Project BMW group
Implementation Plan: Part 3
Four question ( Three Pages)
Please read and analyze the case study provided below in the attached document title BMW.doc
(Tip given based on quality of solution, well written, proper use of English language )
For the final assignment of this course, you will continue your work with the company BMW group.? In this assignment you will, you will complete the final components of your implementation plan.? (In essay form answer the following points about BMW group)
?For Part 3, you will focus on the following points:
? internal and external issues,
? competition ,
? future outlook for the organization, and
? implementation of tools for measuring business success.
Much of the information you will need to complete this segment can be found in the case study provided. ?However, you are welcome to conduct further research as needed. ?For the future of the organization, you may be creative and add your own insight on where you see the company going. ?
If feel the need to reference part one and part two of implementation plan click the attached.
Your project must be a minimum of three full pages (Approximately 800 words) in length, not including the title and reference page. ?Make certain to include an introductory paragraph.
The tutor named Cgoyal is not allowed to answer this question due to late solutions
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Must be an original response
Answer must be in proper English language
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Must be required length and NOT MUCH LONGER
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Bayerische Motoren Werke (BMW) Group,
www.bmwgroup.com , BMW.DE
Headquartered in Munich, Bavaria, Germany, BMW Group is a world
famous German automobile-, motorcycle-, and engine-manufacturing
company. In June 2012, BMW was listed in Forbesmagazine as the numberone most reputable company in the world. Rankings were based on aspects
such as ?people?s willingness to buy, recommend, work for, and invest in a
company.? The rankings were based 60 percent on public perceptions of the
company and 40 on public perceptions of their products.
BMW owns and produces the Mini marque and is the parent company of
Rolls-Royce Motor Cars. BMW produces motorcycles under the Motorrad
and Husqvarna brands led by the K 1200 GT, R 1200 RT, and F 800 S
models. BMW Group operates 29 production and assembly facilities in 14
countries and has a global dealer network in more than 140 countries.
BMW?s premium lineup includes sedans, coup?s, convertibles, and sport
wagons in the 1, 3, 5, 6, and 7 Series, as well as the M3 coupe and
convertible, the X5 sport active, and the Z4 roadster. BMW has a profitable
financial services segment that provides purchase financing and leasing,
asset management, dealer financing, and corporate fleets. About 3,000
dealers worldwide sell BMWs.
In calendar year 2012, BMW Group sold 1.85 million cars and nearly
117,000 motorcycles worldwide, the highest annual total ever for the
company and an increase of 10.6 percent over the previous record year in
2011. BMW sales in the month of January 2013 were the highest ever in a
January for the company; sales grew 11.5 percent to 107,276 units and it
was the first time that more than 100,000 BMW vehicles were delivered
worldwide to customers in that month.
In early 2013, BMW Group and Toyota Motor Corporation extended their
long-term collaboration agreement for the joint development of a fuel-cell
system, joint development of architecture and components for a sports
vehicle, joint research and development of lightweight technologies, and
collaborative research on lithium-air batteries with a post-lithium-battery
solution. BMW Group had a workforce of approximately 105,000 employees.
BMW Group reported the best-ever May 2013 sales with 166,397 BMW,
MINI, and Rolls-Royce automobiles delivered to customers worldwide, up
5.8 percent from the previous May. BMW Motorrad also had a successful May 2013 with sales up 14.2 percent to 13,081 vehicles delivered. However,
in August 2013, BMW customers around the world were complaining
intensely about not being able to obtain spare parts for their BMW. The
world?s biggest maker of luxury cars, BMW has struggled from June to
September 2013 to ship components on time because of a new supplymanagement system being introduced in its central warehouse in Germany.
BMW?s 40 parts-distribution centers originate at the main warehouse in
Dingolfing that also directly supplies about 300 repair shops in Germany.
Raimund Nestler?who lives in Ingolstadt, Germany, the home base of rival
Audi AG (NSU)?has been waiting six weeks for a new part that controls
engine speed. ?I have always been a die-hard BMW driver and am currently
driving my seventh BMW, but will consider which brand I?ll buy the next
time,? he said by phone. ?For a premium carmaker like BMW, this is
particularly disappointing.? BMW?s stock has declined 2.5 percent in 2013
through August, valuing the company at 45.7 billion euros ($61 billion).
