Car Manufacturing: The Strategy of BMW

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Introduction

The competitiveness of a particular enterprise is a significant aspect of the organisation’s evaluation since this factor directly determines whether the company can attract consumers and take leading positions in the market. As the corporation under investigation, the world-famous automobile concern BMW is taken. For many years, it has been one of the most famous manufacturers of the vehicles of different formats. It is required to evaluate what marketing strategy the company’s specialists are promoting and analyse its current position and possible prospects in the market to characterise the peculiarities of this enterprise. It is also essential to examine the corporation’s organisational structure to have a full vision of its units’ features the functioning. A careful analysis helps to assess the development prospects and determine which areas of the company’s activities are crucial and leading.

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General Concept of the Company

The BMW concern has been actively working in the field of mechanical engineering for several decades, and during this time, the organisation has earned a lot of positive reviews and prestige in the world market. For all the period, the management of the corporation has managed to develop quite a successful strategy of work that implies several central points. For example, a relatively narrow specialisation of BMW enables the company’s specialists to focus on the production of specific products and do not waste time while working on various additional industries (Galbraith 2014, p. 42). The successful development of BMW proves that the compliance with the stated strategy of work and the emphasis on one sphere of production helps to be among the leaders of the market.

The company is actively developing the direction of sustainability and regularly proves that its market position is stable and practically untouchable. The ratings of the corporation confirm that during its existence, BMW has not lost its popularity among consumers and is still considered one of the leading and popular automobile concerns (Liu 2013, p. 2830). Perhaps, this particular feature is one of the most significant; due to it, the concern regularly receives substantial profits and does not lose its positions.

Also, BMW is considered one of the most actively developing automobile companies (Hill, Jones & Schilling 2014, p. 27). In recent years, the corporation has introduced to the world market some innovative novelties that were created using the most modern production technologies. Regular releases of new products are proof that the company’s management does not aim at conservatism but seeks to improve current performance and achieve even greater recognition. Therefore, the credibility of BMW in the world market is primarily due to the very successful production strategy of this organisation.

Marketing Concept

Promotion is one of the critical processes of almost any modern business. The ability to offer customers quality, reliable and convenient goods is the hallmark of any successful enterprise. Thus, when evaluating the quality of the products produced by the BMW concern, it is possible to say that their goods are of high quality; otherwise, consumers would not buy cars and other vehicles of this company. One of the marketing features of the corporation is offering a wide variety of models, including cheap cars and premium-class automobiles (Turker & Altuntas 2014, p. 840). Nevertheless, the products of the concern cannot meet the needs of absolutely all customers. The production is guided by different target groups, and the company does not produce functional vehicles like minivans, etc.

In the process of work, the organisation’s specialists focus primarily on customers. The so-called core benefits include three main components: reliability, long service life, as well as style and compliance with modern fashion trends (West, Ford & Ibrahim 2015, p. 57). Also, the desire to meet clients and develop new designs and models is a very positive feature of the organisation (Shaw-Taylor & Satchell 2016, p. 67). The ability to adjust to current changes and timely offer consumers the desired product is an integral feature of the company with a competent approach to marketing and business.

Main Production Segments

The concern consists of several subsidiaries that operate according to established activities. In addition to the BMW brand, the corporation owns two more well-known models: small-size MINI cars, as well as Rolls-Royce, that are premium automobiles. Equally significant is the fact that the company not only produces goods intended for regular use but also various strategic facilities and details of the military and shipping industry. However, as Madsen and Walker (2015, p. 91) note, this segment is difficult to assess since enterprises usually do not provide detailed information on the production of such goods. Also, despite the fact that the leading direction of the corporation’s work is the production of cars, the organisation owns the rights to create motorcycles and bicycles, which also brings BMW much income.

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Distribution Network

Also, the company has quite a developed distribution network that consists of many dealers around the world. The delivery of this organisation’s cars is carried out in more than 140 countries of the world (Hwee 2015, p. 37). BMW assembly plants are located in 14 states, which allows quick transporting products to anywhere in the world. The corporation’s activity implies close cooperation with the purchasers of the goods and is developed for the global distribution of this brand’s cars.

