Bayerische Motoren Werke STRATEGIC OPTION RECOMMENDATION STRATEGIC CYCLE: 2000 – 2005
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Transcript Bayerische Motoren Werke STRATEGIC OPTION RECOMMENDATION STRATEGIC CYCLE: 2000 – 2005
Bayerische Motoren Werke
ST R AT EG I C O P T I O N R ECO M M E N DAT I O N
ST R AT EG I C C YC L E :
2000 – 2005
Te a m M a r s
S p ring2 0 08
Presentation Outline
Introduction
Objective of case study, Company Background
Analysis
X
Y
Addressing the issue, , External and Competitive Environment, Internal
Environment, Rover Venture
Recommendation
Z
BMW’s Mission Statement
To be the most successful premium
manufacturer in the industry.
BMW’s Historical Background
Founded in Munich, Germany in 1916
Initially concentrated on the development &
production of air craft engines - building a reputation
for reliability & excellence
Built its first motorcycle in 1923, and first automobile
in 1928
Main Product Segments
Automobiles
Only auto maker to pursue a purely premium strategy for all market
sectors
Motorcycles
develop and build the best motorcycles, set standards with regard to
technology, environmental protection and safety, and provide
outstanding customer service in the pre- and after-sales phases
Fin
ancial Services
financing and leasing, asset management, dealer financing and company
car pools
Others
Insurance, industry-specific strategy & process consulting, solutions
and IT services
BMW Strategies
Identifying potential and encouraging growth
Knowing what they represent
Recognizing where their strengths lie and making the
best use of every opportunity
Following a clear strategy.
Issue: Whether BMW should remain Independent
External Environment
Competitive Environment
Internal Environment
External Environment
Global Convergence - Downstream and Upstream
globalization in the auto mobile industry
Mergers and Acquisition
E-commerce
Shrinking profit margins
Competitive Environment
Volkswagen
well diversified company
interest in consumer’s finance
automobile rental
General Motors
worlds no. 1 maker of automobiles and trucks
Hughes Electronics, Allison transmission (automatic transmissions)
Gm Locomotives (locomotives and diesel engines), Isuzu Motors (49%), Subaru (20%)
Daimler Chrysler
No. 3 in sales, No. 5 in volume
BMW’s arch rival
successful diversification
Toyota
Lexus, best cost provider strategy.
Internal Environment
Strengths:
Image – distinctive identity, high performance
Labor force – highly skilled and qualified labor force
High profit margins
Brand management and communication – successful
Weaknesses
Technology was advanced but not innovative
Inflexibility
The Rover Venture
Objective
Address their inflexibility, as an attempt to expand
Overlap strategy
Broader geographic market
Downfall
Inadequate manufacturing
Poor profitability
High breakeven point
Quality overlap
Brand exclusivity rather than cost efficiency
Recommendations
BMW should change its corporate strategy of independence;
its size is not big enough to warrant that
It should acquire other brands despite its ruinous Rover
e x p e r ie n c e ; it ’s e it h e r a c q u ir e o r
It should hire experienced managers with an extensive
knowledge in acquisitions and diversification
Recommendations
It should keep pumping $ into R&D in order to maintain its
high margins for its most luxurious models
It should increase its technological innovation so that higher
differentiation can be achieved
It should introduce lower cost models to compete with lower
priced luxury vehicles such as Lexus LS 400
BMW at Present
BMW’s group revenue climbed 14 percent in 2007 to a record
$83 billion ($ 25 billion in 2000)
The group's vehicle sales in 2007 rose more than 9 percent to
1.5 million units (only 820,000 vehicles in 2000)
BMW now owns Mini Cooper, and Rolls-Royce
Questions