BMW automobiles arian Lenin WW Group is «prominent European maker of prestige automobiles. separations so ince ai, sftware prods nd racial eansces: ths case dels ony wih te group's atoncches 4 ftareaueed and sold oer ane milon vais unr tse brands: BMW, by far the lpecs reaurchof he Bish ion smal automobile tom the 1960s end the Rats oye, of whitey 3tod be ‘Phantom’ mode 2068 Foowing the faire to grow mart share and tm rang et "by acauing the Bsn group Rover, the Group in the ea 20000 adopted an agers tat erga wth Tha est as teach org nba of mods arash pea ey and a robust poly of mat development. ; automobile industry in sconomy expeenced 2 shrp downturn in 20, nid 2000s ‘which sted wet into 2003 when some Sgn. scclenton were experened espe inte US 5 sutomobies were produced inthe late economy, Equity pes had fen ust! lt rity but the automa industry became 2003 this coupled mith goopelital tno, Scant employer snd an economic force concn about ol sapple, nde tote ter he Second World War, when national tainty about the economic and pallial en Uesbegentoberebul. Wh theendof the ments. la this cht ales i oot Indust podction and manpower that makes atound the wottd decline, wih, ed he wa efor ete deployed orebld cures and provide peop mith the con Soods that were not valle {he war. Autamable production tay prominent in the US, but ope ter Ata especialy Japan, ‘ually important force. By por ofthe 20h century, the Tne inustey wa lob ture Stomoble production wae con ‘Vin Give companies - General Tord, Daimler Chyler, Toyota ‘sagen face Exhibit Inber of envionment cecum atfected the ingyen Sof the 2s century The globalQD = eorana nt 1 00 cine in the atomobe art in US was pac: sia severe “re mid 19905 atomodile producers score to impowe engineering 2nd uaity of ‘Shes es toe to competitor aang oF Ten ceca to ah op with competion, but ‘yeas ater these wn wey eto ientine ‘Sedncbis produced by many ofthe major com eee pcretoe in the st er years the 218 eae puja inthe atom Inds 38 = Stepped ap pie competion. A betty ove ‘Ries at round 30 pr cent in the oe is ‘BPtnaat at's fot f meal chased ite money, ‘Bhnng Tom prc or Incentives ~ most the fem ate nseance, 0 per cen terest on tine purchase = the pevalent means to space ei hare om compen. However managers vr aly aware that competing on pice mas Dot nell fo anyone in See medi fem, 2 Aepvesd the pofiably ofthe whole Sada: tomers expecatonr would become 2 very ewer buts t Ineesing prices Matt, The Fest was that ae wel a lng sea cm ic sod them at ower pice the consequent pression of potabiywos ely to afte ely te ae ating fos pressing We cost ti womowing a niga scenario. Ts mas UE ‘pcly ih repartee USAS ig OE, Ford, GM and DaimierChyslet the ger Buropean a companies a aso ura rau depres emand ahd ovesi7eY, teh Vtiragen's ros ling by 4 pe en the vecon quae of 2003, Fat was abo ENG Cathe ve ar compari in 208 emg) aa co ver [ron er vest | poimeciraior 288 sass Te eat 1530 ohne seo a8 ard to gt ou fa serious css by resusing he company ad renewing the Gull mode ange ‘er te puitance of the CED who had ued Sa tne fortes of Pre, te re ner. Soca te ey ae all out on Fa’ ances of ‘changes in the basis of competitive ‘advantage ‘Byte ml 2000 he ca mates ws teeming wih Po gatity ene, but consumers fond Wey fe eth ang beeen many of te svable Tees a models Quality was no fonger an se iehe indo most models were well ui Da ‘Sms for example, the ql of US ato tee: had improve 24 per cent fom the Be ‘Joun Tegap Baween te best and worst US Tens ch a 212 dfn pet 10 wees Eifooe:nesranomed 053 defects? Amos inevitably, te dsingusing elements an tetomen! hole factor had Beco ES {24 and apes as demonseate by thet at ‘Bipasha piven aeton whe Wok’ of tha automates had bulk powesal brands (pte a at ater han losing aretha “Tu ranaation made design he fst weoRO. in te Gg for saet share a the feature that Tanbed stones’ attention. Nataly, boo: Fak up deg st aor plank of teeMon iyeeomen |_Msscnsttceprent |__Panbmsnmert |_ Lay sgnan Sc tat ey pepo a aa er a “tegy