Category: BMW

Executive Summary

This paper primarily delves into the topic of CSR implementation in BMW and GM and the inherent differences between the two. When it came to implementing CSR on an operational level such as in its outsourced manufacturing plants or in its corporate decision making capabilities, there was evidence of a distinct lack of CSR on the part of GM.

BMW on the other hand did suffer from some of the same setbacks but did have considerably better CSR integration as evidenced by its factories which had better conditions for its workers and were less susceptible to environmental degradation.

Introduction

Corporate Social Responsibility (CSR) can be described as the process wherein corporations incorporate ethical methods of operation, aside from their profit oriented structure, into their business model.

This process involves the addition of ethical business practices, contributing towards community and social development as well as taking a long term stance towards helping members of the local community that a company finds its operations in (Homburg, Stierl & Bornemann 2013).

Graphic 1

Brief Information about General Motors and BMW

GM (General Motors) and BMW are two of the largest automobile manufacturers in the world and have been noted as being two of the most highly regarded companies when it comes to CSR practices. GM established the GM Foundation that contributes millions of dollars a year in reforestation efforts as well as in educating children in economically disadvantaged communities.

BMW on the other hand is tied in the number one spot for CSR Company of the year for 2013 with other companies such as Disney, GE, etc. Both companies have been noted as having stellar CSR programs in place when it comes to assisting a variety of communities.

In the case of GM and BMW, this manifests in acutely similar methods of CSR implementation. For instance, GM and BMW both implement a culture of open communication and ethical treatment of employees from both a factory level to those belonging to members of upper management.

This manifests itself in some of the best health insurance policies money can buy, maternity leave benefits, continuing education benefits (i.e. paying for the employee’s education) as well as benefits related to creating a business environment that is ethically oriented via corporate social responsibility directives and internal HR personnel whose jobs focus on ensuring the development of ethical behaviours within the company.

The end result is that employees within GM and BMW are treated equally and fairly resulting in the creation of an ethical work environment that facilitates moral decision making within the company (Glavas & Kelley 2014).

Based on an evaluation of the current production infrastructure of GM and BMW, it was determine that the framework for analysis will focus on the Triple Bottom Line and the category “Caterpillars” which defines a corporations activity as being relatively local on its impacts, single minded, ultimately unsustainable, capable of change, already operate in sector where others have evolved.

This particular framework was based on an examination of the operations of GM which was evaluated as being unsustainable in the long term.

Business Ethics

Business ethics can be described as the ethical framework that a company abides by when it comes to its operations. This encompasses not only in the way in which it sells its products but the manner in which it manufacturers them and how it addresses the long term impact of the company’s operations on society and the environment.

For BMW, one of the manifestations of business ethics the company has shown comes in the form of its various charitable donations wherein it has given well over $30 million to educational campaigns, community development initiatives and has even backed various art projects.

The same can be said for GM wherein the company has given well over $25 million over two decades to various charitable organisations through the GM Foundation. Other aspects of adherence to proper business ethics in the case of GM and BMW takes the form of their current development cycle where an emphasis has been placed on developing products that are considered to beneficial to the environment.

Hybrid vehicles, hydrogen fuelled cars as well as more fuel efficient vehicles are some of the products that have been developed within the past decade due to the current internal consensus within the companies that ecologic sustainability should be focused on (Schmeltz 2014). While the CSR programs of both companies are widely lauded for their contributions and a focus towards community building, from a business ethics standpoint there are some issues that need to be taken into consideration.

For instance, despite its much vaunted CSR programs which contribute towards reforestation, GM has actually been accused multiple times by the EPA (Environmental Protection Agency in the U.S.) as well as various environmental rights groups due to its operational activities that contribute towards environmental destruction (i.e. release of pollutants into the air, improper disposal of industrial waste, improper usage of dangerous chemicals etc.) (Hack, Kenyon & Wood 2014).

In comparison, BMW has been recognised since 2012 as the world’s most sustainable automotive company in relation to its production process, its emphasis on recycling and lower emissions on its factories and vehicles as well as its emphasis on better treatment for its workers. From this particular standpoint, it can be seen that BMW is “ahead” so to speak when it comes to its adherence to CSR standards.

It should be noted though that adherence to environmental sustainability is not wholly indicative of a company being better than the other when it comes to CSR. The difference between the two operations matters since it showcases what can be defined as a case of corporate “white washing” which is a practice where corporations showcase that they are behaving in an ethical fashion and contributing towards social and economic gains when in reality this aspect is merely a façade and is not a reflection of the entirety of the company’s operational activities (Sadler 2003).

This is particularly important to take into consideration since “whitewashing” merely implies that a corporation is attempting to be more sustainable but in the end its operations are not directly affected resulting in unsustainable practices. It is based on this that the next section will delve into a comparison of their management techniques and their measurement based on G3 guidelines.

Comparison of Management Techniques

Business

Businesses under the triple bottom line focus on the economic benefit that a society gains from the business operating within that particular sector (Werhane & Freeman, 1998).

While this aspect does include financial culture to a certain extent, this paper will focus primarily on factors related to the corporate culture towards sustainability that GM and BMW adopt, the aims of their current corporate strategies (i.e. are they focusing towards sustainability) and the possible routes towards sustainability that they are focusing on.

GM

Corporate Culture towards Sustainability

The primary focus of GM’s corporate culture towards sustainability focuses primarily on energy savings and waste reduction in its factories. So far, the company has been able to save $20 million in energy costs per year due to waste saving measures (Korschun, Bhattacharya & Swain, 2014).

Aim of current corporate strategy (i.e. focus towards sustainability or not)

Based on an evaluation of GM, the focus is towards sustainability, however, it is oriented more towards cost savings than due to CSR.

Possible routes towards sustainability

One of the current endeavors that GM has been focusing on when it comes to more sustainable practices takes the form of developing alternative fuel vehicles that would help to lower dependence on fossil fuels (Korschun, Bhattacharya & Swain, 2014).

BMW

Corporate Culture towards Sustainability

BMW’s current corporate culture towards sustainability focuses primarily on ensuring the company has a small environmental footprint due to its operations. This comes in the form of:

a.) Lowering the use of and the diversity of the resources that goes into its products to ensure sustainable extraction processes

b.) Making sure that the materials that go into their vehicles are recyclable during their end of life phase

c.) Avoiding almost all usage of environmentally damaging materials during the production phase

d.) Researching new methods of car development that are in line with lower pollution rates and are more viable in terms of resource utilisation

Aim of current corporate strategy (i.e. focus towards sustainability or not)

The current aim of the corporate strategy of BMW is a focus on sustainable production processes as well as the creation of cars that have a minimum adverse impact on the general environment. This aim manifests itself in the fact that cars from BMW are regularly stated as being some of the most fuel efficient cars in the market.

Not only that, the company is actually tied in first place with several other corporations (i.e. Disney and others) as being one of the most sustainable companies in the world that implements proper CSR practices in nearly all levels of its operations (Korschun, Bhattacharya & Swain, 2014).

Possible routes towards sustainability

The main route that the company will focus on when it comes to sustainability takes the form of the various fuel efficient and alternative fuel vehicles that it is currently developing. These come in the form of its hybrid cars, hydrogen powered cars and even electric powered cars that have a far lower environmental impact as compared to cars that are primarily powered via fossil fuels. Though it should be noted that due to the current development cycle of the company, these cars are still in the testing phase, however, BMW is orienting itself to primarily produce such vehicles due to its focus on sustainable corporate activities.

Social

Under the social aspect of the triple bottom line, businesses are evaluated based on their impact on the individuals within a company (i.e. the employees) and the people that are outside the business (i.e. members of the local community).

Thus, when it comes to evaluating the adherence of a business to the concept of CSR, the social aspect of the triple bottom line examines whether a business is operating in a way that benefits the local community and that people within the business (i.e. the employees) are not being endangered or exploited in any way shape or form through normal company operations (Burlingame & Young 1996).

Thus, in this section of the examination between GM and BMW, what will be examined are factors related to wages, working conditions, labour utilisation during operations, and the contribution of either company towards the living standards of the local communities in which they operate.

GM

Wages

When examining the wage scale for employees at GM, it was noted that entry level employees at the company earn an average of $19.28 per hour and were given a $5,000 signing bonus once they are formally made employees of the company.

Aside from this, GM also provides $4,000 per year in inflation protection for its employees. In comparison, the average minimum wage salary within the U.S. is $7.25 per hour for entry level positions within a company. From the perspective of Meiners, Ringleb & Edwards (2000), when it comes to triple bottom strategies, wages are considered one of the first indicators of adherence to proper CSR strategies since people have a right to what can be defined as “a living wage” (i.e. the amount needed to be able to survive).

When examining the case of GM, it can be seen that it adheres to this concept by providing wages that are more than half of the prevailing minimum wage rate for entry level employees which enables them to have a comfortable living.

On the other hand, it should be noted that when it comes to the scaling of the wages, it was noted by Rahim & Alam (2014) that GM did not scale the income levels of its workers proper wherein factory line workers rarely, if ever, reached the first tier of salary payments which encompass $30 to $40 per hour.

Instead, wages are scaled based on company metrics wherein the difference in wages between an entry level factory worker and someone that is experience is basically $1.

Working conditions

The analysis Rahim & Alam (2014) of explained that workers within the various international factories of GM are subject to dangerous working conditions. In fact, a recent explosion in one of GM’s factories in China showcases the lack of sufficient safety protocols, insufficient installation of safeguards as well as a lack of protection for workers at the company for the various chemicals and fumes they are exposed to.

The end result was that even the Chinese government which is known to turn a blind eye towards the implementation of safety protocols in factories actually prevented the expansion of GM’s factory in Shenzen due to safety concerns.

Labour utilisation during operations

One of the main problems with the labour utilisation of GM is that workers within its various factories have been noted by Wagner, Lutz & Weitz (2009) as being overworked and underpaid as compared to their counterparts in the U.S. The case of GM in Mexico shows that workers are paid $4 an hour and are subject to 12 hour work shifts in order to keep up with the production demands of the company.

While this is higher than the standard minimum wage within Mexico (86 pesos per day), the fact remains that wages paid do not reflect the skills of the workers and the amount of time put into their jobs. This case is not limited to Mexico but actually extends to its factories in China as well.

Contribution towards the living standards of the local community

The primary contribution that GM has had towards the living standards of local communities comes in the form of its preferential career sourcing that targets local talent instead of bringing in workers from outside the state. This comes in the form of local career fairs, utilising local employment firms and a variety of other strategies that focus on ensuring that members of a local community are hired by the company.