Copyright by Fred David Books LLC. (Written by Forest R. David) History
BMW was established in 1917 following a restructuring of the Rapp
Motorenwerke aircraft manufacturing company. At the end of World War I,
BMW was forced to cease aircraft engine production by the terms of the
Versailles Armistice Treaty. The company shifted to motorcycle production
in 1923 and once the restrictions of the treaty started to be lifted, began
producing automobiles in 1928?1929. The first car produced by BMW was
the Dixi, a vehicle whose design was based on the Austin 7, from the Austin
Motor Company in Birmingham, England.
BMW?s circular blue and white logo, or roundel, evolved from the circular
Rapp Motorenwerke logo, but as BMW grew, that emblem was combined
with the blue and white colors of the flag of Bavaria. The BMW logo has also
been portrayed as the movement of an aircraft propeller with the white
blades cutting through a blue sky?first used in a BMW advertisement in
1929, 12 years after the roundel was created.
BMW?s first significant aircraft engine was the BMW IIIa inline-six liquidcooled engine of 1918, much preferred for its high-altitude World War I
performance. With German rearmament in the 1930s, the company again
began producing aircraft engines for the Luftwaffe. Especially successful
World War II aircraft engines were the BMW 132 and BMW 801 air-cooled
radial engine, and eventually the BMW 003 axial-flow turbojet that powered
Germany?s 1944- and 1945-era jets, such as the Heinkel He 162 and
eventually the Messerschmitt Me 262. After outselling Lexus in 2011 and 2012, BMW and Mercedes are vying to
be the top luxury auto brand in the USA. Lexus was the top-selling luxury
car brand in the USA from 1999 to 2010. Sales of the Toyota Lexus rose 32
percent to 16,211 in January 2013, led by the ES sedan, which more than
doubled to 5,186 deliveries. Internal Issues
In calendar year 2012, BMW sales rose 11.6 percent to 1,540,085 vehicles,
the best sales level in the history of the company. Success was led by the
highly successful BMW 1 Series, with a total of 226,829 vehicles sold in
2012, an increase of 28.6 percent over the previous year. The BMW X1 also
did great in 2012 with a total of 147,776 vehicles sold, up 16.9 percent over
the prior year. The BMW 3 Series Sedan did best with 294,039 vehicles
delivered, an increase of 22.4 percent over 2011. Sales of the BMW X3 grew
27.1 percent to 149,853 units sold, whereas the BMW 5 Series reported that
337,929 vehicles were delivered to customers in 2012, up 9.0 percent from
the prior year. Even sales of the BMW 6 Series grew 146.8 percent, with
23,193 vehicles being delivered to customers.
Also for 2012, global sales of the BMW MINI were a record 301,526
vehicles, up 5.8 percent. The USA remained the largest market for the
MINI, with a record-breaking 66,123 cars sold in 2012, followed by the
United Kingdom, with 50,367 cars sold. In the ultra-luxury-class segment,
Rolls-Royce sales for the full year 2012 reached record sales result of 3,575
motor cars, the highest annual sales in the 108-year history of Rolls-Royce
and the third consecutive record.
Additionally, a record total of 106,358 BMW Motorrad motorcycles were
sold in 2012. Organizational Structure
BMW operates using an autocratic, functional structure with no apparent
Chief Executive Officer or Chief Operations Officer and divisional
presidents. As indicated in Exhibit 1, if executives with these titles exist,
they are neither listed on the corporate website nor in the Annual Report. EXHIBIT 1 BMW?s Organizational Structure Source: Based on company documents Segments
BMW reports their revenues by region and by brand and is doing
exceptionally well in all regions and brands. For example, BMW reported its
strongest January ever as sales climbed 11.5 percent to 107,276 units for
January 2013, the first time ever that more than 100,000 BMW vehicles
were delivered worldwide to customers in a January. There were 29,053
BMW 3 Series sold, up 27.9 percent, as well as 11,753 BMW X1 vehicles
sold, up 57.8 percent. The BMW X3 continued to be popular with 10,230
vehicles delivered to customers, up 9.4 percent. Sales of the BMW 1 Series
were up 8.8 percent to 14,222 units sold, and the BMW 5 Series sales grew
6.4 percent to 23,049. Sales of the BMW 6 Series grew 22.4 percent to
1,354 units. Also in January 2013, worldwide sales of the MINI reached
15,864 vehicles, up 0.6 percent, which was a new all-time high for any
As indicated in Exhibits 2 and 3, BMW?s sales in January 2013 increased in
all regions and all brands, except Motorrad motorcycles. Despite BMW?s
record January 2013, rival Audi (owned by Volkswagen AG) beat BMW in
2013 luxury-car market January sales, propelled by a 39-percent jump in
Audi deliveries in China, its biggest national market. Audi sold 111,750 cars
and sport utility vehicles (SUVs) worldwide in January, a 16-percent
increase from a year prior, compared to BMW brand?s 12-percent gain to
107,276 deliveries. Global sales at Mercedes (owned by Daimler AG) rose 9
percent in January 2013 to 94,895 vehicles, helped by demand for the Aand B-class compacts and its SUV line-up.