and spe hunt for op eel designs he promised rewards wees enough ete {st aes who were then proved wth Ish ightch dgn aborts nd at studios Ts "stegy was tfodden by companies aco pie na vetude type range, owes, pursing quality and appeal indesign os ptng pressure on companer outs 50 ' brand bling and management, which was ‘en smote demanding and ith hat cen Sul. had become ees tha x brand dently 5 one of the most affective ways to be mote empetive ina indastry where mee and more ‘cs came to the mathee Ba simple sve ‘ng mas not enough. In the US camaets ha fet more than $80bo (= €41bn) on martin alent to $2,900 fr every at sid Yet tele imbined US market shite hd fen by mre a4 per cent amounting toa 3150 os Etc branding esablshes emotional con- ‘tons betwen castomers on one Hea pro {5 salen, other wes on the the & pe ample of sucesul banding was Toyota veyed te preepon of hgh uaity and ue Dnomy, creting’ the emotion connections of relisbty and smart environmental amaenss BMV conveyed the image of he alimate dng ‘machin’ een t thow cusses ho bog ‘osels with small engines and automatic want ‘sion, saya Seis. The reson fortis was that every model ase a sea general peptone ‘motional connections generated by the othe band 6 well some Species relat to the model in queston. The common theme ofthe ‘rand confer even #9 the lest specie ‘model certain aura Tas proces fd towed 9 long way ftom te concept of product ra, lor example Ford Mode “This snot to sy that the product wa ani portant. Research condicted in 2003" demon Sate tat consumers, bed oa tek et 20d Indect expecence, meanired diferent Bab Peformance agunst two overarching ier Froductexeetence and con of ownership. The Searchers ao sed thatthe eative mage (oF product exealence and low ct of omnes Sintdetermines 4 band’s value propostion in the marketpice’ The brands that at poston In 3 come rea of the competitive space sult Daiculary fom competition and tee prot "ect Te psltons reported in Exh 2 tend ‘0 berather sabe over te BMW Group Origine Nas sablished during the Fist Would Wat ‘manufacture engine in 148 the company nos sill Gemany’ leading manufac of to ‘gine. Subsequently vee to hat 23000 were is Tain pods automobiles sot ‘otreycles. By then BMW wat one of Germanys Ingest and most ces companies, But BMP ‘ox 10 sustained sucess war aonb one ad In 2000 the hodzon wasnt lon. The grasps ‘xtviles were conceited. tmost excep on two produc ange: high-performaner soos automobiles and motoryels The foc of tit ‘eon automebies. ‘The march te success ‘the en ofthe Second World Wa, oth ae lnes market ands capil equipment were der setoas teat. The demand for aer- engines Geusay having lst the war, had copoly Spear and HS main toy was now ne Soult aeruption zoe. These whist ona ‘Wes Geemany expentenced an esnomic tac, SW stg. Uncertain it etn the cs Pay concentrated on automobile prcsion Dat without focus products sanging fom ‘ull babble as, ule under lence lage moun in 1959 BSW faced bankupicy, when "found power shareholder Canna ‘0 could see the company’s leet stents yond the cumen feuter The tuning pent ein 1961, when it launched the BM 1500, ‘hich "soon established the BMW setomotg "and as one wth a reputation for engineering tn the 2st century, the scarce rsures that ‘is ntuence atonal competitiveness hey the sls displayed bythe workforce One of feminys istincive national cues was a ‘HRY auaied labour fre tat could be wed '.Scanan manufactures a3 suse of compe advantage: Mat of such advantage Went Bite atometies TAT Companies hat, ke BAW, managed to bald & ception of valuable diferences th nds of the bers It was lfc to singe ou 3 specie tesoure that undespinnet BMWs sce was ster 3 sete of factors and the way they combined to ‘usa ts competitiveness. BNA automo Poweriulselable and taro, but not ace ‘only so, BMW's chology had ben sovance, butt exceptionally innovative er compare, for example, wit Ctuoen ie somobile, were ‘onvestonly designed snd tionally syle, they were expensive, ren conietng te hgh level of speciation oe