BMW Investments in the Business Sector - Research Paper Example

? 23rd: 03 Analysis and recommendations for BMW Executive summary BMW group has remained one of the top-selling car manufacturer having almost a million and over cars sold. It has continued to be the largest leading manufacturer of cars in terms of sales volumes. There three brands, Mini, Rolls-Royce and BMW have also been able to set individual records. Over 100,000 people purchased BMW in the year 2011. The report seeks to provide an insight into the analysis, over and above, the recommendations provided to the company. The introduction provides a brief profile of the company. The report will also provide the current status of the brand as well as its investments in the business sector. Challenges that are being faced by the firm will be provided including recommendations necessary for implementation in order to realize success in the company. The recommendations should be taken into consideration if significant success and consistent quality are to be enhanced. Introduction BMW is short for Bavarian Motor Works which began in the early years of the twentieth century. It first began as an aircraft engine manufacturing in Germany. The success of its 6-cylinder BMW IIIa engine saw it become a publicly traded company (Easton, 2008, p. 1). The license to manufacture automobiles was obtained in the year 1928. Throughout the years, it has been able to gain reputation for innovation, as well as, quality in the automobile, aircraft engines and motorcycle fields. Its reputation has continued to grow owing to its award winning performance and impressive designs. BMW was listed by Forbes.com as the most reputable company in the world in the year 2012. The rankings were obviously based on such issues as people’s willingness to invest in the company, to buy, to work for and to recommend. Their perception of the products and the company were useful in the rankings. The BMW group sponsor is Bundesliga’s club and was also an official sponsor of the London 2012 Olympics. In 2010, it made a six-year sponsorship deal with USOC which is short for United States Olympic Committee. It has also sponsored many European golf events both in Italy and Germany. Status of the brand The brand has the right products that they have put in place, and they have continued to keep them competitive and attractive over the lifecycle. They have a lifecycle that follow a specific nomenclature. The nomenclature is applicable for both the automobiles and the motorcycle (Giuliani, 2012, p. 8). The brand has its presence in the global world and has the knowledge to delight customers around the globe. The company is looking into expanding globally to ensure that their innovation is present and known globally. This will also lead to an improvement in their reputation as well as in the loyalty of their customers. Their impressive and unique designs have ensured that the brand sticks to the minds of people. The brand is strong especially in innovation and efficiency of fuel. They have an aim of directing the future of the market using its initiatives. Their innovative initiatives have seen the brand grow stronger and have a competitive advantage over its competitors (Giuliani, 2012, p. 8). They have continued to provide luxury and unique brands that offer a different experience. This means that they have managed to further the joy and fascination of the brand. Their earnings and revenues have grown and have also broken all existing records. This is all in the back of dynamic flourishing of financial services business and car sales volume growth. The earnings were strong and increased in a tremendous way. This is the reason why the brand is strong as opposed to the other car models. Investments in the business sector The brand is striving for a good balance of growth especially in Europe, Asia and America. This is essential especially if they want to achieve economic success in a volatile environment (Annual Report, 2011, p. 15). The group had discovered that there is future growth in such countries as Russia, Brazil, India, Turkey and South Korea. Their intention is to capitalize on that potential. The group seeks to tap into the potential available in the mentioned countries in a bid to increase company recognition and reputation. Today’s market is very dynamic, and it requires that each firm achieves its competitive edge through the stabilization of growth. The company is seeking to expand their international existence in a global world. The main endeavor of this is to give the company greater freedom from currency and market fluctuations. This thus promotes their long-term success and will enhance their competitiveness (Annual Report, 2011, p. 15). It also aims to secure jobs around the world and also in Germany. The expansion will mean greater competition, which gives the group motivation to produce quality and up to standard automobiles. The company boasts of being the greatest employer making it the most desired place for work. The ideas and actions of the BMW group have been the