Exhibit 4 reveals BMW?s 2012 year-end segment data by region for
automobiles. Note the 2.8 percent decline in motorcycle revenues, and the
decline in United Kingdom revenues. EXHIBIT 2 BMW?s January 2013 Sales by
Region (units sold)
2013 2012 Change (%) Asia 43,114 36,422 + 18.4 China 30,397 26,505 + 14.7 Japan 3,250 ? + 19.0 South Korea 2,790 ? + 32.9 Americas 25,021 24,419 + 2.5 United States 20,195 19,739 + 2.3 Europe 50,594 46,831 + 8.0 Germany 18,709 17,028 + 9.9 Russia 2,311 1,653 + 39.8 Africa* 37,649 32,890 + 14.5 Oceania* 23,000 21,297 + 8.0 *For all of 2012
Source: Based on company documents. EXHIBIT 3 BMW?s January 2013 Sales by
Brand (units sold)
2013 2012 Change (%) BMW Group Automobiles 123,276 112,164 + 9.9 BMW 107,276 96,184 +11.5 MINI 15,864 15,768 + 0.6 BMW Motorrad 4,818 5,237 ? 8.0 Husquarna Motorcycles 587 544 + 7.9 Source: Based on company documents. EXHIBIT 4 BMW?s Revenues By Segment
In ? million 2012 2011 Automobiles 50,165 46,681 Motorcycles 980 1,008 Other revenues 7,660 7,318 58,805 55,007 Revenues
In ? million 2012 2011 Germany 11,974 12,494 United Kingdom 4,059 4,061 Rest of Europe 12,303 12,766 North America 12,991 10,903 Asia 14,436 12,042 Other markets 3,042 2,741 58,805 55,007 Source: Company documents. Finance
Exhibit 5 shows the income statement for BMW Group. EXHIBIT 5 BMW?s Income Statements
(in ? million) 2012 2011 Revenues 58,805 55,007 Cost of sales ?46,252 ?43,320 (in ? million) 2012 2011 Gross profit 12,553 11,687 Selling expenses ?3,684 ?3,381 Administrative expenses ?1,701 ?1,410 Research and development expenses ?3,573 ?3,045 Other operating income and expenses 703 670 Result on investments 598 181 Financial result ?99 ?665 Profit from ordinary activities 4,797 4,037 Extraordinary income ? 29 Income taxes ?1,635 ?2,073 Other taxes ?31 ?23 Net profit 3,131 1,970 Transfer to revenue reserves. ?1,491 ?462 Unappropriated profit available for distribution 1,640 1,508 Source: Company documents EXHIBIT 6 BMW?s Balance Sheets
(in ? million) 2012 2011 Assets
Intangible assets 178 161 Property, plant and equipment 7,806 6,679 Investments 3,094 2,823 Tangible, intangible and investment assets 11,078 9,663 Inventories 3,749 3,755 Trade receivables 858 729 Receivables from subsidiaries 6,297 5,827 Other receivables and other assets 2,061 1,479 Marketable securities 2,514 3,028 Cash and cash equivalents 4,618 2,864 Current assets 20,097 17,682 Prepayments 118 120 (in ? million) 2012 2011 Surplus of pension and similar plan assets over liabilities 672 43 Total assets 31,965 27,508 Subscribed capital 656 655 Capital reserves 2,053 2,035 Revenue reserves 5,515 4,024 Unappropriated profit available for distribution 1,640 1,508 Equity 9,864 8,222 Registered profit-sharing certificates 32 32 Pension provisions 56 84 Other provisions 7,406 7,651 Provisions 7,462 7,735 Liabilities to banks 1,408 911 Equity and liabilities (in ? million) 2012 2011 Trade payables 3,900 2,940 Liabilities to subsidiaries 8,451 6,923 Other liabilities 800 741 Liabilities 14,559 11,515 Deferred income 48 4 Total equity and liabilities 31,965 27,508 Source: Based on company documents. Competitors
The combined sales for Toyota?s Lexus, Daimler?s Mercedes-Benz, BMW,
Honda?s Acura, GM?s Cadillac, Volkswagen?s Audi, and Nissan?s Infiniti,
which are the seven best-selling luxury brands automobiles in the world,
rose 15 percent in the USA in 2012 through November. Growth in sales of
luxury vehicles exceeds growth in all other automobile categories, and these
brands are fiercely competitive globally.