Evaluation of the Company’s Competitive Position

The global market is formed due to consumer demand and global trends (Castriotta & Di Guardo 2016, p. 822). Such a corporation as BMW is continually developing and looking for optimal marketing strategies to provide client needs and successfully compete with other major brands. The managers of the organisation take into account regularly changing customers’ preferences and try to calculate the segmentation of the market accurately. It allows predicting not only possible optimal development paths but also the most profitable sales regions.

As it was mentioned earlier, BMW focuses on premium-class industries. However, at the same time, the company is trying to maintain a balance, producing not only expensive car models but also those that are affordable to ordinary middle-class consumers. It allows buyers of different social layers to assess the quality of brand products and, consequently, brings profits to the corporation. Due to the sale of the cars of varying price category, BMW competition on the market is satisfactory. The company is developing steadily and is regularly listed as one of the most influential and respected organisations in the automotive industry. Rapid response to changes in consumer preferences and an emphasis on innovation in production helped BMW become the corporation that was able to achieve high productivity and remain one of the leaders of the world market for several decades.

Possible Problems and Ways to Solve Them

Despite BMW’s success in production and sales, high competition is one of the initial problems that can prevent the corporation from active developing. As a result, the specialists of enterprises may lose the incentive to develop new technologies and lose significant sales areas. However, it is possible to avoid it by resorting to additional advertising that can attract customers and thereby bring back the company’s leading position.

Another possible risk is the release of similar products by competitors at a lower price. According to Nag, Han, and Yao (2014, p. 360), when solving this problem, it is required to calculate all the economic indicators of potential profit and expenses competently since a decrease in the price may cause losses and production costs will exceed sales revenues. An innovative approach to working and improving the technical characteristics of cars may help avoid this problem. If consumers know that the company is working on developing specific indicators, they will likely give preference to BMW rather than to another brand.

Finally, another potential problem is the leakage of qualified specialists. Competition implies a high level of responsibility, and if the company loses professional employees for any reason, the chance to achieve a high sales growth is significantly reduced. It is necessary to provide workers with a full social package, as well as monitor the dynamics of wages in other large corporations to prevent such situations (Dehning 2017, p. 2308). Workers will not leave their places if they know that the organisation cares about them and y promotes their professional growth in every possible way.

Features of Internal Management

President is at the head of the BMW concern. This person is the chief regulatory body and the official representative of the company at any events and meetings with other structural divisions’ members. Also, certain corporate units are managed by directors. There are people responsible for marketing, production, financial activities, as well as specialists in the regional development of the company’s activities.

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Strategic management of the organisation is achieved through the strict adherence to the established scheme of work, as well as the subordination of all structural divisions of the company to the relevant governing body. As Stuetzer et al. (2016, p. 59) remark, the principles of transparency in production make it possible to obtain recognition from consumers and purchasers. According to Lazzarini (2015, p. 103), identifying the problems that are necessary for financial and competitive success in the long term is one of the essential elements of the company’s management. Strengths of the organisation should be taken into account because they help build a strategy and use it as a basis for achieving competitive advantages.

If the company does not have specific resources and opportunities, managers must urgently take measures to improve the current situation of the organisation and achieve new ways for development. At the same time, management must eliminate the competitive weaknesses of the corporation because they make it vulnerable, lead to lower profitability and growth rates, and prevent the use of new market opportunities. The activity of the company should be developed according to available resources, and the strengths and weaknesses of the concern should be taken into account (Lee, Kozlenkova & Palmatier 2015, p. 78). BMW’s strategy aims at implementing promising opportunities and protecting against threats in the present and future.

Corporate Culture of the Company

The ability to maintain a working spirit in the team and motivate employees is an inherent advantage of the BMW concern. This approach allows workers to self-improve and thereby achieve higher production results (Goffin & Mitchell 2016, p. 114). The corporate ethics of the company implies personal responsibility of employees for all achievements, and department heads act as an example for subordinates. Since the organisation follows all these rules of modern business and can flexibly adapt to new conditions, its success does not cause doubts either among consumers or competitors.