Aside from this, GM also contributes extensively to local education funds so that potential scholars are included under the GM Foundation scholarship program which provides subsidies for their college education. Lastly, the company also contributes to various local environmental organisations that focus on tree planting and other ecologically beneficial operations.

BMW

Wages

In comparison to GM, BMW actually pays its low skilled workers a far lower rate as compared to its German workers in its primary manufacturing facilities in Germany. German workers are normally paid $30 an hour while their American counterparts are paid $15 an hour.

This wage situation is even worse in other countries such as in China where the ages average $3 to $4 for non-skilled employees on the factory floor. While it is understandable given the fact that skilled workers should be paid more, the fact remains that BMW only pays its employees the modicum allowed to place them under the category of having a “living wage”.

This is despite the fact that the company constantly emphasises the fact that it treats its workers fairly.

Working conditions

Based on the examination of Wagner, Lutz & Weitz (2009), it was noted that BMW places a considerable emphasis on the safety and security of its workforce.

This manifests in strict guidelines being enforced when it comes to the condition of its factory in relation to how safe it is to work in it, what methods have been implemented to ensure the protection of the employees that work there as well as avoiding the use of potentially toxic chemical compounds that could cause serious health problems.

Labour utilisation during operations

When it comes to labour utilisation, BMW is often cited as having the best labour conditions in the world wherein the company ensures that workers only work 8 hours a day with substantial increased payments being given if overtime is required due to tight deadlines.

Aside from this, the company also implements a variety of “build from within” strategies when it comes to talent management wherein employees that have proven themselves to be capable hard workers are earmarked for further training and advancement within the corporate ranks of the company.

This adheres to proper to CSR oriented operations since it showcases that the company actually cares about the various workers it hires and focuses on improving the state of its workforce.

Contribution towards the living standards of the local community

The contribution that BMW primarily makes to the living standards of the local community comes in the form of various donations to art and education programs. These scholarships help to support local artists and students in order to promote what is known as “the common good”.

Aside from this, the company often donates money to disaster relief efforts in their regions whenever a natural disaster strikes.

Environment

Under the concept of the triple bottom line, companies attempt to improve their level of environmentally sustainable practices whenever possible (Ottman, 1998).

While this normally comes in the form of reducing the amount of pollution produced by the company, this also manifests in other aspects such as the total lifecycle impact of the products they produce (i.e. the amount of resources used to produce and distribute their products) as well as the environmental footprint of the products they sell.

GM

Methods utilised in reducing pollution

Some of the present day methods that the company has attempted at reducing pollution comes in the form of lowering the energy costs associated with its various factories.

A recent report showed that GM was actually able to meet the EPA’s (Environmental Protection Agency) Energy Star Challenge for Industry which focused on a reduction of a company’s carbon and energy use (Komodromos & Melanthiou, 2014). GM was actually able to reduce its total energy usage in its U.S. based factories by 20 percent within a period of 5 years.

Total Lifecycle Impact of Products

When examining the total life cycle impact of GM’s various vehicle brands, it is noted that other car manufacturers such as Toyota, BMW, Kia and Hyundai have actually be cited as having better fuel efficiency than GM’s vehicles.

While GM has stated that its various vehicles are fuel efficient, independent testing from nonprofit organisations as well as government agencies around the world have shown that they are not as fuel efficient as compared to their counterparts. It should also be noted that in terms of emissions, GM cars are notorious for their high level of emissions (usually due to the size of their vehicles) (Komodromos & Melanthiou, 2014).

Do note though that most of the materials that go into a GM car makes its 75 percent recyclable, a factor often cited by GM, however, they neglect to take into consideration the sheer amount of processing required which would make it more expensive to recycle than to actually make a new car (Komodromos & Melanthiou, 2014).

Taking these factors into consideration, it can be seen that the total life cycle of GM’s products do have a significant adverse environmental impact which impacts its adherence to CSR.

Environmental Footprint

Despite the fact that over 100 of GM’s factories have attained the “zero waste mark” which is a standard for indicating adherence to lower emissions, resource utilisation and waste materials, the fact remains that this is not indicative of all of the company’s operations.

An examination of GM’s operations in China reveal substantial environmentally damaging practices due to high emission rates, improper waste disposal as well as a variety of safety concerns. One of the reasons behind these actions was due to the lax environmental and worker safety standards in China which enabled GM’s operations to continue despite the potential long term damage to the environment.

BMW

Methods utilised in reducing pollution

Based on an examination of the work of Sharma & Khanna (2014) which examined the efforts of BMW towards sustainable operations, it was noted that the company has recently implemented more efficient methods of operation to reduce the amount of pollution its factories produce.

This has manifested in a 60.9% reduction in the amount of waste produced by its global factories that go into landfills, a reduction of 55.1% of industrial waste water that is utilised in its production processes as well as a reduction of 31.3% when it comes to the amount of pollutants it expels into the atmosphere (Weisheng, Chau, Hongdi & Wei, 2014).

Total Lifecycle Impact of Products

Through the analysis of Sharma & Khanna (2014), it was noted that the total lifecycle impact of BMW’s products is actually quite low due to its current focus on environmental sustainability. This comes in the form of utilising recycled and sustainable materials for its cars which helps to lower the overall amount of waste material that the company sends to landfills.

Aside from this, BMW is often cited as having some of the most fuel efficient vehicles in the world which minimises their overall carbon footprint due to lower emissions. Aside from this, the company has also endeavoured to make sure the various parts of its cars are recyclable resulting in a 70 to 80 percent recyclability rate for the entirety of the vehicle.

Aside from this, the company has also implemented a buyback program for its cars which enabled the company to purchase old vehicles back from its consumers and recycle them into new cars. This enables the company to further lower its overall environmental footprint by minimising the amount of waste material that finds itself into a local junk yard.

Environmental Footprint

The factories the company has all over the world conform to global standards in worker safety, environmental preservation and the various workers of the company are actually paid above the going rate as compared to other factories.

As mentioned earlier, the company actually implements extensive emissions testing requirements along with implementing a broad worker safety program that encompasses all its global operations. What this means is that compromises in quality and environmental sustainability due to a lack of sufficient local regulation are not done (Montana & Charnov, 2000).

Instead, the company focuses on creating a sustainable manufacturing infrastructure regardless of the possible opportunities for greater profit via compromises in work safety and environmental sustainability.

What this shows is that the company adheres to proper employee care, community assistance and ensuring the continued preservation of the environment

Evaluation of both Companies

Based on what has been shown so far, it can be seen that GM has issues when it came to proper CSR implementation. While it may be true that the company does have programs in place that apparently show that they are a strong advocates for CSR, when looking at the company from an operational standpoint utilising the information that has been presented in this paper.

It is immediately obvious that CSR implementation under the triple bottom line is lacking when it comes to its manufacturing processes, product life cycle and employee wages. In comparison, BMW has exemplary product life cycles, environmentally sustainable manufacturing processes but has issues when it comes to the wages paid to employees.

Conclusion and Recommendations

In order to orient GM with the proper triple bottom line CSR initiatives, the following are recommended:

1. Increase the employee pay scale to reach $25 to $30 for experienced workers within its U.S. factories as well as increase the pay scale and implement reasonable working hours for its workers in its international factories.
2. Implement better working conditions in its factories located in other countries.
3. Increase observance of environmental sustainability in its foreign factories.

In the case of BMW, the following is recommended:

1. Apply a better pay scale to its employees.

Reference List

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Appendices

Graphic 1

Product introduction

The chosen product is BMW, one of the most famous and successful car brands on the modern market. The company actively uses a variety of marketing strategies, considering the market and demographic analysis. It makes BMW’s sales ratings even higher, along with the quality of the goods and the productive capacity of the organization. In addition, despite the fact that BMW is similar in terms of popularity and quality to companies such as Audi and Mercedes, the company has its own characteristics. BMW has its own target audience that appreciates these particular products. It is due to the unique niche models and special technologies introduced into the lineup.

The selected country is China, which makes up the majority of the BMW car market. Thus, there has been an increase in sales of this brand in the Chinese market, despite the competition between Mercedes and Audi. Moreover, the average income of the population of China also contributes to the popularity of this brand. There is an automobile manufacturer in China whose main task is to manufacture, distribute and sell BMW vehicles in the Chinese market. In addition, they are also engaged in the production of batteries for electric vehicles of this brand. Besides, the plant is one of the most environmentally friendly due to joint efforts with the Chinese government.

Marketing Campaign Analysis

Sensory marketing is a popular marketing strategy for many companies, the main task of which is to engage the audience’s senses. This strategy is applied in this product, namely during the exhibitions of new brands, when a person has the opportunity to touch and feel inside the salon. Stimulus-response is also a BMW marketing tool: namely, engine sounds in commercials. This provokes the release of adrenaline in people who have already been driving this brand and heard a similar sound. Thus, virtually through sounds and images, the company can operate with the senses of an audience. Consumer involvement is one of BMW’s effective strategies, considering the status of these cars. Thus, people with high incomes are likely to purchase BMW vehicles, which is one of the incentives to buy.

The multiple selves theory is also used by BMW’s marketing strategies. This theory concerns individuals’ inner selves, desires, and conflicts within people. For example, there are individuals who buy these cars despite financial difficulties. This is the result of an internal conflict: from a rational point of view, buying a car is not profitable, but the other “I” wins. The company’s personality brand formulates the feelings and emotions that a person experiences when interacting with the brand. In this case, many people associate BMW cars with speed, success, and comfort, which formulates the brand’s personality. In the context of sales and business, this is a successful personality brand as it promotes positive associations.

Fishbein Model

Fishbine’s model is effective in terms of determining the quality of sales of products as well as the formation of attitudes. The main components are the attitude to the object, the power of opinion, the evaluation of indicators, and the number of significant indicators. In this regard, BMW has a successful Fishbine model, which in some cases can be more successful than its competitors. Manufacturers were able to prove to customers that a) their cars are fast, b) safe, c) comfortable. In today’s world, this is the basic requirement in the automotive market, from which the following Fishbine model is obtained. The attitude towards the object is positive, the power of opinion is sufficient, the assessment of indicators is high, and the number of significant indicators is adequate. Compared to three competitors, such as Mercedes, Audi, and Lexus, some of their indicators are lower, for example, Mercedes is often associated with expensive repairs.