Exhibit 7 provides a financial summary of leading luxury-car
manufacturers. Note that BMW is the smallest firm in terms of number of
employees, but it has the second highest earnings per share (EPS). Volkswagen
Headquartered in Wolfsburg, Lower Saxony, Germany, Volkswagen (VW) is
the largest German automobile manufacturer and the second- or thirdlargest automaker in the world behind GM or Toyota. The
word volkswagen means ?people?s car? in German and is pronounced folks
wagen. VW aims to double its U.S. market share from 2 percent to 4 percent
by 2014 and aims to be the world?s largest carmaker by 2018. VW introduced diesel-electric hybrid versions of its most popular models in
2012, including the Jetta, followed by the Golf Hybrid and the Passat. VW
also owns Porsche. Mercedes-Benz
Headquartered in Stuttgart, Baden-Wuttemberg, Germany, Mercedes-Benz
is a division of the German automobile manufacturer Daimler AG.
Mercedes-Benz is active in three forms of motorsport racing: Formula
Three, DTM, and Formula One. The parent, Daimler AG, holds a 60 percent
stake in Formula One team Mercedes-Benz Grand Prix, as well as a 22
percent stake in aerospace and defense consortium EADS. Daimler sells its
vehicles in 40 countries, but Europe represents 40 percent of its sales. EXHIBIT 7 A Financial Comparison of BMW
with Rival Firms (in U.S. dollars)
BMW VW Daimler GM Toyota Nissan Revenue ($) 76.1B 251B 153B 151B 243B 102B Net Income ($) 5.1B 30B 7.5B 4.5B 8.3B 3.3B Profit Margin (%) 6.65 11.9 4.9 3.0 3.4 3.2 Debt-to-Equity Ratio 1.47 1.24 1.85 0.40 1.15 1.45 EPS ($) 7.27 12.82 7.03 2.67 2.60 0.79 Number of Employees 106K 549K 275K 213K 325K 157K Revenue per Employee ($) 717K 457K 556K 708K 747K 680K EPS, earnings per share. Source: Based on company information.
Mercedes-Benz?s U.S. sales surged 11 percent in January 2013, in its effort
to overtake BMW in luxury-auto deliveries for all of 2013. Mercedes sold
22,501 vehicles in January 2013, its best January ever, and helped the CClass sedan?s 11 percent climb to 7,214 units sold. In comparison, sales for
BMW increased 0.7 percent to 16,513 units, boosted by a 56 percent gain
for its X5 SUV. Toyota Motor Corporation
Headquartered in Toyota, Aichi, Japan, Toyota runs neck and neck with GM
as the largest automobile company in the world. Toyota?s U.S. operations
are headquartered in Torrence, California. Popular Toyota models include
the Camry, Corolla, Land Cruiser, and Lexus, as well as the Tundra truck.
The Lexus competes directly with BMW. Lexus sales were up 23 percent in
the USA in 2012 through November and are expected to gain at least 10
percent in 2013. Volvo Car Corporation
Headquartered in Gothenburg, Sweden, Volvo, or Volvo Personvagnar AB, is
owned by Zhejiang Geely Holding Group China, headquartered in
Hangzhou, China. Geely acquired Volvo in 2010 from Ford Motor Company.
Volvo manufactures and markets a wide range of vehicles, some that
compete with BMW. With approximately 2,300 local dealers from around
100 national sales companies worldwide, Volvo?s largest markets are the
USA, Sweden, China, Germany, the United Kingdom, and Belgium. In 2011,
Volvo recorded global sales of 449,255 cars, an increase of 20.3 percent
compared to 2010. In 2012, Volvo signed NBA star Jeremy Lin to an
endorsement agreement. Over the next two years Lin will participate in
Volvo?s corporate and marketing activities as a ?brand ambassador? for
Headquartered in Ingolstadt, Bavaria, Germany, Audi Aktiengesellschaft
(Audi) designs, engineers, manufactures, and markets automobiles and
motorcycles. Audi-branded vehicles are produced in seven production
facilities worldwide. AUDI AG has been a majority owned (99.55 percent)
subsidiary of VW since 1966. In September 2012, Audi began construction
of its first North American manufacturing plant in Puebla, Mexico, expected
to be operative in 2016 and produce the successor to the Q5. In 2012, Audi again won the 24 Hours of Le Mans, a historic first Le Mans
victory for a hybrid, which was captured by Audi?s R18 e-tron quattro.
