexico, the manufacturing of BMW relies on a wide and efficient supply network characterized by its working skills, experience and talent. They not only supply their products but are also keen on looking for alternatives to improve and achieve the highest quality products & processes that will improve the overall company and drive it to the top.

Regarding BMW’s overall supplier network, they work with around 12000 suppliers in 70 countries, being Germany and Western Europe the main providers. The wide variety of suppliers that they work with, have led them to create the BMW Group Supplier Sustainability Standard so all of them equally comply with all the social and environmental standards that BMW has implemented.

BMW is considerate when talking about their sustainability and therefore they focus on two main areas in order to be efficient, well focused and chase improvement.

First of all, BMW seeks to reduce risk and therefore they are very cautious with the projects that may create risky environments. They are very careful with the pieces supplied and the processes that they encounter when supplying them. As sustainability is a crucial part of their process, they audit every single supplier that they think might breach the norms in order to prevent any negative circumstances. To better prove the importance of sustainability for the BMW Group, we can state that they recognize it as one of the main pillars that identify the company.

Secondly, BMW takes advantage of every opportunity given and therefore work with their suppliers in order to achieve the best and most efficient returns. Also, they take care of their stakeholders as BMW likes to be involved in several initiatives which gives value to stakeholders.

Next, we will explain some activities that BMW uses regarding its supply in order to reduce costs and achieve better results.

BMW has also started initiatives in order to penetrate new developing markets where they will source their products locally. This will enable them to focus on their products faster and an overall increase in value. Also, the fact that products are sourced locally, costs can be reduced. This comes with trade-offs, as lower costs can come with the disadvantage of reduced materials. As products are sourced locally, the materials enabled for the processes can be reduced and therefore BMW would have to comply with what that country has available.

Not only does BMW outsource products but they also use “Just in Time” systems. These products will arrive to the exact point they are needed in the assembly line. This way they will reduce costs from inventory and production which will benefit overall company productivity. The trade-offs regarding this system could be the fact that they might be short on products as they don’t have storage.

To conclude, we can state that BMW’s supply network is extensive and that they give great importance to their suppliers and costs saved/incurred.

Conclusion

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