The corporate culture of BMW is characterised by mutual respect and fair competition. The company’s activity in the sales market is inseparably linked with the competently thought-out internal policy of the organisation (Saeidi 2015, p. 343). The principal objectives are attempts to avoid risks that could damage consumers, partners, and the enterprise itself, as well as the constant growth and renewal of the technological base, which is manifested through the release of new products.

Conclusion

Thus, a careful analysis may help to assess the development prospects of BMW and identify the company’s key activities and spheres of work. The corporate policy of the organisation is transparent and focuses on employees’ professional growth and self-development. The ability to be a competitive enterprise is achieved through the continuous development of the technical base and an innovative approach to work. The possibility of using modern production technologies helps the concern to occupy a leading position in the market for several decades. The features of strategic management of the company comply with contemporary business standards and support the achievement of high performance.

Reference List

Castriotta, M & Di Guardo, MC 2016, ‘Disentangling the automotive technology structure: a patent co-citation analysis’, Scientometrics, vol. 107, no. 2, pp. 819-837.

Dehning, P, Thiede, S, Mennenga, M & Herrmann, C 2017, ‘Factors influencing the energy intensity of automotive manufacturing plants’, Journal of Cleaner Production, vol. 142, no. 4, pp. 2305-2314.

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Galbraith, JR 2014, Designing organizations: strategy, structure, and process at the business unit and enterprise levels, 3rd edn, John Wiley & Sons, San Francisco, CA.

Goffin, K & Mitchell, R 2016, Innovation management: effective strategy and implementation, 3rd edn, Palgrave Macmillan, New York, NY.

Hill, CW, Jones, GR & Schilling, MA 2014, Strategic management: theory: an integrated approach, Cengage Learning, Stamford, CT.

Hwee, EQC 2015, ‘Building & sustaining strategy: Bayerische Motoren Werke (BMW) – automotive industry’, TMC Academic Journal, vol. 10, no. 1, pp. 29-46.

Lazzarini, SG 2015, ‘Strategizing by the government: can industrial policy create firm-level competitive advantage?’, Strategic Management Journal, vol. 36, no. 1, pp. 97-112.

Lee, JY, Kozlenkova, IV & Palmatier, RW 2015, ‘Structural marketing: using organizational structure to achieve marketing objectives’, Journal of the Academy of Marketing Science, vol. 43, no. 1, pp. 73-99.

Liu, Y 2013, ‘Sustainable competitive advantage in turbulent business environments’, International Journal of Production Research, vol. 51, no. 10, pp. 2821-2841.

Madsen, TL & Walker, G 2015, Modern competitive strategy, 4th edn, McGraw Hill, New York, NY.

Nag, B, Han, C & Yao, DQ 2014, ‘Mapping supply chain strategy: an industry analysis’, Journal of Manufacturing Technology Management, vol. 25, no. 3, pp. 351-370.

Saeidi, SP, Sofian, S, Saeidi, P, Saeidi, SP & Saaeidi, SA 2015, ‘How does corporate social responsibility contribute to firm financial performance? The mediating role of competitive advantage, reputation, and customer satisfaction’, Journal of Business Research, vol. 68, no. 2, pp. 341-350.

Shaw-Taylor, L & Satchell, M 2016, ‘Industry structure, entrepreneurship, and culture: an empirical analysis using historical coalfields. European Economic Review, vol. 86, no. 1, pp. 52-72.

Stuetzer, M, Obschonka, M, Audretsch, DB, Wyrwich, M, Rentfrow, PJ, Coombes, M, Turker, D & Altuntas, C 2014, ‘Sustainable supply chain management in the fast fashion industry: an analysis of corporate reports’, European Management Journal, vol. 32, no. 5, pp. 837-849.

West, DC, Ford, J & Ibrahim, E 2015, Strategic marketing: creating competitive advantage, 3rd edn, Oxford University Press, New York, NY.

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