Explore BMW’s Web site https://bmw.com , and then click on the link for https://bmwgroup.com . The site you find provides an overview of the company’s key functional areas, including research and development and production activities (see the page headings). Under Research and Development, click on Innovation & Technology and explore the links at the sidebar to better understand the types of resources and capabilities that underlie BMW’s approach to innovation. Also review the statements under Production focusing on automobile production worldwide and sustainable production. How do the resources, capabilities, and activities of BMW contribute to its differentiation strategy and the unique position in the industry that it has achieved?
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After reviewing both the website, BMW seems to be a company which thinks a lot ahead in the future with a project into the next 100 yrs (BMW Group, 2018). They’ve divided the visions for their next 100 yrs. into four different categories based on the products they serve (BMW Group, 2018). Those being BMW, Mini, Rolls-Royce, and BMW Motorrad. Rather than going with a single statement that sums everything this provides them with better control and flexibility with regard to their moment.
BMW also provides an option for the customer to build their own product, the way they like around one of the car they’ve in the market (BMW USA, 2018). When the customer has an option to build their own car, they’re always excited about the concept and also helps increase the ownership of the customer for a particular car. They have got a select number of models and variations which is 17 to be precise. Even with that number, they do provide a lot of customization options to the customer and a good selection options.
Their innovation section features their idea of Company version 4.0 which envision their complete transaction into digitalization in the production process (BMW Group, 2018). They’ve already entered into space and have started using the digitalization methodology like using Virtual Reality (VR) for product optimization to make use of algorithms to better understand each connection and bolts used in each of their products. They also list about the next wave of technologies and mobility which they’ve already implemented to a certain level. Those being autonomous driving, connectivity, electro-mobility, excellent concept, design and model selection along with mobility services (BMW Group, 2018). Their movement towards electric vehicles suggests them embracing the change and the need of the hour. They’ve set this as their main strategic focus (BMW Group, 2018). They as promised delivered over 100,000 vehicles in the year 2017 which was an increased by more than 66% compared to previous year. The company projects further growth in their sales and have estimated sale of over half a million such cars a year within the next decade.
While looking into the production, they claim to be the only company which makes use of the light carbon fiber in large-series production (BMW Group, 2018). The use and benefit of carbon is much higher especially for electric vehicles as the additional weight of the battery is offset as well due to the overall weight being lighter. A car manufactured using steel would weigh 7.85 kg per cubic dm while carbon weighs more than four times lighter which is just 1.80 kg per cubic dm. They also make use of intelligent energy data management which provides a sustainable production process. The company also makes use of a robot to assist the company workforce when it comes to heavy works which minimize the strain to the company staff (BMW Group, 2018).
All those added with their brand to it has enabled BMW to differentiate themselves in the market. The competition is increasing in the market with so many players active in the market and especially in the electric vehicle category where Tesla appears to be the top player. Also, other giants are well into the race as well like GM, Volkswagen and Ford which adds a competition to BMW always keeping them at the edge of the seat stressing the need of differential strategies to remain on top of the market segment.
BMW Group Next 100. (2018). Retrieved from bmwgroup.com/en/next100.html
BMW Group Brand Vision. (2018). Retrieved from bmwgroup.com/en/next100/brandvisio...
BMW Group Innovation & Company. (2018). Retrieved from bmwgroup.com/en/innovation/innovat...
BMW Group Technologies and Mobility. (2018). Retrieved from bmwgroup.com/en/innovation/technol...
BMW Group Electro Mobility. (2018). Retrieved from bmwgroup.com/en/innovation/technol...
BMW Group Production. (2018). Retrieved from bmwgroup.com/en/company/production...
BMW USA Build Your Own. (2018). Retrieved from bmwusa.com/byo.html#!/
In this cut throat business market, products and services competing and catering to various market segment competing for market customers, needs to hold innovative product differential strategy for business growth and sustainability. Diverse buyer preferences allow industry rivals to set themselves apart with product attributes that appeal to particular buyers (Gamble, Peteraf, & Thompson Jr., 2013).
Analysing BMW’s website, the first website boasted of 17 different varieties of vehicles design with multiple sub designed under each one. Their different functionality were mentioned as SAVs, Sedans, Coupes and Convertibles. Their innovation segment has electric category where they have plans to expand their electric automotive varieties to 25 different electric models by the year 2025. At present, 2018, they have plans to expand their 9 electric powered models. Also their future plan of launching iNext the first series of electric powered autonomous driving.
In 2017 they claimed to have delivered 100,000 to customers in Europe with electric vehicles and has a forecast for further 140,000 units in 2018 and over half million electrified vehicles to customers in the next decade. Their plan on joint venture with Chinese corporations, Great Wall Motor to produce MINI’s in China along side production at Oxford to be initiated in 2019. This shows its commitment to expand into the market of electric vehicles (BMW Group, 2018).
BMW is also personalizing new designs and user experience. With BMW Intelligent Personal Assistant, the new technology helps the owner figure out how to manoeuvre between vehicle settings or changes in oil etc. With voice activation it gives a sense of personal preference and user friendly experience as well safety issues.
Safety has been taken by BMW seriously and has included the M differential lock system that locks the gears when two outer wheels are prone to stress and slipping (Gibb, 2000). This system also differentiates it from its counterpart to cater to the market segment that not only prefers sporty cars with power and elegance but also considers safety as a priority.
Another step by BMW is to get into the online market and direct CRM strategy. For this it has chosen Accenture as its partner to look into their online presence and marketing. Accenture expertise in digital marketing and strategic presence in all of BMW located countries has been a plus point. Also Accenture’s research among 13,000 drivers in 11 countries have shown that has showed 80% want intuitive and customized content. 77% also want simpler ways to configure vehicles. The respondents also preferred simpler and easier car processing. This research has highlighted how there is need of digital marketing in automotive industry (M2 Presswire, 2013).