Assuming that this model represents actual consumer perceptions, one can highlight some recommendations. First, it is necessary to take into account the disadvantages of competitors and prevent their manifestation. For example, an expensive Mercedes repair, this opinion was formed due to inflated prices for components. Accordingly, it is necessary to monitor the pricing policy of service centers. Another example is the association of a bad climate system in Lexuses: it often breaks down. In this guard, it is necessary to check all vehicle systems more often. Thereby, Fishbine’s model can be perfected, which will formulate even greater success

Brand Community

Brand communities are an essential and useful aspect of any product. This promotes the development, makes additional advertising for the product, and also increases the number of fans since the person subconsciously wants to be part of the group. BMW has a strong brand community around the world, which includes forums, conventions, clubs, online meetings, etc. All this promotes BMW products, as well as replenishes the fan base. In addition, the management of the company, taking into account the claims, wishes, or advice of the community, can improve the products. If I had to advise on how to improve the BMW brand community, I would highlight the recommendation for various events. Namely, the company could organize more official events, which would have a positive impact on the fan base.

Other reference groups of clients are those that the customer wants to be like or compare himself to. It can be parents, sisters, brothers, relatives, friends, colleagues, etc. Thus, a chain of buyers is formulated: for example, a friend bought a new brand of BMW, and one’s relative wanted the same one. Or, an acquaintance told other friends about the purchase, which formulates an advertising chain for the product. In addition, this is also part of the stimulating effect and status of the car: namely, the association with success.

Demographics

The target consumer of any product has similar characteristics: income, social class, family structure, etc. In this regard, the potential client is of medium to high income, of moderate to high social status, and usually with a family. This is articulated by a wide range of family vehicles such as jeeps. In addition, age may fluctuate due to the fact that many young successful people acquire this brand, but at the same time, it is popular with middle-aged and mature people.

Conclusions

To conclude, it is worth noting about BMW’s standardized or localized marketing strategy in China. In my opinion, a localized marketing strategy has been undertaken in this country, which formulates an individual approach to the market. This is formulated by the specific needs of the Chinese automotive market. Firstly, there are environmental requirements, which means an emphasis on environmentally friendly cars, that is, electric cars or hybrids. In addition, there is a demand for the economic consumption of gasoline, which constitutes the development of cost-effective technologies in BMW cars.

Reference

Boeriu, H. (2019). BMW launches the marketing campaign for the new 1 Series.BMW Blog.

Executive Summary

Type of problem

The automotive industry has presented humanity with a wide range of beneficiaries. However, it is pointed at as a major source of air pollution resulting in climate change, green house gases, human diseases and many other problems. In fact, the industry is among the biggest consumers of fossil fuels.

The development of green technology towards mitigating the effects of air pollution is contemporarily critical in realizing sustainable development. The development of innovative systems and technologies possess the capacity to improve performance if appropriate resource management is put in place.

Requirements

In order to attain sustainable development in the automotive industry, the management of resources is crucial. Human resource management (HRM) is particularly important. HRM draws out the incentive of employees and assists in the development of expertise (Shatouri, Omar & Igusa, 2012).

An organization cannot perform at optimal level until every employee is dedicated to the organizational goals and function as an efficient team member. The input of the human resource function is therefore essential for an automotive company to produce automotives that will ensure not only sustainability development but also contribute towards the profitability of the company.

Proposed business solution

Strategic human resource management is the main means through which a company can mold the skills, behavior and attitudes of the employees to support the company’s strategic goals. In a company such as Bavarian Motor Works, the implementation of sound HRM strategy in view of employee will be beneficial to the company in moving towards the green technology in operation and production of automotives.

The engagement of employees in decision-making is critical in individual and organizational performance. This study will address the importance of implementing a set of human resource management strategies that will elicit workforce’s motivation in developing expertise and innovativeness. The strategic practices proposed will allow BMW to realize and employ knowledge and skills in its employees. This will in turn accelerate innovativeness with sustainable environment practices in the mind of the employees.

Main Body

The proposed project portfolio-management method

Project portfolio management is an assortment of methodologies and strategies that are intended to assist in managing a multiplicity of projects efficiently and successfully. BMW has been successful in managing other projects considering the financial endowment of the company. In fact, the company has the capacity to employ expertise in appropriate fields. However, this is usually costly as those engaged in specific projects disengage once the contract is over.

The company then engages others to continue with the project. In order to minimize the costs incurred by the company in its efforts to develop green technologies, the HRM approach is the most feasible approach. The introduction of HRM to the company will ensure that a culture is developed. The culture will ensure that the company does not require engaging outsiders for growth, profitability and development of the company (Lopez-Nicolas & Mero-Cerdian, 2011).

The company will depend on the established employee loyalty, dedication, innovativeness and commitment to the endeavors of the company. This is only achievable if sound human resource management is put in place as a continuous process for the current and prospective employees.

The approach will ensure that the employees will actively contribute towards innovativeness in the company. The proposal comprise of three HRM practices that hold up an innovation-based HR system. These include training, performance-based rewarding and team development.

Training

The quick rates of technological changes require regular training of the workforce in order to remain relevant in their respective roles. The acquisition of skills requires being continuous. Training the workforce enhances skills and knowledge essential in the development of new products. Organizations that are high performers invest time and financial resources in educating and training the workforce. The training will be aligned to the needs of BMW.

Performance-based Rewarding

Trained employees are typically competent based on the training they receive. However, different individuals employ the acquired knowledge differently. Learning behaviors that make individuals to improve their performance necessitate rewarding to sustain competitiveness.

The approach will ensure that BMW benefits from the training mediated by the workforce’s skills, behavior and attitudes. In this proposal, performance rewarding will be primarily based on product development. This does not translate to doing away with other rewards.

Team Development

Technology-oriented researches indicate that teamwork plays a fundamental role in eliciting innovation (Shatouri, Omar & Igusa, 2012). Organizational development and performance significantly depends on team development planning. It influences organizational performance, improves productivity, innovativeness as well as workforce morale.

BMW requires implementing professional team development initiatives under the HRM function in order to encourage the teams to contemplate as a unit. It will also assist individuals in developing a range of interpersonal expertise including motivational, leadership and communication skills.

Rationale

BMW’s overall plan to conducting business begins with the idea that an organizational competitive edge should be anchored on the value for individuals. BMW has a basic supposition that has been cautiously chosen and grown on employees for quite some time. The company assumes that the more people it has the more the production and consequently the profitability of the company.

The proposed project aspires to diminish this aspect by introducing the ‘engaged, motivated and satisfied employee’. Instead of having a massive workforce that is not engaged in research and development, innovativeness and engagement, the project will seek to develop a workforce based on the aforementioned perspectives. This will lead the company in attaining competitive advantage and shared prosperity.

Strategic efforts of BMW

BMW is globally renowned for quality world-class automotives and technology initiatives. The company maintains an outstanding profile in its human resource policies and standards. The company believes that investing in human resources is the key to success in the production and manufacturing-oriented companies.

The company in the past has made investments in the human resources by poaching professionals from other automotive companies (Zapata & Nieuwenhuis, 2010). However, this approach regardless of being successful has not been sustainable. Other companies also poach employees from the company.

BMW consequently has had to repeat the process thus making it a costly process. The programs that have previously been employed by the company were based on the belief that when the right tools are applied to particular problems through highly skilled personnel, the organizational performance will spectacularly improve in a considerably short duration. Such a program is targeted at labor cost and inventory reduction while minimizing quality challenges (Lopez-Nicolas & Mero-Cerdian, 2011).

Vision

This project will create a large pool of knowledge and motivated workers that will guarantee a stable flow of competent and innovative human resources to handle BMW’s global business. This will focus wider than the current practice in which the company believes in expertise in the production line only.

Goal

This project seeks to establish an organizational culture that will assist the company in developing the skills and competence of the employees. The employees will require being motivated to contribute in attaining the objectives of the company. By having a dedicated workforce, the success of the company will be guaranteed in case other areas outside the human resource function will be well attended to by those concerned.

This goal is specific in that it seeks to have a committed and satisfied workforce. It is measurable considering that the contribution of the employees can be assessed and compared to performance prior to the implementation of the program. The goal is attainable since it involves human interaction, employee satisfaction, creation of commitment and consequent innovativeness.

HRM is currently the approach employed by many successful companies and it promises a worthy future for companies that will implement it. In fact, it is realistic since it has been done before while the approach is timely for BMW. The company needs to reduce recruitment costs, gain competitive advantage and ensure environmental sustainability (Zapata & Nieuwenhuis, 2010).

Major Deliverables

Organizational integration

This is the primary deliverable of the project. This will be at personal and corporate level. The teams will be subordinate to the company objectives. The teams will be composed of individuals hence a relationship between the individual and the company will be established.

Commitment

This is an outcome of the initiative. Once the employees are engaged with the company at all levels, loyalty will be created.

Adaptability and Flexibility

There will be no single authority holding powers over teams. The team leader will only act as the link with other teams. The teams will be restructured according to the situation. Job rotation will be an aspect of the initiative to develop skills fully in all employees.

Quality

The training of the teams means that the individuals can assess their own performances, their peers and the entire team. This will be coupled with benchmarking and continuous process improvement.

Change Management

This approach will bring with it significant changes. The HR function will ensure that the changes positively influence the individuals and the company to maximize performance and motivate the employees.

Timeframe for solution delivery

• January to February 2014 – Putting the necessary infrastructure in place
• March to June 2014 – Training of staff
• August 2014 – Assessment of the change in attitude
• September 2014 – Performance appraisal
• January 2015 onwards – Quarterly training and performance appraisal

Table of resources

Total Budget for the project

Currently, BMW has programs that are designed to find the most skilled personnel for respective departments particularly the production division. The company will require purchasing equipment that will facilitate training and evaluation of performance. The total budget is estimated at $50,000.

Key success criteria

The success of the proposed initiative will be assessed according to the improvement in performance and the company. Using performance appraisal tools, the level of improvement will reflect whether the initiative is successful or not. The rationale in this is that the company already has a HR program. However, the proposed approach presents the company with a significant departure from the current practice.

Stakeholders’ satisfactory levels

• There will be evident change of attitude in interactions.
• Company performance will increase
• New products will be produced

Conclusion

Training, performance-based rewarding and team development present companies with the opportunity for innovation, gain competitive advantage and move towards sustainable development. The move helps an organization to reduce costs while ensuring environmental sustainability through innovative workforce.

References

Lopez-Nicolas, C., & Mero-Cerdian, L. (2011). Strategic knowledge management, innovation and performance. International Journal of Information Management, 31(6), 502–509.