reason why the group is geared towards the long term. They have involved themselves in strategic alliances with the best of partners. This means that the long-term access to customers and technologies is secured (Annual Report, 2011, p. 17). Their joint venture with Peugeot Citroen and Toyota Motor Corporation has seen them achieve a major breakthrough in the automobile industry. The partnerships have helped especially in the research that is done to identify potential markets around the globe. Their expansion in the fleet business has enabled the group to lay an excellent foundation necessary for the development of modern mobility services and solutions. Challenges faced by the BMW group The group has faced several challenges, but they have been in continued progress towards elimination of the challenges. The challenge is the way in which they can promote competent driving while still managing to offer information, communication, as well as, entertainment functionality (Eckstein, 2008, p. 16). The challenge comes in the way in which anticipations of the route and traffic are strengthened. This will enable the driver to distribute attention evenly and avoid mistakes. Adequate and reliable information should also be provided instead of leaving the task to the driver. Functionality should also be provided in an appropriate way while driving. Most accidents are caused by driver mistakes. This is the main reason why adequate information should be provided. Another challenge is how to ensure that all types of systems are made and designed according to the ESOP. All system types have a requirement that they should be designed to the same standards. This is because the driver’s capabilities and abilities are always similar (Eckstein, 2008, p. 15). The installation of systems should also comply with the EMC certificate, passive safety and driver’s field of vision. The certificate only allows the use of the system while driving. The growth, profit margin and earnings of BMW seem not to have a complementary relation to quality. Some reports have shown that, despite a great reputation of the company, some ratings have awarded the group an average-to-low rating as far as quality is concerned. The quality issue has affected the various brands being produced by the firm (Easton, 2008, p. 2). If the group focused on consistent quality, then the quality ratings should have shown a steady trend and growth. A measurement was done and was discovered that the BMW brand had 126 problems per 100 vehicles manufactured. Recommendations The BMW group should do a classification of functionality and tasks. The primary task should be that of driving. Therefore, the driving task should include such functions as navigation, stabilizing and maneuvering. Such functions will enable the driver to choose route, choose the course and speed and also operate steering wheel and pedals. The secondary tasks should include that of communication, entertainment and information. Another recommendation will be to provide competent interaction, which means making decisions in a timely and correct manner. The driver should be provided with assistance functionality so that anticipation capabilities are increased. The driver will have the ability to anticipate any changes and hence will be well equipped to respond. When secondary tasks are initiated, the driver should be required to anticipate the associated demand and hence match it with the demand that is expected from the driving task. This means that the manufacturers should provide approaches that will anticipate workload timely and correctly. They should include an approach to information management in order to ease the workload of the driver. Through this, driver mistakes will be avoided. The group should also focus on consistent quality on its products, which will see it have a steady trend. The group should come up with a means to eliminate the problems recorded in the cars manufactured. This can be done through thorough research on the causes and how to eliminate them. There are many companies that are in competition with the BMW group and hence care should be taken as far as quality is concerned. This will see the company achieve its competitive advantage over other aircraft engine, automobile and motor cycle manufacturers. References Annual report 2011, Retrieved from http://www.bmwgroup.com/e/0_0_www_bmwgroup_com/investor_relations /corporate_events/hauptversammlung/2012/BMW-Annual-Report-2011.pdf. Easton, E, 2008, BMW’s quality reputation: An earned designation or simply consumer perception. Retrieved from http://evaneaston.com/documents/BMWQuality.pdf. Eckstein, L, 2008, Automotive HMI- Current status and future challenges, Retrieved from http://www.aide- eu.org/pdf/final_workshop/day1/round_table/aide_statuschallanges_eckstein _final.pdf. Giuliani, T, 2012, Current status and growth prospects for BMW Group’s Mid-and Full –size vehicles, Retrieved from http://www.bmwgroup.com/d/0_0_www_bmwgroup_com/investor_relations /ir_services/_pdf/BMW_Group_AIC-2012_Presentation_Giuliani.pdf Read More