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Globalization of bmw
Managing a global supply chain
Managing a global supply chain
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BMW CASE:
Globalizing Manufacturing Operations
INTRODUCTION
This case focus on the dilemma that the president of BMW Manufacturing Corp., Al Kinzer, faced in 1995 in relation to BMW's new plant at Spartanburg, South Carolina and a dramatically increased demand in the U.S. market for the Z3 model.
To study the BMW case, the background information and role of new plant at Spartanburg will be described at the beginning. Secondly, the 3 alternatives options will be analyzed and compared accordingly to determine a proper conclusion. Finally, the recommendation will be presented with various considerations.
BMW BACKGROUND
BMW was found in 1913 by Karl Rapp as an aircraft engine design shop. After WWI, it started building motorcycles and then expanded into motor vehicles industry during the 1930's. After WWII, the company suffered again but survived later when Herbert Quandt took over the control in 1959. The company rapidly grew considerably and reached a market value of nine billion U.S. dollars in 1979; however, it was still small compared to the big U.S. auto manufacturer. Profits continued to grow up quickly. By 1995, BMW had thirty-four wholly owned subsidiaries, fourteen in Germany and twenty around the world. They also discovered that U.S. market would be the largest and fastest growing market for BMW.
BMW soon realized that many threats impacted its market share in U.S. The Japanese auto manufacturers started building plants in the U.S. to deal with the increased U.S. demand at a lower cost than importing their cars. BMW's U.S. export situation was made even worse by the appreciation of German mark and additionally the higher German labor costs. As a result, the decision was made in 1991 to bui...
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...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.
Investing more on building a facility would be a long-term consideration. For the short-term, we suggest BMW should concentrate on production of the Z3 in the Spartanburg, and ship the 318 back to Germany for production. The 318 has worldwide demand, while the trend in the U.S. prioritizes the Z3. 318 or other 3 series have high potential on gaining market share in the future, and eventually the production will be shift to low cost production line to stay competitive. With international production, having the flexible manufacturing capabilities to produce a broader group of products will play a crucial role in future vehicle industry.
Kiley, David. Driven: Inside BMW, the Most Admired Car Company in the World. Hoboken, NJ: John Wiley, 2004. Print.
BMW has captured the attention of automobile drivers from all around the world with their “Ultimate Driving Machine.” The BMW Company was originally established in Germany and has extended nationally reaching over 12 countries. With Germany and the United States being the top two target countries, BMW has established their products as a combination of luxury, safety, and comfort with product lines to suit all styles of living. Revenues have been increasing each year since before 1996 with profits coming from product line of automobiles and motorcycles. In 2001, BMW came out with a new product group, the Mini. The Mini also contributed to the revenue increase in 2001. BMW has current developments in their sports cars, the Z8. BMW has created a trustworthy name for the automobiles they produce and has all the potential to continue their success in the future.
It is the leader in superbikes manufacturing, but US legislation is limiting the number of sports bikes to be imported for safety reasons. Yamaha produces Harley clones but lacks Harley's image. Being a market follower, Yamaha is facing many problems. BMW is famous for producing quality products, but its high prices hold it from expanding sales. INTERNAL PLANNING PREMISES
Bayerische Motoren Werke AG, shortly known as BMW, is a German manufacturer of luxurious automobiles and motorcycles. BMW group is not simply one name: it is also the parent company of other premium brands such as the MINI, the Rolls-Royce and the motorcycling company Husqvarna. For the purpose of providing a maximum of details, this essay will just focus on the automobile part of BMW as it is more significant than the motorcycle segment and since they have a lot of overlapping factors.
In the early 1900’s, the first companies that would form the company as we know it today began to emerge. The first of these was the Olds Motor Vehicle Company (later Olds Motor Works, makers of the Oldsmobile) in 1897, followed by Cadillac Automobile Company in 1902 and Buick Motor Company in 1903.
Another strategy used by BMW to differentiate itself from other automakers in the market is the proactive usage of technology and innovativeness in the development of products. From the early 1990’s, BMW has been on the forefront of incorporating technology in its designs in line with the technological advances of the modern world. This has led to the creation of inventive products. The uniqueness of these auto products put BMW in a position of advantage. The development of the hydrogen car as early as 2000 was an indicator of the company’s innovative strategy. In addition, the company also presents itself as environment friendly creating a whole range of vehicles in this category. This is a differentiation strategy meant to boost the company’s image and reputation amongst customers. In addition, this gives the environment conscious customers a variety of products to choose from giving BMW an upper hand in the industry.