Shatouri, R., Omar, R., & Igusa, K. (2012). Towards a new era of sustainability in the automotive industry: Strategic human resource management and green technology innovation. World Academy of Science, Engineering and Technology, 69(2), 217-222.

Zapata, C., & Nieuwenhuis, P. (2010). Exploring innovation in the automotive industry: New technologies for cleaner cars. Journal of Cleaner Production, 18(1), 14– 20.

Introduction

The purpose of this report is to suggest a market entry plan for BMW Group; however, it will propose this company to choose Somalia as a new market to start business operation. This report will discuss the background of the company, strengths, and weaknesses of BMW, market position, global business environment, and economic position in Somalia, income statement, balance sheet, and cash flow statement and so on.

Company Profile

Ranker (2014) stated that BMW Group was established in 1917; now, it is one of the ten biggest car makers in the world and it owns three finest brands and occupies robust position in motorbike division and runs flourishing financial-service business; moreover, it targets to engender lucrative augmentation and incomes through the first-class fragments of the global vehicle markets.

According to the report of BMW (2014), it has resolutely placed on the finest zone of the global vehicle industry because of the three major brands, namely, BMW, MINI, and Rolls Royce; moreover, the company is dedicated to provide the best quality products and services through excellent research, development, sales, and marketing; these issues reflected through its performance.

Products

Ranker (2014) provided the characteristics of the products of the company in the car sector; apart from making countless models of vehicles, BMW also offers financial services; however, the next table provides brief description of its product line:

Figure 1: Products of BMW

Source: Self generated from Ranker (2014)

Strengths and Weaknesses of BMW

The strengths and weaknesses of the company have considered briefly in the table below:

Table 1: Strengths and weaknesses of BMW

Source: Self generated

Market Positioning of BMW

The market positioning of BMW is very strong indeed throughout the world; it remains to the most prestigious and favorable brands amongst the customers; as a result, it positions itself amid the best selling brands throughout the globe.

Cain (2012) noted that BMW remained to position itself as the top selling luxury brand in the USA by holding more than eighteen percent of the luxury car market; it is notable that Mercedes-Benz’s positioned itself as the second car marketer whilst Lexus was in the third position according to the survey; this has been illustrated in chart below:

Figure 2: Market Positioning of BMW in 2012

Source: Cain (2012)

Integrated marketing communication (IMC) Strategy

The IMC tactic of the company would be based on coherent integration of online and offline promotional tools to put together and uphold brand awareness, and obtain, foresee, please and aware the clients; it is important to note that the online and offline tools would comprise of event sponsorships, contests, websites, interactive demonstrations, displays, hoardings, and printed advertisements.

All the marketing operations would be synchronized with each other; otherwise, clients will just observe isolated interactions; however, it is significant to state that films have played a major role in advertising the cars of the corporation; for example, the corporation got vast publicity when Mini Cooper was featured in a film; so, it is a necessary IMC choice.

Sustainable Competitive Advantages enjoyed by BMW

It is notable that super brand awareness, excellent technologies, great research and development, unique car designs, customized designing for clients, perfect promotional and advertising tools and mediums, highly talented labor force, proficiently prepared corporate and global strategies, and nice corporate cultures are the key competitive advantages of this firm; the following chart outlines the sustainable competitive advantages of BMW:

Figure 3: Sustainable competitive advantages enjoyed by BMW

Source: Self generated

Population characteristics and socio-cultural factors of Somalia

With population of about 10428043, Somalia belongs to clan and sub-clans; these hierarchical-descent factions are innermost part of Somali society; conventionally, clans unite for getting safeguard, water, land, and political power; moreover, rural societies are essentially democratic and councils of men make decisions.

Current Global Operating Environment

The purchasing power of the global customers had slowed significantly in the recessionary period; therefore, this luxury car manufacturer had experienced severe challenges in India, Brazil, and Russia, but BMW made profits from international market even during the time of global financial and economic crisis; however, the global economy stabilized in 2013 and it manufactured a record volume of cars.

The current global business environment would be difficult for the global companies because of high public debt levels in Europe, the uncertain conflicts in the Middle East, and domestic political divergence in different countries; however, it would gain competitive advantages over the competitors in the US, Chinese and Indian market though it has recalled near 140,000 vehicles in China. However, the next table provides more information:

GDP Growth

According to the report of BTI (2014), GDP annual growth rate along with GDP per capita (PPP) illustrated poor economic performance since GDP annual growth rate was only 2.6% in 2012 and GDP per capita (PPP) was $547 in 2010; however, income from exports contributed 50% of the national GDP; however, the next table shows more information:

Table 2: GDP per capita (PPP) growth rate

Source: (Indexmundi, 2014, para.1)

Labor force in Somalia

According to the report of World Bank, more than 70% of the total labor force is engaged in the agriculture sector as the national economy fully based on this segment; on the other hand, rest 29% labor force is working in the industry and services market; however, the following table gives more information about Labor force in Somalia:

Figure 4: Labor force in Somalia from 2004 to 2014

Source: (Trading Economics, 2008, para. 1)

At the same time, Young (2014) reported that 70% of the total young people are unemployed and they endeavor to cross Mediterranean Sea with intent to leave this country to get jobs; some individuals are working for terrorist organizations and piracy groups; therefore, multinational companies are unwilling to operate business in this country.

Exports from Somalia (2006 to 2012)

Simoes (2014) stated that livestock and other agriculture items are the key export products and main export items include bananas, hides, fish, charcoal, scrap metal; in addition, major exports partners are Oman and Yemen; however, the next table provides more information:Table 3: Total exports from 2006 to 2012

Source: self-generated from Simoes (2014)

Imports (2006 to 2012)

The report of Simoes (2014) illustrated that machinery and equipment, chemicals, petroleum products, foodstuffs, construction materials are the main import items; however, subsequent table provides more information about imports:

Table 4: Total imports and the main import partners from 2006 to 2012

Source: self-generated from Simoes (2014)

Major trading partners’ countries

Table 5: The main import partners of Somalia

Source: self-generated from Simoes (2014)

Political Factors of Somalia

BTI (2014) addressed that Somalia is going through severe violence and serious humanitarian crises due to long-term civil war although the population consists with homogeneous ethic group of the Muslim, but they engaged themselves into irrevocable conflicts in order to exercise power and to collapse the state mechanism.

In 2011, the local armed force along with the peacekeeping troops had defeated the Islamist armed groups and the overseas powers who have economic interest in the countries along with NATO expressed their optimism that the federal government would be capable to enhance reconciliation practice and reconstruction progression.

Al-Shabaab had taken control over the majority parts of the country from 2007 and increased its power to take control over the few parts of Mogadishu by 2011, but intervention AMISOM with a force of 10,000 troops, and sudden aggression of Kenya following the footstep of Ethiopia Al-Shabaab was forced to escape from Mogadishu in 2011.

At the same time, Al-Shabaab was likely defeating due to combine pressure and continued political negotiation; as a result, the municipal election were held in November 2012 where the opposition wined in the local governmental bodies that provided further hope to the international communities for a sustainable peace building.

Legal Factors of Somalia

USAID (2014) reported that it has been keeping continuous cooperation and support to Somalia with the aim to unification, rebuilt and quick recovery of the economy by attracting foreign investors and improving job opportunities, but its legislation related to the business and commercial climate made it difficult to put the country in an international standard.

The commercial law of Somalia is very weak and conflicting in nature and does not provide safeguard to the business transactions; though, there are some provisions, but in practice, it is difficult to execute any business contract of agreement with the Somalia companies.

Moreover, protection of property, weakness in export or import, indemnity to the elites, corruption, lack of protection to the investors made it difficult for a safe business with the old business communities, but the newly managed business organizations are comparatively less corrupted and have honor to the international trade practice; therefore, they kept hopes of doing business in this region.

Pro-Forma Income Statement

The marketers assume that BMW would be able to make profit from this new market and it would gain $704,152 in 2015; however, the next table gives more details:

Table 6: Income Statement

Source: Self-generated

Possibility & feasibility of financial, distribution, & marketing partnerships

Table 6: Possibility and feasibility

Source: Self-generated

Key reasons to enter the market

It is important to note that the company has presence almost in every part of the world; in fact, it has begun its operations in most of the African countries as well; as a result, Somalia remains to be the key choice to enter because BMW has no operations there. In addition, the above economic, social, and demographic discussion demonstrates that Somalia is a prospective country for maximizing profit.

Three potential risks of foreign market expansion

Table 8: Three potential risks and strategies

Source: Self-generated

Three potential benefits of foreign market expansion

Table 9: Three potential benefits and strategies

Source: Self-generated

Two ways in which you would adapt the operational strategies

With vulnerable socio-economic condition of Somalia, BMW is going to take entry in this market and to do so BMW would identify a potential importer who would be financially solvent and capable to distribute BMW cars nationwide (Keegan & Green, 2013); therefore, it will use import strategy to enter this market.

To identify such potential dealer, BMW would communicate with the ‘Somali Chamber of Commerce’ and serve general letters to the SCCI members to apply for dealership with their present business profile and some copy of previous letter of credit in order to prove their potentiality, from the applicants, the company would select one distributor to enter in this market.

Reference List

BMW (2014).International success: The BMW Group. Web.

BTI. (2014). Somalia Country Report. Web.

Cain, T. (2012). Luxury Auto Brand Market Share In America – February 2012. Web.

Indexmundi: Somalia Country Report. (2014). Web.

Keegan, J. & Green, M. (2013). Global Marketing. London, UK: Pearson

Ranker (2014). Full List of BMW Models. Web.

Simoes (2014). Country Profile of Somalia. Web.

Trading Economics: Labor force – total in Somalia. (2014). Web.

USAID. (2014). Assessment Report Somalia Economic Growth Strategic Assessment. Web.

Young, H. (2014). Driven by unemployment, youth in Somalia turned to piracy as a solution. Web.

Searching for BMW case study essay to get inspired? Look no further! This BMW marketing strategy case study analyses the company’s strategic management and the approach to customer segmentation.

Introduction

BMW is one of the most recognized brands in the world. It is at the echelon of the automobile industry, producing products that are known for a combination of quality, utility, and style. Customer segmentation is a management factor that all companies should consider in their marketing strategy. This case study analysis attempts to examine the BMW brand and its approach to market segmentation to expand its automobile sales.

