Executive Summary
BMW has embarked on a mission to cut its notoriously long product development time in half utilizing a newly developed system code named "Digital Car". Senior management has decided to utilize the new process on the 7-series platform. In order to accomplish this goal, BMW is preparing to take advantage of the latest computer technology in car development. At the forefront of the new plan is a debate over the use of computer-aided-styling (CAS). We recommend that BMW implement the Computer Aided Styling system and processes into their production development program.
Key Areas of Concern
The main business problem that BMW is facing is reducing its long product development time. BMW's current design process began in the early 1990s and utilizes a 60 month design cycle. Senior management set a goal of reducing product development time by 50%. This number is extremely aggressive, but necessary. All of its competitors were attempting to shorten development times as well. A main decision that BMW is facing is whether to adopt CAS in place of its traditional "handcrafted" design techniques.
The need for a shorter design cycle is being driven by customer demand and the extremely competitive automobile market. Customer tastes are ever changing and are demanding more choices. With the long development times, certain features of the car could be out of style by the time the car makes it to market. If BMW doesn't meet the customer demands, their competitors will.
Analysis
BMW sells many low volume vehicle models, as compared to its competitors. To be profitable, they rely on longer production runs, to spread their high fixed costs over a greater time period. The trade-off is a lessened ability to r...
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...e to be an unacceptable alternative to the traditional modeling. It may also hinder BMW from meeting its objective of reducing product development time by not using CAS in the meantime. When the time comes to implement CAS it may be more difficult to work into the processes than if CAS was used when the processes were being developed in the first place.
Recommendation
The design room should be required to use CAS. This allows parallelism of vehicle packaging and reduces the lead-time for conversion of the clays into the CAD system. Engineering parallelism requires extensive business process and cultural changes. These should be phased in, instead of a "big-bang" approach especially on the critical 7-series launch. It will also allow BMW to stay on par with its competitors in reduce product cycle times and ensuring that they always have the best product.
The world of technology is ever changing and advancing. With the automotive industry in play technology is constantly surpassing what is available today with what can be done for tomorrow. Technology and the automotive industry go hand in hand with constant improvement to components of cars. Due to technology advancement there is competition within the car industry, especially between American car companies and European car companies. European car companies provide their buyers with innovative variety and revolutionary luxuries. European car technology is superior to American car technology due to their safety, entertainment, and luxury features.
10 more information. We then completed our draft and sent it to BMW for approval.
...system. Surely, it will take time for setting up a new plant and making production working smoothly with the quality assurance. How to shorten the learning curve for these works would be the first priority for BMW to think of.
Despite their conception in 1903, Harley-Davidson and the motorcycle industry as a whole didn’t really take off until after the Second World War. Many people rode motorcycles during the war, with Harley-Davidson themselves supplying almost 90,000 motorcycles for the U.S. military during this time. Many veterans chose to purchase motorcycles upon returning home, as they enjoyed riding during the war and wanted to continue riding in their civilian life. This generation known as the "baby-boomers" quickly became the main target audience for many of Harley-Davidson’s marketing efforts. With sales increasing and the industry growing, many "motorcycle clubs" and "rallies" were introduced. Unfortunately, due to the lewd behavior displayed by most people associated with these clubs and rallies, bikers typically had an image of being disorderly and raucous. Harley-Davidson’s image itself took a big shot due to the Hells Angels. This was a motorcycle gang wishing to become notorious for "drug trafficking and other organized crime activities," who used only Harley-Davidson motorcycles. All of this combined to lead to a decline in demand and sales throughout the entire industry during the 1960’s. The industry was really helped out with the release of the Hollywood film Easy Rider in 1969. This film helped change the public’s perception of bikers and sparked an increase in motorcycle demand which has lasted to this day.
The automotive industry is one of the most important sectors of the economy for every country in the world. It involves a large number of corporations and institutions engaged in the manufacturing process of motor vehicles including designing, developing, manufacturing, marketing, and selling. It contributes to the global economic growth by generating a significant return and creating a ripple effect on supporting the supply chain as well as providing job opportunities for the skilled workers (ACEA, 2016).
It all started in 1979. Mazda, a relatively small player in the world automobile market in the automobile market at that time, wanted a string international partner in order to make the transformation from being a small niche player to becoming a major global automaker. At the same time Ford was also looking for a partner to help it design and produce smaller automobiles. The two firms agreed that they were logical partners.
