1916 BMW or Bayerische Motoren Werke as it is known in German, starts building engines and planes (BMW Group, n. d. ). 1928 With the acquisition of Fahrzeugfabrik Eisenach, BMW starts building its first cars (BMW Group, n. d. ). 1939 At the outbreak of the SWW, BMW is classified as an armaments manufacturer and therefore given priority in the allocation of resources. It devotes mainly to the manufacture of aircraft engines (BMW Group, n. d. ). 1945 The company is stripped of most of its assets as compensation and survives only making pots and bicycles (BMW Group, n. d. ).
1948 The first BMW motorcycle comes out of production line, the R24. Success is total and around 9,000 units are sold the next year (BMW Group, n. d. ). 1959 By the end of this decade, number where not as good as expected so Daimler-Benz offers to buy the company. Small shareholders and the workforce strongly oppose the idea for they had faith in the eventual success of the BMW 700 model. Their tenacity convinced Herbert Quandt to buy even more shares thus preserving the company’s independence (BMW Group, n. d. ).
1961 The BMW 1500 model is a commercial success and within only two years, the company would be profiting again (BMW Group, n. d. ). 1973 Bob Lutz implements a new strategy of worldwide sales subsidiaries (BMW Group, n. d. ). 1994 A plant is open in the U. S (BMW Group, n. d. ). 1998 Acquisition of the prestigious Rolls Royce (BMW Group, n. d. ). 2000 The company realigns its strategy and decides to focus only in the premium segment (BMW Group, n. d. ). 2007 Strategy number ONE is pursued (BMW Group, 2012, P. 2). Strategic Leadership Without doubt, Herbert Quandt is the main person behind the company’s current positioning.
As we saw in the timeline, he saved BMW from bankruptcy simply because he believed in the unions and their unshakeable faith in both a bright future as well as their own abilities. By doing so, Mr. Quandt displayed a very strong commitment as a leader (“Hill & Jones”, 2013, p. 31), leading by example as he bought more shares when everyone, from his entrepreneur colleagues to his bank executives advise him on the contrary. Mission and Goals Currently the company is pursuing what they call “Strategy Number ONE” (BMW Group, 2012, P. 2) having as objectives profitability and “enhance long-term value in times of change” (BMW Group, 2012, P. 2).
It is important to outline also that there are four pillar sustaining this strategy: “growth, profitability, shaping of the future and access of technology and customers” (BMW Group, 2012, P. 2). Altogether, they aim at fulfilling BMW’s vision of becoming “the world’s leading provider of premium products and premium services for individual mobility” (BMW Group, 2012, P. 3). Comparative advantage Following the German tradition for perfection, BMW has built over the years a solid reputation for excellence and constant innovation.
If you think on quality, BMW is the name that emerges into your mind. SWOT Analysis Strengths. Huge investments in R&D Very Strong brand reputation Open mind attitude towards new trends and break-throughs, such as green cars. Weaknesses. The very strategic objective of focusing on the premium sector of consumer limits the ability of the company to both expand, because not everyone can afford a BMW car. Producing premium cars implies that the number will be relatively low; as a result, the company cannot benefit from economies of scales consequently high cost structure.
High wages as their main production plants are in Germany. Opportunities. As oil prices rise, people will be more likely to buy electric or hybrid or fuel efficient cars; BMW specialty. New emission regulations will mean that cars will have to be ever more efficient in their oil consumption, this will greatly benefit the company because they already have one of the highest standards in the world and have no need to further invest in order to develop the technology for they already have it. Threats. Its main competitors are the strongest in the world: Lexus, Mercedes Benz, Porche and Audi.
Currency fluctuation. Economy not fully recovered. Low strategic integration. Conclusion Defined as one of the top 10 automakers in the world (Adam et al. , 2011), BMW has without doubt earned its reputation and position among its fellow competitors; that being said, there is still a lot to ground to cover. Honouring the German tradition of strong leadership, BMW is heavily centralized in Germany itself, so in order to somehow improve its costs structure, it would be a good idea to allow the functional level managers design strategies with the business level ones (“Hill & Jones”, 2013, p. 10-11), in doing so, they may better tailor the needs of each other.
This, compounded with a decentralized planning (“Hill & Jones”, 2013, p. 27) will provided much needed greater flexibility to face the ever changing market scenarios. But in order to counter one the main weaknesses of the company (low strategic integration), BMW need to seek agreements or even buy if necessary, companies which cover other segments in the market such as mid-price.
This would allow it to spread the risk of being heavily focused in a segment that while very profitable, it is very limited in size. Finally, the high investment in R&D had long ago position BMW among the leader in the field of green technology. As global warming and pollution are becoming worse and worse every day, we believe that this is the future: green tech. The company should lead the way for it is only a matter of time before the rest of world follows, pressure by ever more conscious consumers.