BMW Case Study Summary

BMW developed into an international automobile company after World War II and achieved tremendous success by the mid-20th century. In 2012, it had international sales exceeding $106 billion (Kotler & Keller, 2016). The BMW is an instantly recognizable symbol, a tribute to the company’s early days as an aircraft manufacturer. Originally, BMW attempted to appeal to baby boomers, producing sports sedans that were luxurious and demonstrated high performance.

This became the 3, 5, and 7 series which were a similar design in different sizes. At the beginning of the 21st century, as consumer needs shifted, BMW began to introduce a wide variety of other vehicles, ranging from premium SUVs to convertibles and roadsters, as well as cheaper compact cars in Series 1. BMW offered options to family-oriented consumers, wealthy conservatives that sought luxury, and those needing bigger cars for outdoor activities, as well as those seeking highly flamboyant vehicles.

BMW Case Study: Defining the Issue

BMW utilizes various advertising tactics and methods but has continued to employ the tagline “The Ultimate Driving Machine” since 1974. It has seen a steady increase in sales in the US and focuses on emphasizing quality rather than status. BMW consumers usually demonstrate loyalty, but the company seeks to attract new customers. The marketing issue for investigation is whether BMW adequately segments the consumer base and how well it employs marketing to each group. BMW’s marketing strategy will be examined, and recommendations provided for potential improvement.

Consumer Segmentation

BMW generally uses a mono-segment marketing position that appeals to a single customer segment of relatively wealthy individuals. Most of the automobile lineup which BMW offers consist of luxury vehicles, and even its Series 1 is priced at the higher end of the mid-range sedans. The company simply does not offer budget vehicles that may be appealing to individuals and households with income below the upper-middle class. Despite this, BMW most likely uses a post-hoc segmentation approach which analyzes marketing data after sales to determine its customer clusters and category management. Segmentation is based on consumer preferences, which consists of product evaluation.

In an automobile, this includes aspects such as price, performance, ecological features, and reliability. These help to shape criteria that are used during automobile selection. The preferences are vital in constructing the additive value function which is a major method of determining utility for various customer segments (Liu, Liao, Huang, & Liao, 2018).

As mentioned in the case study, BMW offers a variety of cars that may fulfill the distinct needs of its consumers. Each of the car types it offers such as sedans, SUVs, or roadsters all have several vehicles in the series which gradually increase in price and feature offering. BMW actually segments the premium market by finding a balance between purchasing behavior and marketing mix and responding appropriately to value and consumer trends. However, the brand does not compromise and cater to most segments but adopts a marketing strategy that focuses primarily on a premium target market (Yuying & Qingrun, 2018).

The primary consumers of BMW vehicles are men aged 30-50 with higher levels of income. This segmentation works for BMW as it attempts to maintain its status as a luxury car manufacturer. With BMW combining luxurious superiority with performance and reliability, the company positions itself to appeal to upper-class customers that will appreciate the masterpiece and symbolic nature of its highly technological automobiles. Therefore, BMW establishes a particular value to its product which is reflected in both pricing and marketing strategy.

BMW Marketing Strategy

BMW focuses its marketing efforts primarily on premium segments with the purpose to define luxurious brand identification of its vehicles. The focus on affluent customers in the majority of its marketing for the 3 through 7 series has demonstrated the success of this approach. BMW positions itself as a leader in the industry through innovation. This may range from clean energy engines to complex electronic systems in its cars. The company builds its value and competitive advantage on the innovation concept which is reflected in its global marketing strategy (Dong & Koo, 2018). In other words, the development effort, components, and performance that is input into BMW cars are reflective of its value, justifying such price tags.

The luxury product market continues to demonstrate significant growth year over year, despite any economic downturns in the last decade. Premium vehicles such as BMW base their segmentation and marketing on the concept of scarcity.

Consumers purchasing luxury products are buying into the dream and exceptional quality. BMW takes advantage of this by adopting a “masstige” approach, combining the prestige of its automobiles with mass marketing strategies to achieve a high level of sales. Premium products directly impact the psychological concepts of self-esteem and social recognition. The consumption and possession of premium brands are associated with pleasure and a range of other emotions which consumers pursue as part of increasing or upkeeping their social status (Chandon, Laurent, & Valette-Florence, 2016).

Based on this, BMW began to test a new slogan of “sheer driving pleasure” in limited markets to attempt the transition of marketing focus from performance alone to the emotional appeal of its luxury brand. While the iconic “ultimate driving machine” may be successful, it may be viable for BMW to eventually change its slogan. The current slogan appeals to its primary demographic of wealthy men but fails to capture other market segments such as women, young adults, and those without such great enthusiasm for cars. The emotional marketing approach is closely relatable with individualism, a coveted value for United States consumers.

Emotional paradigms contribute to the cultural entourage and social constructs of a vehicle (Lutz, 2015). By integrating its quality and performance into emotional marketing, BMW can capitalize on its widely known brand and enhance consumer communication. BMW can improve its marketing strategy and adopt new consumer segments by combining emotionally sensual marketing with premium performance. The two concepts are inherently synergistic and would allow for BMW to maintain a leading position in the industry.

BMW Case Study Solution & Recommendations

In addition to using the emotional marketing appeal, BMW should seek to expand its consumer segments. This is particularly important in light of potential economic downturns and expansion into developing countries where average incomes are significantly lower than BMW’s primary markets of North America and Europe. One recommendation would be to expand its lineup to include more budget-oriented cars that maintain a similar level of quality, safety, and performance. This would be in line with BMW transitioning its focus from class to performance as mentioned in the case study.

It would attract a significant market segment from middle-class households who would now be able to afford a BMW automobile which does not sacrifice much in terms of performance, only luxury. However, this decision should be taken into consideration of the long-term commitment of the company since it would dilute the premium status of the BMW brand. Even now, driving one of the cheaper series of BMW is considered far less prestigious than its luxury sedans. Expansion into new segments will present challenges with both advertising and competition.

BMW should keep track of changing consumer trends, diversity, and social opinions, basing its advertisement strategy on appealing to a wide variety of the market, even those that may not be able to afford its cars. The BMW brand image is distinguished and synonymous with prestige, quality, and performance. The company’s further strategy should encompass significant investment into technologies such as clean energy and self-driving cars, and reflect this in their marketing campaigns which position BMW as an innovator in the industry.

Conclusion

BMW is a global automobile brand that produces and sells premium-level vehicles. Its primary consumer segment consists of affluent individuals and the car lineup is designed to meet the demands of this market segment. BMW bases its marketing strategy on innovation and performance, taking advantage of its luxurious brand name to emphasize quality and scarcity. While this marketing strategy has been successful, it may be viable to modify the approach by using emotionally sensible marketing and introducing low-end vehicles with a similar level of quality in order to expand its consumer segments.

References

Chandon, J.-L., Laurent, G., & Valette-Florence, P. (2016). Pursuing the concept of luxury: Introduction to the JBR special issue on “Luxury marketing from tradition to innovation.” Journal of Business Research, 69(1), 299-303. Web.

Dong, H. B., & Koo, J. (2018). Conspicuous and inconspicuous luxury consumption: A content analysis of BMW advertisements. Reinvention: An International Journal of Undergraduate Research, 11(2). Web.

Kotler, P., & Keller, K. L. (2016). Marketing management (15th ed.). London, England: Pearson.

Liu, J., Liao, X., Huang, W., & Liao, X. (2018). Market segmentation: A multiple criteria approach combining preference analysis and segmentation decision. Omega, 83, 1-13. Web.

Lutz, C. (2015). Marketing car love in an age of fear: An anthropological approach to the emotional life of a world of automobiles. Etnografica, 19(3), 593-603. Web.

Yuying, A. & Qingrun, R. (2018). Global marketing strategy of BMW. Web.

Introduction

BMW is one of the leading carmakers in the world. It is an established brand, which is especially popular among high-income customers who want their cars to be functional, good-looking, and expensive. In the first decade of the century, the company has managed to grow sufficiently. Despite the fact that it maintains its competitive position in the luxury car market today, there are significant issues that affect the company’s popularity and profitability. In this essay, I will show that BMW’s place in the automobile market is likely to suffer in the next few years.

Design Issues

Some of the main issues that have an adverse effect on the company are its risky moves with regards to new model development. It is no secret that the competition in the luxury car market is high and the companies do everything in their power to attract customers by releasing new models and improving old ones. However, not all of the BMW models released in the past few years were as great as the executives had probably hoped. For example, models from BMW 1-series, both old and recent, have received a lot of critique from customers and reviewers. The 2016 release of the 1-series was aimed at correcting the problems that the customers found in its predecessor (Knapman par. 2). However, the model still had some significant drawbacks to its design. For instance, the car is not as spacious as other cars of the class: Knapman notes that the rear middle seat is narrow and uncomfortable, door openings are small, and the trunk section is not spacey enough to carry family luggage (par. 3-5).

One of the most significant aspects of luxury car models is their comfort; people who buy expensive cars want to be able to drive them without feeling tired and uncomfortable. However, this might not be the case with BMW 1-series: poor road noise suppression and firm seats may affect the comfort of both the driver and passengers (Knapman par. 7-8). Moreover, the rear window is small, which makes reversing and parking more difficult for the driver (Knapman par. 13). Overall, despite the fact that the model was intended to improve on its predecessor, the design failures make it less appealing to the buyers, hence affecting the brand’s overall popularity. Knapman notes that the original 1-series model was “cramped and uncomfortable, but it still found plenty of buyers because it had that desirable BMW badge on its nose” (par. 1). Nevertheless, given the overall drop in satisfaction levels, it is likely that the brand name will lose its effectiveness in attracting customers in the future.

Reliability Issues

Another important issue that BMW has recently encountered concerns its reliability. Both new and old models produced in the last years show a decreasing level of customer satisfaction, particularly due to the frequency of maintenance. Reliability is also an important factor for customers looking to purchase a luxury car. The models offered by luxury brands are usually a lot more expensive than medium-class cars, such as Ford or Toyota, and the cost of their maintenance and replacement parts is much higher, too. This means that customers have certain expectations when buying a higher-class car, and any reliability issues are likely to affect the brand’s reputation in the worse way possible. One of the most recent examples of BMW’s safety issues is the N47 diesel engine failures. Despite the company’s attempts to address the problem, which dates back to 2007, when the newly-created 2.0-liter diesel engine was fitted to a wide range of BMW models, owners all over the world still report failures (Briscoe par. 5-6). The failures cause the engine to stop working abruptly, both at low and high speeds, posing a threat to the user’s safety (Briscoe par. 6). Moreover, the cost of repairs for this type of malfunction is quite high, since a replacement engine could be worth up to €6000, which is “Bad enough if you had bought the car from new, but disastrous if you were a second-hand buyer on a tighter budget” (Briscoe par. 6). The issue resulted in a lot of complaints and eventually led to several lawsuits, which affected the company’s reliability in the customers’ eyes.