Audi?s other R18 hybrid took second, whereas R18 ultras took third and
fifth. This sports car racing success followed Audi R18?s victory at the 2011
24 Hours of Le Mans. The Audis finished in front of three Peugeot 908s by
13.8 seconds to claim victory.
Audi offers a computerized control system for its cars, called multimedia
interface (MMI). This advancement came amid criticism of BMW?s iDrive
control, a rotating control knob and ?segment? buttons?designed to control
all in-car entertainment devices (radio, CD changer, iPod, TV tuner),
satellite navigation, heating and ventilation, and other car controls with a
screen. Some believe MMI is a considerable improvement on BMW?s iDrive,
although BMW has since improved their iDrive. Business Culture in Germany
Germany survived the 2008 recession in good position thanks to their
strong economy and manufacturing base. Unemployment in Germany is
lower now than it was in 2008. German companies are generally run by
individuals specializing in various technical areas. For example, a car
company is more likely to be run by an expert mechanical engineer in
Germany than an expert accountant or finance individual. This technical
nature often extends down the chain of command for other key positions as
well. For example, responsibility is often delegated to another technically
sound individual, who then expects his or her manager to leave them alone
to perform the task with little oversight. People from other cultures often
view this approach as distant and cold. In addition, socializing is much more
common at the peer level than up or down the hierarchy in Germany.
Meetings in Germany generally start on time with all members in
attendance having well researched any aspects of the meeting that touch on
their area of expertise. It is often assumed by people outside Germany that
?German businesspeople have their minds made up before the meeting even
starts,? but this is not the case. Germans take a sense of pride in their
subject matter and want to be as well prepared as possible, so they can
contribute and make key points during the meeting. During a meeting, it is
expected that individuals will contribute when the discussion touches on
their area of expertise. This is an overriding theme in German business,
where well-prepared specialists are groomed and preferred to generalists.
This line of thinking also extends into teamwork in Germany. Each team
member answers to the leader, but each tends to focus on his or her
individual technical task, with little overlapping conversations, at least in
technical nature, with other team members. Communication in Germany tends to be direct and to the point. Supervisors
tend not to sugarcoat their reviews or requirements for subordinates,
instead informing them in direct words their performance reviews,
expectations, and so forth. In addition, when interviewing a German worker
for a job, they will tend to describe in clear terms what they are capable of
doing, rather than speaking in vague terms like in other cultures. German
workers tend not to oversell themselves in an interview; if they claim they
are capable of a task, you can generally bet they are capable.
Dress in Germany is professional but not as clearly defined as in the United
Kingdom, USA, or many Asian nations. Women often wear dress pants,
rather than dresses or skirts, and men often wear sport jackets, as opposed
to black or blue suits. Despite having a woman president as leader of
Germany, women in Germany still lag behind women in other European
nations in securing top-level management opportunities, partly because
women are not majoring in the technical fields as commonly as men; seniorlevel jobs generally go to individuals heavily trained in key technical areas. The Future
China overtook the USA in 2012 as BMW?s biggest international market,
with the company?s sales in China rising 14 percent to 28,597 automobiles
and motorcycles. ?Looking ahead, we expect the headwinds in Europe to
remain,? said Ian Robertson, BMW?s head of sales and marketing.
?However, we are confident of healthy sales growth in other regions,
especially Asia and the Americas.?
BMW borrowed a new retail concept from Apple stores, which was tested in
the United Kingdom, by rolling out its version on the Apple ?Genius Bar?
across Europe. The iPad-equipped, specially trained ?BMW Genius
Everywhere? staff will give customers information about vehicles and
features, but they will not sell cars. The new BMW employees wear a white
polo shirt that says ?BMW Genius,? but they are paid a salary, not a
commission on sales. A pilot program for the ?BMW Genius Everywhere?
program will began in the USA in late 2013, with a full launch by early
2014, which is when the new BMW i3 electric car is set to go on sale.
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