by test model with ‘etal margins comparatively high, The company ad gly conto Is dsrbtion nctwork, to "eb of and management communication ad ater sevice. eg low to the buyer had ao atlomed them to segment he mat flctiey for example, BMW tunebite have ‘een postoned dfrsty and pried iferenty In the vious national markets BMW aso exer ot a fim conta on the supply an and Sea Ings and aston mth supers, who osy had mainsined a ong station With the com ‘any. That combination, a sytem of peo {hat gave the company advantage in ts ehonen Segment a reputation for prodit ualty and 2 ‘and which mmedaey ents the a ond ‘spiations ois eustomes, by them 1990 ad but MW into one ofthe most pole nate ‘mobile manufac inthe word The BMW brand abo aequied a distinctive dently as a symbol for young fuer Eos ‘ean profesional most dives peeved high Peformance saloon tomsbles ts symone With MU. They had been able cts their proton around an easy 10 summarise {heme The ulmte diving snare Estey Troyanosermade ote in 200 When a person lt nto a BNA showaom, the question nt “Which model do want I, “Hom much BW can fn [BMW's postion in 2008 In 2009, Rayeriche Motonen Wee (BM), the 1B0up tat owns he prestigious BNW brand war ‘ne of Europe’ tp automakers BNW atoms soe hey hy a naDiommpeee oRneus, ee lr! sccounte fr about three quate ofthe group's Ses. The company’s operations slo inl motores, software anda growing fant services sion. The tmoverof the Group in 2108 was over €41.53bn (= 27 Sn), down 21 pet ‘ent over 2002 mostly due othe engin ofthe € fone he USS (counting this eee, the growth in veverue over 2002 would have been 42 pet ent. Gross margins, of € 2, were down 2.6 pet ‘ent om 28 per ent of 200, 2 eeton of te "owing expenature tn prodct and make deve ‘pment. The group produced sn annual Srp of 320m, 36 percent lomer than 200 the die nce was mosy du to change inthe elation forex proven. “Test esuls nee even more wearable con sidered In the ght ofthe generally downwats {tend in the aotomodie ncaty's potty ‘BMW sutomebile io 2003 employed over 104000 worker In plants in Dingling, Munich and Regensburg in Germany, Spartan the 1s, Rossy South atc, Oxia in the Und ‘in China, They produced over milion BBO Min and Ralls Roye eas OF these, 928000 wee MV automo, up 16 percent on 2002 fact BMW had achieved some smackably rogesive agreements eth the woke’ unons, and wes operating Some ofthe mos lee and ‘oducve plants In the sstometie indstiy. & scraptartatemengec usr areca tae Sraencieta a ee ae Sccuratnemenae ne Srnwrimeaate es Seon rat encanta Scanners SEeraneest a sate smmercnetean ciare‘Automobiles delivered by the BMW Group in 2008 (1,000 units) ee Pe Se SP LOO LE LE ff China wout te soured eal scoring to CEO The markets ‘heimin makes for BM automobiles have bes Were Europe, the USA, Japan and the Pace ‘os, with the mutts of Geran a he US Secon for almost hal the ttl car sl lngotot martes have also been the fs ing Ukand the lian, French ae Japenee mares Sales i the USA tarket have ben partly Sues as they grew by over 8 yr cet onthe Devious year to 277,000, bes the biggest fark for the group and overtaking te Leas and forte fis me. At the ed of 2008, the | giteok for 2008 by group management ant | ads observers wat upbeat, This ew wats Parc by the sacs launch ofthe new Sey {Be onoliston in Eatope and Aa ofthe BAW 24 and he nsodueon othe BMW XS. The new Seis and the BROW 6 Svs cbt were 2 launched early im 2004 By far the ost ul model ete the MIN the eres sad "FT 2820, ‘he Sstres, but the other models wer ako in Signcant demand, inthe Chinese ates tere ‘os gong demand for he higher end mod! of the range specially foe Zee and Seren” anit 4 shows the deals of automate stein 2008, The future In the ay 20005, the sz of the company and the tange of mode continued to Be chur for concen. Inthe mid 1980 they had taeled ‘oth problems by taking ove Rover of the UR. However, the venture dd nt wk snd ems 04 sexy end fie years ater, wen the had oe the Bese company forthe um of £10 (#830, The Quandt family