...ations in host countries. Some problems that BMW face is going global into the Asian market for example china does not permit BMW to sell its products directly to its public it must go through government organisation for distribution. It also wants BMW to manufacture at least 80% of its parts in China, which is not possible as they don’t have a plant in China. And in India the tariff is too high, which makes it hard for BMW to import painted body into the country. According to India’s regulation BMW is not allowed to import more value than they are exporting.
Mercedes-Benz a German based automotive company and is one of the top three luxury automobile makers in the world, bested only by BMW and Audi. However, Mercedes did not become a great luxury car manufacturer by remaining confined to its German borders. The German car manufacturer expanded beyond its borders to compete in the international arena of automotive manufacturing. In order to succeed in this endeavor, Mercedes had to make calculated decisions regarding costs, location, marketing, organizational structure etc. The following paragraphs will detail the pros and cons of abandoning home-country practices, why the company decided to undertake FDI in the United States rather than build the vehicles in Germany, and why Mercedes decided
The American Automotive Industry, popularly known as the U.S. Automotive Industry is one of the most rapidly evolving industries in North America. It is generally oligopolistic with a few players who in the past have been known to avoid price competition among themselves. The industry consists of industries manufacturing vehicles, car parts, replaceable parts and those engaged in assembling parts into complete models. However, the most dominant players in this industry are the vehicle manufacturers. The players design various models, produce the various parts that each model needs and assemble them into a finished product before availing them to the market. General Motors, Chlysler and Ford motors, dominate the U.S. Automotive mobile. They are popularly referred to as “The Big Three”.
The development of the American Auto Industry took place over many, many years, starting with Mr. Henry Ford building the first car in 1896. The industry has evolved, to what it is today and represents approximately 10% of the country’s Gross Domestic Product (GDP). According to the Bureau of Labour and Statistics, ‘the automotive industry includes industries associated with the production, wholesaling, retailing & maintenance of motor vehicles’. These industries are industries that have a tremendous impact on the U.S economy and can be directly impacted by changes in U.S. production and sales of motor vehicles.
Company Overview: Bayerische Motoren Werke AG (BMW) is a German holding company and automobile manufacturer that focuses on the automobile and motorcycle markets worldwide. Franz Josef Popp founded the company in March 1916. BMW is headquartered in Munich, Bavaria, Germany. It also owns and produces Mini cars, and is the parent company of Rolls-Royce Motor Cars. BMW produces motorcycles under BMW Motorrad. It divides its activities into the three main segments: Automobiles, Motorcycles and Financial Services. Its BMW automobile range encompasses the 1 Series, including three-door, five-door, coupe and convertible models; the 3 Series, including sedan, touring, coupe and convertible models; the brand new 4 series, featuring an only coupe design; the 5 Series, available in sedan and touring models; the 6 Series, available as a coupe or convertible; the 7 Series large sedan; the Z4 roadster and coupe; the sports utility vehicles, X3, X5 and X6 and M models, such as M3, M5 and M6. It has producing, assembly, service and sales subsidiaries throughout the world. For the sake of this project, I will be focusing on BMW’s automobile range mentioned above but specifically the 3 series line. The BMW 3 series proves to be the most profitable line due to its relatively low cost and affordability whilst featuring the thrill and power of a German engineered vehicle.
BMW- differentiation strategy, high price, breadth of product line is moderate, known for their cars being in the shop constantly and high maintenance bills.
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 BMW M3 was the sports Sedan version manufactured by BMW and the M3 models were derived from F30 series 3, E90/E92/E93, E46. E36 and E30 then it can be sold with coupe, convertible and saloon body styles. The Hi-Fi Cars During 20th Century of standard series 3 automobiles involve more responsive and powerful engines, enhanced suspension, handling, braking systems, lightweight components, aerodynamic body enhancements and exterior/interior accents. The last M3 model of the Coupe was produced in Germany in 2013 and which can be replaced by F82/F83 M4 convertible and Coupe beginning with 2015 model year. But, in saloon version, the M3 name has remained in use and the BMW M3 series contains most successful touring along with grand touring car, which have