Conclusion

Overall, both issues are likely to have an increasingly adverse effect on BMW’s sales in the future. Some of the outcomes have already hit the company, as it reported a decrease in both annual and monthly sales in December 2016. Press Club USA says that “the BMW Group in the U.S. (BMW and MINI combined) reported December sales of 37,493 vehicles, a decrease of 5.4 percent from the 39,634 vehicles sold in the same month a year ago” (par. 4). Even more notable are the company’s annual sales, which were 9.5% lower compared to the previous year (Press Club USA par. 1). The customers’ opinion of the brand’s reliability is also worse than of other luxury car providers: Knapman states that BMW was marked BMW was 13th out of 26 in the 2014 satisfaction survey, whereas the company’s primary competitor Mercedes-Benz was in the third place (par. 20). If the issues are not addressed properly, the company’s popularity will continue to drop, resulting in a decrease in its profitability.

Works Cited

Briscoe, Neil. “BMW’s Timing Chain Problem Comes Back to Haunt Carmaker.”The Irish Times, 2016. Web.

Knapman, Chris. “BMW 1-Series Review: Better Than an Audi A3?”. The Telegraph, 2016. Web.

Press Club USA. “BMW Group U.S. Reports December and 2016 Sales.” BMW Group, 2017. Web.

Introduction

Success in a company depends on the quality of the strategies that the company management put in place. Notably, the company strategies could be modified from time to time to make the respond to the company’s physical and economic environment. Often, rigid management strategies may not led to organisational prosperity because such policies cannot help the company during international financial dilemma.

Therefore, the paper presents the strategic analysis of BMW Company, point out the organisational strategic capability and the stakeholder expectations. It also discuses impacts of external environment on the company strategy before giving the strategic alternatives and recommendations. Finally, the paper presents swot analysis and strategic options then a conclusion.

Overview of the BMW

The company is multinational, meaning that it has outlets in many countries around the globe. In other countries such as South Africa, the company has become so popular due to its involvement in corporate social responsibility (Eichier 2011, p. 2).

For many years, since its inception, the company has witnessed tremendous growth with a sales turnover of about 1.46 million cars in 2010, posting an increase of 13.6 percent from the previous year (Eichier 2011, p. 3).

Strategic Analysis

The company positions itself strategically to reap from the growing world market in other places, especially the Asian market. This could be realised from the global market recovery (Barney & Hesterly 2009, p. 41). Though the strategy focuses on the emerging markets, Europe and the United States basically remain the primary targeted market for BMW products (Eichier 2011, p. 3).

The management of the company understood the fact that the global market would develop and that it was necessary for the company to be innovative and develop strategic policies to remain viable in the market. This is justifiable by the positive feedback that the product’s users have shown over a long time as well as the company strategic and development policies (Besanko, Dranove & Shanley 2004, p. 55).

Notably, the proliferation of cheap models in the market affected the strategic operations of BMW, yet the company still command a large number of potential high class buyers (Diana 2011, p.12).

The products were comfortable for people in the top market, thus the company maintained this market through changing the operation strategies that allowed it to reduce their cost considerably, without affecting its profitability. Therefore, the strategic planning that the company has employed has been instrumental in maintaining the brand’s name and success around the globe (Global Autos, 2009, p. 8).

The strategic operations of the company has targeted European, America and Asian market has become a priority for the company because of the purchasing power of the people in such areas, leaving the majority in developing countries to opt for relatively cheaper models from other companies (MarketWatch, 2008, 16).

This approach although important, threatened the strategic operations in the company because the middle and low income population form the majority, thus BMW could not attract them to buy its cars.

In fact, the company found it extremely difficult to shift its strategic policies to manufacture cars that could be affordable to the masses (Diana 2011, p. 14). This was because its strategic planning continued to focus on improving the quality of the cars, thus translating to increased cost of acquiring the cars.

With the upcoming of Toyota and its cheap models, the strategy and priority of BMW’s management will be to develop quality cars, which are relatively affordable to a large number of people from the UK, US, Asia and other parts of the world market (Elop 2011, p. 17).

The Organisational Strategic Capability

One of the strategic capabilities lies on the company’s stability that has enabled them to get financial assistance from the global financial institutions. This has become possible due to the increasing favourable capital conditions.

Since the company was able to come out of the global crisis and regain its position to even a much better level, it has created a reputation among the public, thus showing the organisation’s capability and strategic management (Muller & Lechner, 2005, p. 66).

The second strategic capability of the organisation is its focus on premium brands, which are very strong (Eichier 2011, p. 4). This creates special preference for the brands across the world, especially among the middle and high income class. Notably, these groups of consumers prefer durable products that the company is capable of producing.

Certainly, the company looks into the future with confidence because its premium models present an excellent growth projection in the core European market zones and in other parts of the globe (Eichier 2011, p.5). As a result of their quality, premium cars have great demand because they present individuality and a sign of affluence.

The other strategic capability of the company is its ability to use the modern and appropriate technology in manufacturing the cars (Datamonitor, 2011, p. 25). As a result of technological application, the company produces the state-of-the-art cars that appealing to the potential users.

Moreover, the company employ the finest engineering techniques in its manufacturing and most of the workers are of top quality and with relevant experience in car making. This is a strategic capability that the organisation uses for its progress and further success.

Expectations of Stakeholders

There are various expectations of the company stakeholders. For instance, the car users expect efficient dynamics and efficient engines (Eichier 2011, p. 4). This efficiency makes the cars dependable among the high class people who are driven by reliability. Indeed, efficient engines last long and not prone to frequent breakdowns making the people of higher social status to prefer the BMW models.

The customers also get attracted to the charisma that is associated with the desirable brands among the people sharing similar social class (Verlag 2011, p. 18). This consumer expectation must always be upheld o make sure that they become emotionally connected to the brands.

Often, the consumers are pleased about the quality and the level of innovation used in creating the different brands of BMW, which are of premium status (Eichier 2011, p. 4). When the car quality meets the customers’ expectations, they become willing to pay more, and this is the reason justifying the preference for the cars among the people of high social class.

Secondly, the consumers expect emotional value-addition and since the BMW models offer such qualities, they are more likely to identify with the company products than hoping for alternatives (Eichier 2011, p. 4).

Impacts of External Environment on the Company Strategy

The environmental analysis is very critical to the company as it could lead to prosperity or affect the operations at the organisation. Obviously, the company has both internal and external environments, which interrelate to make it either fail in its objectives or be successful. For this case, the focus is on impacts of the external environment on the company strategy (Elop 2011, p. 21).

Since the BMW products came into the market, the company started interacting with the external environments, which had great affect on its strategic operation. Some of the company cars were specially designed for those who like luxury and provided them with the comfort they desired.

The slogan for the product is “Premium segment will continue to grow” (Eichier 2011, p. 5). Eventually gave birth to the premium brands, which began to be used as the common trade name of the company. Notably, BMW brands gained acceptance and popularity in the market and high income people all over the world began to use them as the preferred cars.

As a result, it increased the company interaction with the external environment that interfered with the ethical relationships among the internal players, by exerting pressure and influence on the company operations (Iancu, Popescu & Popescu 2010, p. 253).

The external environment that affected the operations at the company included the competitors, customers, suppliers’ attitudes and the government influence. The major competitors of the company have been Toyota, and Mitsubishi. Literally, Toyota exited the global market because of its cheap cars, which interfered with the internal operations of BMW.

For instance, since Toyota cars are cheap, they have dominating thee market. However, BMW brands are still globally recognized brands because of their high quality and unlike Toyota; the company manufactures a range of luxurious cars to suit the high class in society (Porter 1985, p. 105).

The other external environment that had relative influence on the company strategy was the consumers and suppliers. The products and services that the company offered have, for a long time, been both innovative and stylish so that they could satisfy the market demands, thus attracting many users who specifically preferred them to other brands (Johnson &Whittington 2005, p. 46).

The suppliers were also part of the external environment that played a role in affecting the strategic operations of BMW. Though the suppliers maintained the operations of the company through supplying the materials needed for manufacturing the cars, the management of BMW had to uphold the company strategies so that it could minimise the affects on the company (Pettigrew & Whittington 2002, p. 32).

The suppliers and distributors also found the products to be of high demands, thus able to sustain the supply to and distribution from the company respectively. Definitely, the products gave the company the necessary mileage to become one of the most recognized brands all over the world, in the motor industry.

In marketing, the influence that the government exerts on the business in terms of the rules and regulations affect the company operations makes the latter changes its strategic approach to the company operations (Steinmann & Schreyogg 2005, p. 34).

For example, the government might initiate market regulations, which are thought to be important for the management of the company in the coming years, yet such regulations may turn to be inappropriate for the organisation. Therefore, the company had to develop strategies to exploit the market in order to make the brand more visible (Pettigrew & Whittington 2002, p. 33).

Strategic Alternatives

One of the strategic alternatives is that while understanding that Competition from the rival companies is ever rising over the years, BMW should be able to counter this assumption through strategic planning, enacting strategic policies. Secondly, the company should embrace the improvement of technological application.

Therefore, the situation calls for a proper evaluation of the strategies that the company intends to capture the top market in order to avoid failures (Bazerman & Banaji 2004, p. 114).

Strategic Recommendation

The main strategic recommendation for the company is to focus on manufacturing luxurious cars of premium quality at relatively lower cost to attract the prospective buyers who are only limited by their level of income (Hosmer 2007, p. 26). This would be the sure way of achieving success in the company.

Therefore, in cases were the external environment posed a great threat to the internal affairs and strategies of the company, especially this engaged in the car manufacturing industry and market, the management should adopt competitive policies, which would help it fight off the competition in the market (Clegg, KornBerger & Pitsis 2005, p. 23).

Certainly, this would lead to the advancement of innovative products and the use of effective marketing strategies to minimise the affects.

SWOT Analysis

Strength

The company is the leader in the global premium car market. Basically, it draws its strength from the revelation that the premium products will continue to stay in the global market. The second strength is that those high quality products such as the BMW cars will maintain and possibly increase growth internationally.

