Matylda Sano
S5537916
March 15, 2023
International Business
Word Count: 650
Individual Case Assignment:
BMW
Introduction: Bayerische Motoren Werke, also commonly known as BMW, is a multinational-luxury automobile company from
Germany (BMW, 2024). Founded in 1916, BMW’s mission statement, “ to move people with products that evoke emotions”, reflects the
company’s goal for customers’ positive emotional responses and heightened mobility (Martin, 2024). Furthermore, the company’s
vision “to be the most successful, most sustainable premium manufacturer for individual mobility”, depicts how BMW aims to be not
only good but, the best premium manufacturer of automobiles across all criteria (Martin, 2024).
Problem: Though being a successful company across various achievements and metrics, there are still certain areas in which the
company could develop in order to improve and ensure long-term success (BMW, 2024). Moreover, with growing demands for
comfortable cars, it has been predicted that though BMW currently has one of the leading market shares, in the future it might not (Biz,
2024). In simple terms the company is not expected to do as well as it could. This leads to one of BMW’s problems which is market
differentiation. In the constantly developing luxury department of automotives, BMW needs to stand out to attract and retain a large
and loyal customer base.
Alternatives: There are various strategies in which BMW could improve their market differentiation and allow them to stay relevant,
innovative, and simply appealing. Two of these alternatives are listed below:
Alternative 1: Lifestyle branding
By improving BMW’s position as a lifestyle brand, and not just an automotive industry, not only could BMW improve their market
differentiation and retain a larger, more loyal customer base but also support their mission of emotionally satisfying customers and
increasing mobility.
Strengths Weaknesses
- Strong Brand Recognition: Already a highly known company, - Luxury standpoint: Due to BMW’s target demographic of the
stable and safe foundation to build off of. wealthy it could be difficult to develop lifestyle branding that
- Exclusive Resource Base: BMW has a strong resource base as appeals to all without diminishing the company’s image.
well as good understanding of their customers’ wants and needs. - Competition: Aggressive competition from other luxury
- Diverse Product Portfolio: The company offers a wide range of automotive companies that already target the lifestyle segment.
cars that can cater to various lifestyles.
Alternative 2: Acceleration of sustainable technology and electrification
To improve BMW’s market differentiation and improve their customer base, allowing them to continue to hold leading market shares,
the company could improve their sustainable technology and electrification. If BMW were to do this it would not only appeal to the
demographic of the rich, but also the environmentally conscious new generations, both for many reasons.
Strengths Weaknesses
- R&D Capabilities: The company has a good history of R&D and - Challenges With Transition: The shift from regular internal
innovation capabilities which can drive technological combustion engines to electric cars could be a time-consuming
advancements. and difficult process.
- Financial Resources: Being a highly profitable company, BMW - High Development Costs: Disregarding BMW being a highly
has the necessary financial resources to invest in electrification profitable company, this alternative would still cost a high
and technological advancements. amount and could negatively impact short term profitability.
- Consumer Resistance: there is some resistance to electric
vehicles among fans resulting from quality of driving experience
and resistance to “less choice”.
Recommendation of chosen plan (including timeline and costs): When considering both alternatives, the recommended plan
of action is alternative 2.
The first stage would be to expand BMW's battery technology development to improve the efficiency and price of the company's EV
range. This might take up to three years and cost between $650 million and $1 billion in initial investments. The next stage would be to
improve charging infrastructure and maybe pursue profitable partnerships. This would make owning an EV more convenient for
customers, and working with governments may help sustain the new infrastructure. This would cost between $300 and $700 million
and take more than three years if done collaboratively and through partnerships. Finally, implementing sustainable practices across
each phase would boost BMW's brand. This phase would take 4-8 years and cost $300 to $700 million, including increased openness in
the supply chain and a greater emphasis on ethical material sourcing, recycling, and waste reduction. In sum, BMW improving their
market expansion to remain a leading automobile brand by advancing sustainable technology and electrification; the process will take
8-16 years and cost between $1.25- $2.40 billion.
References:
BMW, I. (2024, March 6). The International BMW Website. BMW.com. https://www.bmw.com/en/index.html
Biz, I. R. (2024, February 9). 2031 luxury car market share: An extensive analysis of industry dynamics and
prospects. LinkedIn.
https://www.linkedin.com/pulse/2031-luxury-car-market-share-extensive-analysis-3n4de
Martin, V. (2024, January 17). BMW’s Mission & Vision (an analysis). Panmore Institute.
https://panmore.com/bmw-mission-statement-vision-statement-analysis-case-study