Since the beginning of 2000, FAW-Volkswagen has grown rapidly in the face of international competition. Before 2004, the company used the traditional value-chain model, which is based on sales’ production (Mazen, 2010). This is a risky model for a company to follow in a volatile market. Use of the forecasting model provides, no analytical evidence to support different options. Both marketing people and financial management people are under great pressure to balance costs and profits. As a Chinese automaker, FAW-Volkswagen didn’t want to have a passive and disadvantaged position in the industry, so the R& D department began to analyze the build-to-order model of foreign auto manufacturers, and adopted a new value-chain model on this
Another important differentiation strategy that BMW has incorporated is the establishment of links between the customers and the company. Over the years, the company has created a servicing segment that ensures that contact between the company and the customer continues even after the initial vehicle purchase.
Its objective is to integrate people, process, and technology. Toytoa’s product development procedure is essentially different from a manufacturing process. Its backbone is not visible, but knowledge and information which are untouchable. The product development’s cycle time is much longer than hours. It usually takes weeks or even months. The production chains are non-linear and multi-directional. Workers are no longer manufacturing workers but specialists with high diverse technology. This product development strategy is viable for Toyota. This is because this strategy does help Toyota to prolong the life cycle of current product. For instance, Toyota Camry is a very successful current product which is prolonged its life. Camry has been made since 1980s. Camry is set at an middle-high level of family veichle. After 30 years development, Camry is still very famous all over the world. This cannot be separeted by Toyota’s successful product development strategy. One of the key features of the Toyota product development system is functional engineering managers. They are primarily teachers in the Toyota system, who are the most technically competent engineers, with the highest levels of experience. Toyota’s management group is consist of high educated experts. They were all engineers and their technical excellence is very famous. But recently, Toyota’s product development system does not work very well. In
Perhaps the CAR could be initially launched in a small selected test market, stressing the dialogue with the customers about the value of the product and service. Afterwards, target pricing in pace with to the company’s strategic objective of a deft market penetration can beacon engineers to rebalance the technological features of the CAR. This also accommodates better for investors’ expectations of a fixed return. Moreover, it allows AUDI’s management to concert its pricing strategy and counteract unforeseen changes in the all too sensitive demand, as the link between customer value perception and product’s cost becomes alive. After all, relying solely on a forecast is not advised, as it cannot possibly capture all the dynamics of a fairly unknown market for a project which needs to age in the years to come.
BMW- differentiation strategy, high price, breadth of product line is moderate, known for their cars being in the shop constantly and high maintenance bills.
(6) Pandremenos, J., J. Paralikas, K. Salonitis, and G. Chryssolouris. "Modularity Concepts for the Automotive Industry: A Critical Review." CIRP Journal of Manufacturing Science and Technology 1.3 (2009): 148-52. Print.
The global company Mercedes-Benz is considered one of the most successful and well-known automotive companies worldwide. Since 1886, the company’s founders Gottlieb Daimler and Carl Benz made history with the invention of the automobile, including the Daimler Group, which is one the biggest producers of premium cars and the world’s biggest manufacturer of commercial vehicles globally (Daimler, 2013). Their main focus is innovation, safety, technology, style, brand image, expansion, and superior automobiles by offering the best of the best to consumers worldwide. The brand’s philosophy is to continuously create radically new products to advance the cause of human mobility. It is also the number one luxury brand in the United States and Germany while continuously expanding in China and Russia as well (Interbrand, 2013). Mercedes-Benz has a great selection on divisions such as cars, trucks, vans, buses, and financial services offered to any consumer or business. Their global reach has increased tremendously by including production facilities in 17 countries on five continents and having 93 locations worldwide. As a pioneer of automotive engineering, their strategy is to continue the same pioneer role with the ongoing development of mobility, especially in the areas of safety and sustainability (Daimler, 2013). It is very essential for the company to focus on consumers’ needs and their highly well known brand in a competitive global economy. That is why the company Mercedes-Benz releases a brand new model every year to stay on top of its competitors by improving previous models. Some strategies practiced are global marketing, global product development, global product pricing, global advertising, global distribution, an...
Market Segmentation, Positioning and targeting for BMW 1.1 Introduction This report aims to examine the market segmentation, positioning and targeting of BMW (automobile company). BMW will be examined giving information about the company and where it is now and any recommendations that we feel are appropriate. 1.2 BMW Company Profile BMW was formed in 1917, from the merger of two small aero engine makers. Their famous blue and white symbol stems from the colours of the Bavarian Luftwaffe and is said to resemble the view of the one of their plane through a propeller. BMW is renowned for its sporty, sophisticated & luxury image which has been built up since the 1970's with many motor sport victories ranging from Touring Car to Formula 1.
The decline in Profit margin in 2014 was because of their less revenue in the North American market where they make good margins with their larger vehicles as shown in Figure