The other factor that strengthens the operations of BMW is rate increase rate of growth of premium cars compared to the ones of demanded in mass market (Mintzberg, et al., 2005, 48). The company has various product ranges to offer. Moreover, it places special importance on technological development of the various segments such as the cars and big vehicles. T

he company thrives on innovation. BMW has well-developed marketing strategies. The company management is experienced in the car manufacturing sector, thus gives hope for its development (Palmer &Hardy 2000, p. 49).

Weaknesses

The prices of the products are on the higher sides, thus blocking other interested buyers living in the lower income category. The economic conditions in the Europe, America and Asia, which constitute the larges and primary market, have deteriorated in recent years due to unprecedented financial crisis (Loch et al., 2010, p. 102).

Indeed, such changes have affected the operations at the company, and have contributed to its weaknesses. The company has not been able to promote its other products other than the small cars segment, thus not been able to attract a larger market from the business communities using large tracks.

Opportunities

The high-class population in the Europe, United States, Asian and the rest of the world is increasing, thus the company is sure to receive pressure due to probable increase demand the product in the coming years. Technology in the company has also developed indicating that the company will benefit from promotion (Kotler, Berker & Bickhoff 2010, p. 37).

The emerging world market provides a great opportunity for the company on a global platform. The company’s incubation of efficiency dynamics presents and opportunity for future growth. In addition, the company has established market in many parts of the world that forms its security and opportunity for further development.

Since the world grows towards low carbon dioxide cars, the company has opportunity for future growth because its cars low emission of carbon dioxide (Audi 2007, p. 601). Furthermore, the people always demand luxury, and since most of the company cars depict this quality, it has opportunity for further growth and development.

Threats

The rules and regulations of the car industry have changed, thus provides a challenge for the company. There has been a rise in regional and international competitors such as Toyota, Mitsubishi and others.

The price of raw materials for manufacturing cars is expected to rise in the future, thus threatens the company operations. The other threat to the company includes the lifecycle factors, global economic downturn, international depression and financial crisis among others (Brenkert 2010, p. 704).

Strategic Options

As the company strive into the future, it should take keen interest on a number of strategic options. For example, the company should focus on global economic development so that it could change with the trends. This is important for the company’s success in all its business initiatives.

Secondly, the company should strategically monitor the global monetary policies so that it could adjust based on the provisions of such regulations. The company should also be able to detect international weaknesses and capitalise on them.

This strategic option indicates that the company has to be agile and flexible in its operations so that it could capitalise on global business dynamics. The company should avoid unnecessary sceptics in its strategic mission. This means the company could change its mode of operations to suit the state of economic affairs.

Conclusion

In summary, BMW Company has been greatly successful due its strategic approach and innovation of luxurious cars. Indeed, this has enhanced the organisational strategic capability and promoted the stakeholder expectations about the company products.

Through the company’s strategic policies, adoption of technological ways of manufacturing cars, BMW has been able to produce high quality cars, which meet the consumer demands. This has also helped the company to minimize the impacts of external environment on the strategy. Finally, thought the company has weaknesses and potential threats from the competitors, it relies on its strengths and the opportunities in the global market.

References

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Executive Summary

This paper primarily delves into the topic of CSR implementation in BMW and GM and the inherent differences between the two. When it came to implementing CSR on an operational level such as in its outsourced manufacturing plants or in its corporate decision making capabilities, there was evidence of a distinct lack of CSR on the part of GM.

BMW on the other hand did suffer from some of the same setbacks but did have considerably better CSR integration as evidenced by its factories which had better conditions for its workers and were less susceptible to environmental degradation.

Introduction

Corporate Social Responsibility (CSR) can be described as the process wherein corporations incorporate ethical methods of operation, aside from their profit oriented structure, into their business model.

This process involves the addition of ethical business practices, contributing towards community and social development as well as taking a long term stance towards helping members of the local community that a company finds its operations in (Homburg, Stierl & Bornemann 2013).

Graphic 1

Brief Information about General Motors and BMW

GM (General Motors) and BMW are two of the largest automobile manufacturers in the world and have been noted as being two of the most highly regarded companies when it comes to CSR practices. GM established the GM Foundation that contributes millions of dollars a year in reforestation efforts as well as in educating children in economically disadvantaged communities.

BMW on the other hand is tied in the number one spot for CSR Company of the year for 2013 with other companies such as Disney, GE, etc. Both companies have been noted as having stellar CSR programs in place when it comes to assisting a variety of communities.

In the case of GM and BMW, this manifests in acutely similar methods of CSR implementation. For instance, GM and BMW both implement a culture of open communication and ethical treatment of employees from both a factory level to those belonging to members of upper management.

This manifests itself in some of the best health insurance policies money can buy, maternity leave benefits, continuing education benefits (i.e. paying for the employee’s education) as well as benefits related to creating a business environment that is ethically oriented via corporate social responsibility directives and internal HR personnel whose jobs focus on ensuring the development of ethical behaviours within the company.

The end result is that employees within GM and BMW are treated equally and fairly resulting in the creation of an ethical work environment that facilitates moral decision making within the company (Glavas & Kelley 2014).

Based on an evaluation of the current production infrastructure of GM and BMW, it was determine that the framework for analysis will focus on the Triple Bottom Line and the category “Caterpillars” which defines a corporations activity as being relatively local on its impacts, single minded, ultimately unsustainable, capable of change, already operate in sector where others have evolved.

This particular framework was based on an examination of the operations of GM which was evaluated as being unsustainable in the long term.

Business Ethics

Business ethics can be described as the ethical framework that a company abides by when it comes to its operations. This encompasses not only in the way in which it sells its products but the manner in which it manufacturers them and how it addresses the long term impact of the company’s operations on society and the environment.

For BMW, one of the manifestations of business ethics the company has shown comes in the form of its various charitable donations wherein it has given well over $30 million to educational campaigns, community development initiatives and has even backed various art projects.

The same can be said for GM wherein the company has given well over $25 million over two decades to various charitable organisations through the GM Foundation. Other aspects of adherence to proper business ethics in the case of GM and BMW takes the form of their current development cycle where an emphasis has been placed on developing products that are considered to beneficial to the environment.

Hybrid vehicles, hydrogen fuelled cars as well as more fuel efficient vehicles are some of the products that have been developed within the past decade due to the current internal consensus within the companies that ecologic sustainability should be focused on (Schmeltz 2014). While the CSR programs of both companies are widely lauded for their contributions and a focus towards community building, from a business ethics standpoint there are some issues that need to be taken into consideration.

For instance, despite its much vaunted CSR programs which contribute towards reforestation, GM has actually been accused multiple times by the EPA (Environmental Protection Agency in the U.S.) as well as various environmental rights groups due to its operational activities that contribute towards environmental destruction (i.e. release of pollutants into the air, improper disposal of industrial waste, improper usage of dangerous chemicals etc.) (Hack, Kenyon & Wood 2014).

In comparison, BMW has been recognised since 2012 as the world’s most sustainable automotive company in relation to its production process, its emphasis on recycling and lower emissions on its factories and vehicles as well as its emphasis on better treatment for its workers. From this particular standpoint, it can be seen that BMW is “ahead” so to speak when it comes to its adherence to CSR standards.

It should be noted though that adherence to environmental sustainability is not wholly indicative of a company being better than the other when it comes to CSR. The difference between the two operations matters since it showcases what can be defined as a case of corporate “white washing” which is a practice where corporations showcase that they are behaving in an ethical fashion and contributing towards social and economic gains when in reality this aspect is merely a façade and is not a reflection of the entirety of the company’s operational activities (Sadler 2003).

This is particularly important to take into consideration since “whitewashing” merely implies that a corporation is attempting to be more sustainable but in the end its operations are not directly affected resulting in unsustainable practices. It is based on this that the next section will delve into a comparison of their management techniques and their measurement based on G3 guidelines.

Comparison of Management Techniques

Business

Businesses under the triple bottom line focus on the economic benefit that a society gains from the business operating within that particular sector (Werhane & Freeman, 1998).

While this aspect does include financial culture to a certain extent, this paper will focus primarily on factors related to the corporate culture towards sustainability that GM and BMW adopt, the aims of their current corporate strategies (i.e. are they focusing towards sustainability) and the possible routes towards sustainability that they are focusing on.

GM

Corporate Culture towards Sustainability

The primary focus of GM’s corporate culture towards sustainability focuses primarily on energy savings and waste reduction in its factories. So far, the company has been able to save $20 million in energy costs per year due to waste saving measures (Korschun, Bhattacharya & Swain, 2014).

Aim of current corporate strategy (i.e. focus towards sustainability or not)

Based on an evaluation of GM, the focus is towards sustainability, however, it is oriented more towards cost savings than due to CSR.

Possible routes towards sustainability

One of the current endeavors that GM has been focusing on when it comes to more sustainable practices takes the form of developing alternative fuel vehicles that would help to lower dependence on fossil fuels (Korschun, Bhattacharya & Swain, 2014).

BMW

Corporate Culture towards Sustainability

BMW’s current corporate culture towards sustainability focuses primarily on ensuring the company has a small environmental footprint due to its operations. This comes in the form of:

a.) Lowering the use of and the diversity of the resources that goes into its products to ensure sustainable extraction processes

b.) Making sure that the materials that go into their vehicles are recyclable during their end of life phase

c.) Avoiding almost all usage of environmentally damaging materials during the production phase

d.) Researching new methods of car development that are in line with lower pollution rates and are more viable in terms of resource utilisation

Aim of current corporate strategy (i.e. focus towards sustainability or not)

The current aim of the corporate strategy of BMW is a focus on sustainable production processes as well as the creation of cars that have a minimum adverse impact on the general environment. This aim manifests itself in the fact that cars from BMW are regularly stated as being some of the most fuel efficient cars in the market.

Not only that, the company is actually tied in first place with several other corporations (i.e. Disney and others) as being one of the most sustainable companies in the world that implements proper CSR practices in nearly all levels of its operations (Korschun, Bhattacharya & Swain, 2014).

Possible routes towards sustainability

The main route that the company will focus on when it comes to sustainability takes the form of the various fuel efficient and alternative fuel vehicles that it is currently developing. These come in the form of its hybrid cars, hydrogen powered cars and even electric powered cars that have a far lower environmental impact as compared to cars that are primarily powered via fossil fuels. Though it should be noted that due to the current development cycle of the company, these cars are still in the testing phase, however, BMW is orienting itself to primarily produce such vehicles due to its focus on sustainable corporate activities.

