BMW: Strategy Formation and Planning essay

The vision is to be leading provider of premium products and premium services for individual mobility”.

It represents two objects. First, BMW want to be leading provider. Think it is possible because now “The BMW Group brands BMW, MINI and Rolls- Royce are three of the strongest premium brands in the automotive industry today. It also occupies a strong market position in the motorcycle segment with the brands BMW and Husband”. Second, the BMW Group hopes to bring “premium products and premium services for individual mobility”.It impresses the important of customer to the BMW Group. They do not simple bring products to customer; they also want to provide more benefits by using their automobiles and arrive. The mission of BMW is that “the company needs to focus consistently on growth and profitability, constantly develop new technologies, guarantee access to relevant customer groups, and, most importantly, actively shape the future.

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In here, there are three main actions which include focusing, developing and actively shape. I want to care more about actively shape the future.The BMW Group’s purpose is making new motorcycle to create and lead the trend. It is appropriate to the vision of this Group which is leading provider. TO sum up, the vision and mission Of the BMW Group affirm their report Strategy Number One. 1 .

B. Explain the significance of stakeholder analysis. With the BMW Group’s strategy above, they need stakeholder to push up and complete their objectives. There are three broad types of stakeholder but in the case study, just two of those are mentioned. First, connected stakeholders include customers, suppliers and financiers.Every activities of company are to provide customer’s needs and wants so customer is the people who measure BMW Group brand’s performance.

Customer can make corporate strategy change. For example, “By the mid asses the car market was teeming with DOD quality cars, the distinguishing elements and customer’s choice factors had become design and brand appeal, as demonstrated by the fact that companies that had given attention to the ‘look’ of their automobiles or had built powerful brands made small gains, rather than losing market share.This realization made design the first weapon in the fight for market share, as the feature that grabbed customer’s attention”. Because of that, The BMW Group also fined solution by ‘ultimate driving machine’.

It can “raise a set Of general perception and emotional connections generated by the mother brand”. About supplier, “BMW also exercised a firm control on the supply chain and dealings and relationships with suppliers, who mostly had maintained a long association with the company.They play an important role in giving right automobiles, in the right place, at the right time, in the right quantity, for the right price. With financiers, “BMW Financial Services rounds off the BMW Group’s successful portfolio”. It means that they supply capital for BMW to invest so financiers can decide the size of investment, ability to go international, open market or make new automobiles by changing design and raising brand. Second, external stakeholder includes pressure group.

The company has the ongoing dialogue with stakeholders from the world of business, politics and society also in order to facilitate early identification of medium and long- term challenges”. Because the BMW Group follows corporate sustainability which is impressed in “the BMW Group came to realize that it is important to place the responsibility for measuring and managing sustainability activities and for providing strategic impetus with a single corporate unit’, they need interest group get together to find problems and solutions for job or pollution.In addition, pressure group can affect on opinion and change thinking or attitude Of the BMW Group to environment or social well- being, so they contribute to make alteration. In conclusion, if a company recognizes exactly the importance of stakeholder, it can be supported and added value for activities. Thus, BMW need to have right strategy to right stakeholders for right purpose. 1 . C.

Conduct an external environment and organizational audit of the company Beside stakeholders, there are many factors which can affect on company activities like external and internal environment.External environment include macro and industry environment. Nevertheless, in macro environment, according to the case study, just economic and technological have influences on the BMW Group. “The automotive industry crisis of 2008-2010 was the part of a global financial downturn”. Thus, economic affected on income of customer then the rate Of selling car.

However, “according to the DOD Jones Sustainability Indexes, the BMW Group is currently the world’s most sustainable car market.The company has remained the industry leader in these important global corporate sustainability indices for four consecutive years, most recently in 2008”. It affirms the BMW Group’s competence which can resist the change of economic. About technological, “Bum’s technology had been advanced, but not exceptionally innovative”. It can be seen as the way BMW may make ‘ultimate driving machine’. In addition, the types of motorcycle which BMW product is in luxury segment so they must continuous to improve technology because it is the key in this case.

In industry environment, all five forces affect on the BMW Group.First, the threat of new entrants to the industry was impressed in “The premium price automobile market, being one of the few reparability level, was increasingly crowded, so new models came out, and new entrants nudged closer, all the time. The result was that price competition, which started when Lexus had entered the US market in the mid asses, was gaining pace”. Moreover, “Car companies from Asia, Europe, North America, and elsewhere have implemented creative marketing strategies to entice reluctant consumer as most experienced double- digit percentage declines in sales”.Thus, it makes a competitive environment in which the BMW groups need to exploit maximum the brand, develop products and services, reduce cost but save profitability. However, because BMW has good experience and favored access to raw materials, it has some advantages to defeat small new entrants which have lower experience, lower technological advance and lower distribution channels.

Second, the substitute product of automobiles is truck or other vehicles which also have influence on BMW by changing of complementary product.During 2008-2010, ‘the automotive industry was weakened by a substantial increase in the prices of automotive fuels linked to the 2003-2008 energy crisis which discouraged purchases of sport utility vehicles (Subs) and pick up trucks which have low fuel economy’. Therefore, BMW should have a plan to sustain with the change of fuel, avoid threat of substitute product like transforming engines, using cycle fuel system to reduce the amount Of fuel and also helping to save environment which is in one of the Bum’s sustainable strategies.Third, the bargaining power of customers can affect on BMW by their own profitability. It is impressed on the price that they want to be lower because of industry crisis.

However, Bum’s automobiles are high ranking, differentiated and specialized products so the bargaining power of suppliers may sustain the bargaining power of customer. Furthermore, the threat of car companies from Asia, Europe, North America or products like truck, bus can make Bum’s suppliers become more difficult to sell motorcycles.Final, the rivalry amongst current competitors make the strategy of BMW meet some disadvantages.

“The competitors in smaller car segment were volume producers with lower costs than BMW. The result was the price competition, which started when Lexus had entered the CSS market in the mid asses, was gaining pace”. In addition, “Car companies from Asia, Europe, North America, and elsewhere have implemented creative marketing strategies to entice reluctant consumer s most experienced double- digit percentage declines in sales”.

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