Presentation on BMW

Automobiles and motorcycles which fascinate people all over the world and which win legions of new admirers every day. And a degree of success which sees the BMW Group go from strength to strength.

Submitted To: Prof. Reshmi Menan Submitted By: Dinesh Khunt (Roll No:07) Ravi Majithia (Roll No:09) Karishma Makim (Roll No:10) Purvi Panchal (Roll No:17) Nirav Vaghela (Roll No:36)

Automobile Industry
Pre and Post war scenario Rebuilding the Nation Initially Automobile Production was prominent in USA, but soon Spreaded to Europe and Japan

By the latter part of the 20th century the automobile industry was global and mature.
General Motors, Ford, Daimler-Chrysler, Toyota and Volkswagen were market leader.

CSF changing with Time

From the mid 1990s automobile producers strove to improve engineering and Quality of vehicles. From 21st century price war in Automobile market started which decreased the profitability of all major companies. Quality was no longer issue as many has the same and the consumer choice factor had become Design and the Brand appeal. Companies started given attention to the Look and building powerful brands rather than price competition.

Cont..
It has become clear that Brand Identity was most effective way to be more competitive in the market, Toyota Case: High Quality, Reliability, Fuel Economy, Smart Environmental Awareness Performance Evaluation criteria:
Product Excellence Cost Of Ownership

Average Performance of Car Brands

BMW and Major Competitor

Company General Motors Ford Daimler Chrysler Toyota Volkswagen BMW Group No of Vehicles (M) 8.5 6.7 3.85 6.25 5.02 1.12 (bn) 157.19 116.47 144.65 125.30 87.15 41.52

Company History
BMW (Bayerische Motoron Worke Aktiengesellschaft) was founded in 1918 in Germany. High Performance Saloon Automobile. Mission: To be the most successful premium manufacturer in the industry. Pre war the company used to produce Aero Engines. After world war II the demand for Aero Engine gone and the Company then moved to Automobile Manufacturing. In 1959 BMW faced bankruptcy, when it found a powerful Shareholder Herbert Quandt, who could see BMWs inherent strength beyond current difficulties.

Cont..
The turning point came In 1961, when BMW launched model BMW 1500 which helped establish BMW automobile brand as reputation for engineering excellence. The BMW group produces premium range of Automobiles and Motorcycles. Other Business are Software and Financial Services. The company has its 23 production and assembly plants in 13 countries worldwide. BMW employed more the 1,04,000 employees in their plants.

BMW Group Position in 2003

Automobiles delivered by BMW Group in 2003 (1000 units)

BMWs Top Ten Markets

Strategic Competencies
Engineering Excellence BMW Brand Management Open and Design based culture

Strategic Capabilities
Highly Qualified German workforce Robust Distribution network and close proximity with customer Partnering Growth with Suppliers

BMW Positioning
Positioned as a Ultimate Driving Machine with Powerful, Reliable and Luxurious Image and Focused to: Young Affluent Professional High Performance saloon Automobiles

Strategy of BMW
The main factor of BMWs success is attributed to the development of consistent marketing policy, the market niche strategy. Positioning : Positioned differently and Pricing differently in various nation Brand : Brand Management, Communication HR: Innovation at centre stage, no penalty on faults Design :Conventionally designed and Traditionally styled SCM : Long Term Relations with Suppliers, buying in US Dollar Customer Service and sales : Close Proximity so better segmented

Cont.
Productivity: Rise productivity of at least 5% year

Trade Unions: Highly negotiated terms My machines and people sweats more than competition
Cost: Putting all of cost structure to the test.

Production : Moving Production in to growth market resulted benefit in to Cost Reduction and Hedging against Currency. Share holders : high profits with value growth.

Porters Five Forces

Supplier:
Low New Entrance: Moderate

Substitute:
Moderate

Customer: High

Competition:
High

Challenges
Size of the Company and Range Of Models Vulnerable for Takeover Quant Family stake sale Focused to Organic Growth: Strong Competition with range of Brands Ageing population Mobility boundaries in growing urban areas

Cont..
Over Ambitious Management : Every 3 months New product, 40% sales Raise, No 1 in Premium Cars Ahead of Merc Can Damage Brand Maintaining Price Premium & Quality

Quality concern.

Future Of BMW
An additional automotive brand would have to be a perfect fit for BMW and its strengths Emerging Economies Focused Communication needed (BRIC Nations) - Emerging markets newer Millioners also be elevated to BMW prestige Rationalize ambitious new product launches Focused needed to tap into efficiency potential amounting to billions.

SWOT Analysis
Strength Strong Brand name Powerful Distribution network and relation with supplier Sophisticated brands like RollsRoyce is a part of the group The BMW group spends huge % of its revenues on R&D, which is the highest in the industry Increased turnover and trading profits Strong marketing communication Skilled labor force Weakness Difficulty in dealing with labor cost control in European political climate Over reliance on BMW brands Substitute products and technology Organic way of growing

Cont..
Opportunity New Products and Segments Market shifts to globalization & Entry in to developing countries like south Africa Innovation and alliances, Like hybrid car New Technology in Automobiles Threats New & existing competition Volatility in price of fuel New legislation Economic recession Hostile bids Far-East automobile companies expansion Extremely high competition for customer and resources

Thank You