Social

Under the social aspect of the triple bottom line, businesses are evaluated based on their impact on the individuals within a company (i.e. the employees) and the people that are outside the business (i.e. members of the local community).

Thus, when it comes to evaluating the adherence of a business to the concept of CSR, the social aspect of the triple bottom line examines whether a business is operating in a way that benefits the local community and that people within the business (i.e. the employees) are not being endangered or exploited in any way shape or form through normal company operations (Burlingame & Young 1996).

Thus, in this section of the examination between GM and BMW, what will be examined are factors related to wages, working conditions, labour utilisation during operations, and the contribution of either company towards the living standards of the local communities in which they operate.

GM

Wages

When examining the wage scale for employees at GM, it was noted that entry level employees at the company earn an average of $19.28 per hour and were given a $5,000 signing bonus once they are formally made employees of the company.

Aside from this, GM also provides $4,000 per year in inflation protection for its employees. In comparison, the average minimum wage salary within the U.S. is $7.25 per hour for entry level positions within a company. From the perspective of Meiners, Ringleb & Edwards (2000), when it comes to triple bottom strategies, wages are considered one of the first indicators of adherence to proper CSR strategies since people have a right to what can be defined as “a living wage” (i.e. the amount needed to be able to survive).

When examining the case of GM, it can be seen that it adheres to this concept by providing wages that are more than half of the prevailing minimum wage rate for entry level employees which enables them to have a comfortable living.

On the other hand, it should be noted that when it comes to the scaling of the wages, it was noted by Rahim & Alam (2014) that GM did not scale the income levels of its workers proper wherein factory line workers rarely, if ever, reached the first tier of salary payments which encompass $30 to $40 per hour.

Instead, wages are scaled based on company metrics wherein the difference in wages between an entry level factory worker and someone that is experience is basically $1.

Working conditions

The analysis Rahim & Alam (2014) of explained that workers within the various international factories of GM are subject to dangerous working conditions. In fact, a recent explosion in one of GM’s factories in China showcases the lack of sufficient safety protocols, insufficient installation of safeguards as well as a lack of protection for workers at the company for the various chemicals and fumes they are exposed to.

The end result was that even the Chinese government which is known to turn a blind eye towards the implementation of safety protocols in factories actually prevented the expansion of GM’s factory in Shenzen due to safety concerns.

Labour utilisation during operations

One of the main problems with the labour utilisation of GM is that workers within its various factories have been noted by Wagner, Lutz & Weitz (2009) as being overworked and underpaid as compared to their counterparts in the U.S. The case of GM in Mexico shows that workers are paid $4 an hour and are subject to 12 hour work shifts in order to keep up with the production demands of the company.

While this is higher than the standard minimum wage within Mexico (86 pesos per day), the fact remains that wages paid do not reflect the skills of the workers and the amount of time put into their jobs. This case is not limited to Mexico but actually extends to its factories in China as well.

Contribution towards the living standards of the local community

The primary contribution that GM has had towards the living standards of local communities comes in the form of its preferential career sourcing that targets local talent instead of bringing in workers from outside the state. This comes in the form of local career fairs, utilising local employment firms and a variety of other strategies that focus on ensuring that members of a local community are hired by the company.

Aside from this, GM also contributes extensively to local education funds so that potential scholars are included under the GM Foundation scholarship program which provides subsidies for their college education. Lastly, the company also contributes to various local environmental organisations that focus on tree planting and other ecologically beneficial operations.

BMW

Wages

In comparison to GM, BMW actually pays its low skilled workers a far lower rate as compared to its German workers in its primary manufacturing facilities in Germany. German workers are normally paid $30 an hour while their American counterparts are paid $15 an hour.

This wage situation is even worse in other countries such as in China where the ages average $3 to $4 for non-skilled employees on the factory floor. While it is understandable given the fact that skilled workers should be paid more, the fact remains that BMW only pays its employees the modicum allowed to place them under the category of having a “living wage”.

This is despite the fact that the company constantly emphasises the fact that it treats its workers fairly.

Working conditions

Based on the examination of Wagner, Lutz & Weitz (2009), it was noted that BMW places a considerable emphasis on the safety and security of its workforce.

This manifests in strict guidelines being enforced when it comes to the condition of its factory in relation to how safe it is to work in it, what methods have been implemented to ensure the protection of the employees that work there as well as avoiding the use of potentially toxic chemical compounds that could cause serious health problems.

Labour utilisation during operations

When it comes to labour utilisation, BMW is often cited as having the best labour conditions in the world wherein the company ensures that workers only work 8 hours a day with substantial increased payments being given if overtime is required due to tight deadlines.

Aside from this, the company also implements a variety of “build from within” strategies when it comes to talent management wherein employees that have proven themselves to be capable hard workers are earmarked for further training and advancement within the corporate ranks of the company.

This adheres to proper to CSR oriented operations since it showcases that the company actually cares about the various workers it hires and focuses on improving the state of its workforce.

Contribution towards the living standards of the local community

The contribution that BMW primarily makes to the living standards of the local community comes in the form of various donations to art and education programs. These scholarships help to support local artists and students in order to promote what is known as “the common good”.

Aside from this, the company often donates money to disaster relief efforts in their regions whenever a natural disaster strikes.

Environment

Under the concept of the triple bottom line, companies attempt to improve their level of environmentally sustainable practices whenever possible (Ottman, 1998).

While this normally comes in the form of reducing the amount of pollution produced by the company, this also manifests in other aspects such as the total lifecycle impact of the products they produce (i.e. the amount of resources used to produce and distribute their products) as well as the environmental footprint of the products they sell.

GM

Methods utilised in reducing pollution

Some of the present day methods that the company has attempted at reducing pollution comes in the form of lowering the energy costs associated with its various factories.

A recent report showed that GM was actually able to meet the EPA’s (Environmental Protection Agency) Energy Star Challenge for Industry which focused on a reduction of a company’s carbon and energy use (Komodromos & Melanthiou, 2014). GM was actually able to reduce its total energy usage in its U.S. based factories by 20 percent within a period of 5 years.

Total Lifecycle Impact of Products

When examining the total life cycle impact of GM’s various vehicle brands, it is noted that other car manufacturers such as Toyota, BMW, Kia and Hyundai have actually be cited as having better fuel efficiency than GM’s vehicles.

While GM has stated that its various vehicles are fuel efficient, independent testing from nonprofit organisations as well as government agencies around the world have shown that they are not as fuel efficient as compared to their counterparts. It should also be noted that in terms of emissions, GM cars are notorious for their high level of emissions (usually due to the size of their vehicles) (Komodromos & Melanthiou, 2014).

Do note though that most of the materials that go into a GM car makes its 75 percent recyclable, a factor often cited by GM, however, they neglect to take into consideration the sheer amount of processing required which would make it more expensive to recycle than to actually make a new car (Komodromos & Melanthiou, 2014).

Taking these factors into consideration, it can be seen that the total life cycle of GM’s products do have a significant adverse environmental impact which impacts its adherence to CSR.

Environmental Footprint

Despite the fact that over 100 of GM’s factories have attained the “zero waste mark” which is a standard for indicating adherence to lower emissions, resource utilisation and waste materials, the fact remains that this is not indicative of all of the company’s operations.

An examination of GM’s operations in China reveal substantial environmentally damaging practices due to high emission rates, improper waste disposal as well as a variety of safety concerns. One of the reasons behind these actions was due to the lax environmental and worker safety standards in China which enabled GM’s operations to continue despite the potential long term damage to the environment.

BMW

Methods utilised in reducing pollution

Based on an examination of the work of Sharma & Khanna (2014) which examined the efforts of BMW towards sustainable operations, it was noted that the company has recently implemented more efficient methods of operation to reduce the amount of pollution its factories produce.

This has manifested in a 60.9% reduction in the amount of waste produced by its global factories that go into landfills, a reduction of 55.1% of industrial waste water that is utilised in its production processes as well as a reduction of 31.3% when it comes to the amount of pollutants it expels into the atmosphere (Weisheng, Chau, Hongdi & Wei, 2014).

Total Lifecycle Impact of Products

Through the analysis of Sharma & Khanna (2014), it was noted that the total lifecycle impact of BMW’s products is actually quite low due to its current focus on environmental sustainability. This comes in the form of utilising recycled and sustainable materials for its cars which helps to lower the overall amount of waste material that the company sends to landfills.

Aside from this, BMW is often cited as having some of the most fuel efficient vehicles in the world which minimises their overall carbon footprint due to lower emissions. Aside from this, the company has also endeavoured to make sure the various parts of its cars are recyclable resulting in a 70 to 80 percent recyclability rate for the entirety of the vehicle.

Aside from this, the company has also implemented a buyback program for its cars which enabled the company to purchase old vehicles back from its consumers and recycle them into new cars. This enables the company to further lower its overall environmental footprint by minimising the amount of waste material that finds itself into a local junk yard.

Environmental Footprint

The factories the company has all over the world conform to global standards in worker safety, environmental preservation and the various workers of the company are actually paid above the going rate as compared to other factories.

As mentioned earlier, the company actually implements extensive emissions testing requirements along with implementing a broad worker safety program that encompasses all its global operations. What this means is that compromises in quality and environmental sustainability due to a lack of sufficient local regulation are not done (Montana & Charnov, 2000).

Instead, the company focuses on creating a sustainable manufacturing infrastructure regardless of the possible opportunities for greater profit via compromises in work safety and environmental sustainability.

What this shows is that the company adheres to proper employee care, community assistance and ensuring the continued preservation of the environment

Evaluation of both Companies

Based on what has been shown so far, it can be seen that GM has issues when it came to proper CSR implementation. While it may be true that the company does have programs in place that apparently show that they are a strong advocates for CSR, when looking at the company from an operational standpoint utilising the information that has been presented in this paper.

It is immediately obvious that CSR implementation under the triple bottom line is lacking when it comes to its manufacturing processes, product life cycle and employee wages. In comparison, BMW has exemplary product life cycles, environmentally sustainable manufacturing processes but has issues when it comes to the wages paid to employees.

Conclusion and Recommendations

In order to orient GM with the proper triple bottom line CSR initiatives, the following are recommended:

1. Increase the employee pay scale to reach $25 to $30 for experienced workers within its U.S. factories as well as increase the pay scale and implement reasonable working hours for its workers in its international factories.
2. Implement better working conditions in its factories located in other countries.
3. Increase observance of environmental sustainability in its foreign factories.

In the case of BMW, the following is recommended:

1. Apply a better pay scale to its employees.

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Appendices

Graphic 1