had put presre on the Groups ‘manages 0 slop Rover's haemorthagi loses fstimated they were In the region of 00m per Yat. The CEO, B. Pcheiny,tesgned afer t ‘Horm meting withthe sarsolders Miberg ‘he new CEO, had to det wit the mesy seq on and dispose of They vtained the MINTBMW's top ten markets 0 Fon USA Gemsry UK fay aapan Fnce Span Cine Gebun Aten brand a sold Land Rover, preouly pt ofthe Rover Group, to Fo “Te aur 35 We as ausing the os of reat eal of money and of publ as, ad aie et the {.0up with two problems sll unread. They ‘ete sl ede more than 9 niche player, come Ding witha nant of modes Alo hi ie ‘es sll modest when compared with that ofthe tig ive and lef them vulnerable to Soqtston it the Quant amily wee to decide to dose of Suc smcunt of heir hes 1 2002 Helm Fan, sel pi, had ‘become the new Groups CHO, and sated at gy of intra! growth trough make and pd {SE development tn 2003, BMW was planning to rch 3 te model eer thee months thigh 10 205, providing ange af premium automobiles thar ranged om the Mia tothe Rol Royce “Te am wast alse sles by 40 pet cet yea for the nest Ste year, and to aleve of Ite lon veces, Mercegertens woud then become number two produe of premium car, and BMW's Tong term ambison of being number one ould ‘efi ele” To achleve the gets nad sete the con puny was pushing hard inthe US and. Asan ‘arkets to ind buyers forthe highend modes ‘that they ha ound fiat os inthe at Saturated European matt, Dials in desing ‘nts labour cost contol nthe European pole Climate nad aio led BMW to expand i pre om faites in the US, where the Spartan Plant was not unning tl potent, and Cs here a well quaied labour force cont mich ss than i the West! Twas an ambos plan ht i Seems, a wel br giving the group peter Prominence and poftabliy would so efecto) ure the probe of sine to aeqlstion= ut the strategy was not without se Te smcerconneced fates eed to BA ed ‘nt ofall ncesing the output atthe eve planned by the company, could theaten the wey feason for BOWS gent aces aston, bt single, theme summarised by the line the utmate ‘ving machine. They nd been able 10 expo this brand ientty very poftabiyand sal wherever thet nie coud be found. Tes 899 doube thatthe brand could be extended ad tat {Be theme woul tl ecg and tne out go without easing damage was 2 mate of ‘pecan, How would the Inch oe Be pereived by buyer, and perspective Duvetofthe high-end BMW marl? Would hel pec ‘on ofthe value of he BN brand be neg -Mcced? elated to his tether wa ao the "isk that any model potoned in he penny of 4 more expensive mode could cannile ITor ‘ample could the seer thde! cannibal the See? ‘Secondly, ineesing the production of aller «could have the elle ef edcing the histo ally high mains enjoyea by BMW (ce Exh 3 ‘Moving ite Smale crs sneant ering the lowes ‘args that were typcl of thse the se, ments. Bat compton in thew segment ee olume products with lower costs then BR Would BRC be abet ep pie premtums lg enough to maintain their Potty lee? The Premium pice automate marke ting oe ot "he few potable ones, ws ncensingy roe, ‘ore models cme oat ad new ene nag ‘loathe te. The real ws tht pie ens pelo, whieh started when Lens had terse the US market in the mid 19905 nas xing pce Im sac a competi climate, the presure fon to save cos Dy sharing’ components and Bw aaometies TAY pisos amongst mods, fr example beween Sere aod 13. However, this sharing col Tend to 2 fattening ofthe fees of the dient ‘models thas enourging the tania of the more expense mode” ‘Ahi concer was that of uty, With pes sre on costs, thers of aly apes was nd toincresse, The conaquences of quay deere ie ‘the pei segments canbe very heyy as BAW Jeamed wien customers fund ty fc to se the De they ha isle tn the Pai [xpanding producion ‘th increasing cones lng out of manutactring process cnt ake uty contol more aici than It had Been hen aan of modes made BMWs epee vl. IH. Fake was mang ove any ofthese con 20s; edi nt sow a he Aa cunt of ‘ret Conference on 17 Man 200, when hes Sota tomes etn as we ‘iene bog pes