These are some of the differential strategy that BMW has been implementing or has plans to implement to differentiate itself into the market segments. With so much of competition from Tesla, GM, Ford, VW etc. it no wonder BMW needs these differential strategies to remain on top of the game.
BMW Group. (2018, September 28). READY TO FACE THE FUTURE. UK. Retrieved from bmwgroup.com/en/company/strategie....
Gamble, J. E., Peteraf, M. A., & Thompson Jr., A. A. (2013). Essentials of Strategic Management. New York: McGraw Hill Education.
Gibb, W. (2000, July 5). TOP MARQUES; BMW’s M is fast, slick … and safe: . Daily Record; Glasgow , p. 34.
M2 Presswire. (2013, May 6). Accenture to Manage Rollout of Leading Global Carmaker’s New Web Platform and Online Marketing Campaigns. M2 Presswire; Coventry .
BMW (Bayerische Motoren Werke) is a German automobile manufacturing company. They generally manufacture premium luxury vehicles. The most popular models are BMW, Mini, and Rolls - Royce. It was founded in 1961 and it’s headquarter is situated in Munich, Germany. So the company has century years of experience in automobile industries. In 2016 financial performance and revenue model was euro 90.86 million and profit was approx. 8.12 million.
The main customer for BMW motors one every individual interested in new technologies with better costs or premium prices, effective transportation and environmental concern (BMW, 2013). BMW motors have a strong distribution and supply chain network that works to their advantages. They offer unique strategies to their customer and they only have limited automobile product on the basis of customer demand. They only manufacture limited automobiles so it carries more value in the market and they charge premium price with their customer. They have other unique strategies. They offer them to customize vehicle which carries more value to them. When a customer can buy a product as per demand then definitely they are ready to pay a premium price.
They have a clear vision and mission and they are working with on it. So their major target customer is luxuries and the high-level customer who want to buy a customized product at premium price. Their mission statement is "In 2020 BMW group is the world’s largest leading provider of premium products and services for individual mobility (BMW UK Limited, 2013).”
BMW. (2013), BMW automobiles - website of the BMW AG, bmw.com/index_en.html [Accessed: 2 Jul 2013]
BMW (UK) Limited. (2013), BMW Education: Company Facts, bmweducation.co.uk/coFacts/view.as... [Accessed: 1 Jul 2013].
BMW is the world’s leading manufacturer of premium automobiles and motorcycles, and provider of premium financial and mobility services having 30 production locations in 14 countries. As per the data of 2017, the company has 129,932 employees out of which 117,664 are in automobile segments, 3,506 are in motorcycle segment and remaining 8,645 are in financial services segment. The company collected the revenue of over 98 billion euros by delivery of 103,080 electrified vehicles, 2,463,526 automobiles and 169,153 motorcycles (BMW, 2018)
In order to maintain the unique position in the market, BMW is using differentiation strategy to attain the stated objectives by overcoming the physical, mental and financial constraints of organization using minimum possible resources. It is continuously developing new ways to compete and sustain in the market by making adjustments of unexpected moves from competitors, shifts in the needs and preferences of buyers, emerging market opportunities and new ideas for performance improvement in its strategy (Gamble, Peteraf, & Thompson, 2015).
By looking at the company website, we can see that The BMW Group is setting trends in production technology and sustainability as an innovation leader with an intelligent material mix, technological shift towards digitalization and resource-efficient production. The flexible value chains that can be optimized continuously adds to the competitiveness of the organization.
The strategic approach of BMW comprises of brand and image, products, technologies, customer experience and services, digitization and profitability aims on expanding technological competence and set new standards for competitors by enhancing interaction between individuals, vehicles and services (BMW Strategies). The robots and automated technology are used in optimum level to support the people in coming up with flexible, efficient and innovative products. BMW is the first automobile company to use lightweight carbon in large series production that supports electro mobility and offsets the additional weights of battery. In addition, the use of one-of-a-kind environment management system for intelligent data energy management is assisting in sustainable production (BMW Production).
It has separate institute for mobility research that initiates cross-modal and interdisciplinary research with an international perspective in the domain of mobility and transport. The researches focus on future scenario and vision, urban mobility, automated driving, new business models and user demographics that helps to come up with new strategies to address the market demand (BMW Research Institution). It also allows customers to design their own product by choosing from different models available to add emotional element to the product. It also invests in employee support and development to make them motivated for working towards the business goal by making it a special place to work.
BMW has developed the vision for next hundred years based on the six statements of mobility is becoming versatility, connectivity is becoming second nature, mobility is becoming tailor-made, technology is becoming human, energy is becoming emission-free and responsibility is becoming diverse (BMW Future Views). Production of electric vehicle is one of the move of the company to think of the future and address the changing need of people and environmental issues together.
Thus, we can say that BMW is using its resources, capabilities and activities in full potential to differentiate itself from the competitors.
BMW. (2018). BMW Group Key Figures (2017). Retrieved from Company: bmwgroup.com/en/company.html 2
BMW Future Views. (n.d.). Retrieved from bmwgroup.com/en/next100/futureview...
BMW Production. (n.d.). Retrieved from bmwgroup.com/en/company/production...
BMW Research Institution. (n.d.). Retrieved from bmwgroup.com/en/company/forschungs...
BMW Strategies. (n.d.). Company. Retrieved from bmwgroup.com/en/company/strategie.... 5
Gamble, J. E., Peteraf, M. A., & Thompson, A. A. (2015). Essentials of Strategic Management: The Quest for Competitive Advantage (Fourth ed.). New York: McGraw Hill Education.