STRATEGIC MANAGEMENT

Strategic Management: Bayerische Motoren Werke (BMW)

Strategic Management: Bayerische Motoren Werke (BMW)

Table of Contents

Introduction3

Strategic Analysis for BMW4

How do we evaluate a strategy?4

Key Environmental Influences4

External Forces7

Background9

Internal Environment10

The Five Forces Model12

BMW Human Resources Policy15

Other forces15

Recommendations18

Bibliography21

Strategic management Bayerische Motoren Werke

Introduction

Bayerische Motoren Werke (BMW), brand, is considered as one of Europe's top automakers. At BMW, production is customer driven. The processes are being continually improved, managed by a logistics Group to achieve prompt delivery and acceptable completion times. However the overall car market has been facing a decline since the past few years. Especially after the Global financial crisis the trend of decline has been at it's highest.

The decline is brought about by lower car demand in North America and Western Europe, both relatively mature car markets that have been adversely impacted this year by high energy prices and fragile consumer sentiment. (Avery, Gayle, 2005, Pp. 45)

The automobile industry is becoming more and more competitive, with 6 major Groups which have been formed in the last 3 years. These are the Groups with which BMW will have to compete in the years to come and form a particular threat because of their dimensions.

Strategic Analysis for BMW

Strategy defined:

"Strategy is a perceived pattern in actions past or yet to come. It is a label applied to patterns in action" (Lencioni, V., 2003)

How do we evaluate a strategy?

"Strategy evaluation requires a consideration of both current and likely future results against the resources committed to the strategy" This is only an overview of the major concerns and findings from the various analysis carried out. These can be found in the Appendices at the end of the assignment.

Key Environmental Influences

Like any modern industry, car manufacturing today is strongly affected by external social and environmental pressures, which influence both current production practices and the development of future products and technologies. Environmental standards are mostly set by government regulation and even associations within the automobile industry. The main law regulating fuel quality standards is the federal Clean Air Act (CAA), passed in 1973, with added amendments in 1990 (CAAA). These acts aim to protect public health and the environment from harmful gaseous and particulate emissions from motor vehicles and engines. As anti-emission laws get stricter every year, and companies look to double or triple their fuel efficiency, alternative technologies are being developed to replace the traditional gasoline engines, and have started to hit the market. (Avery, Gayle, 2005, Pp. 49)

Increased fuel-economy and decreasing vehicle weight are gradual changes that slowly improve automobile performance, disruptive technologies include new fuel sources such as electricity, solar energy, and fuel cells. These new sources alter the entire production and operation of vehicles, and create shocks in the market. Government regulations regarding social and environmental standards have influenced automobile production most directly, but technological progress and manufacturers' proactiveness in research and development have also caused industry changes. Although the more stringent laws can eat away at companies' earnings, they also provide the stimulus to develop new technologies and ...