The employees are one of the biggest internal stakeholders of the company. It is in the employees' best interest that the company succeeds in its objectives because the stakeholders share in the success of the company. For example, the continued success of the organisation gives the employees a good reputation, and furthermore, job security.
BMW suppliers share in the success of their client. The quality of BMW's final products is due to the quality of the parts used to assemble them. The supplier company develops a higher sense of good will and quality awareness among customers and potential clients.
Shareholders are part owners of the business. Like the company itself, the shareholders want the business to make good profits so that they can get a healthy return on their investment. They have limited control over the company - depending on how much percent of the shares they own.
The government and other external stakeholders have various expectations from the business. For example, the government is interested in collecting taxes.
Apart from that, they also aid suppliers and other businesses in socially and/or economically deprived areas. This helps the economy of the country grow as a whole.
Pressure groups, such as Green Peace, have a very different objective from most of the stakeholders. Their aim is to monitor and influence the ethicalities regarding the environment. Pressure groups normally have a significant amount of power and influence. BMW is not interfered by pressure groups as it already has made an initiative to preserve the natural and social environment that they affect. But not now may be in future.
Professional bodies aim to ensure that the employees of an organisation comply with legal/ethical regulations and guidelines. Their main interest is not in the performance of the business, but rather in the welfare of the employees.
Responsibilities of BMW
We assume responsibility." This is the philosophy behind the BMW Group's involvement in society and social programmes, which have such goals as:
- Increased road safety.
- Promoting understanding among peoples and opposing violence.
- Educational projects in kindergarten and schools
- Creating understanding and mutual trust in communities where it is located
- Fighting HIV/AIDS.
The BMW Group has chosen these areas for its socio political commitment because they reflect its corporate culture and goals. The company strives to contribute actively to the preservation and development of society in the cities it is located as well as their outlying areas. The BMW Group's view is that children and young adults are particularly important because they will shape the society of the future.
We are all responsible for sustaining and protecting our natural environment. The BMW Group is called upon to conduct responsible and sustainable environmental policies, which are also economically viable. With regard to its products, one of the main environmental aspects on which the BMW Group focuses is lowering fleet fuel consumption, which is achieved using modern engine technology and "intelligent lightweight construction" to optimise the weight of the automobiles. The company goes one step further with its alternative drive concept Clean Energy.
To ensure that production is environmentally compatible, the BMW Group's production plants are certified according to the international environmental management systems laid out in ISO 14001, or validated under EMAS, the European Union's ecological audit system. This means that the BMW Group is the first - and so far the only - automobile manufacturer to have established internationally valid environmental standards throughout its production plants worldwide. This requirement is also confirmed in our international environmental guidelines.
BMW Groups management responsibilities are based on eight principles. Those are below:
- Mutual respect - a positive culture of conflict.
- Thinking beyond national and cultural boundaries.
- The performance of our employees is the basis for remuneration.
- Team performance is more than the sum of individuals' performance.
- Secure and attractive jobs for committed and responsible employees.
- Respect for human rights is a given.
- Social standards for suppliers and business partners are a basis for doing business.
- Outstanding benefits for employees and a strong commitment to society.
A free market economy is one where economic decisions are made through the free market mechanism. The forces of market demand and supply, without any government intervention, determine how resources are allocated. This is known as the working of the price mechanism. What to produce is decided upon by the profitability for a particular product.
- When demand for a product is high, the price rises and this raises the profitability of selling in the market
- High prices and high profits provide the signal for firms to expand production.
- Supply from producers responds to consumer wants and needs expressed through the price mechanism
- The consumer is said to be sovereign - their "economic votes" determine how resources are allocated
A command economy is one where all key economic decisions are made by the government (or state). The government decides what to produce, how it is to be produced and how it is to be allocated to consumers. This involves a great deal of economy planning by the state. The price mechanism has no active role in a pure command economy since market prices are rarely used. By state planning, goods and services can be produced to satisfy the needs of all the citizens of a country, not just those who have the money to pay for goods. Over the last decade, many former planned economies have attempted to bring market forces into their economy.
A mixed economy is a mixture of a pure free-enterprise market economy and a command economy. Nearly every country in the world operates a mixed economy although the "mix" can change. There is a private sector and a public sector in the economy
In recent years many command economies have become mixed economies. Examples include countries that were part of the former Soviet Union. To become a mixed economy, the role of the market and the private sector of the economy must be increased. This can be done in a variety of ways - listed below:
- Privatisation of state industries
- De-regulation of markets promoting increased competition through the entry of new firms
- A gradual ending of state subsidies
- Encouraging foreign investment into the economy
Impact global economic policy on UK-based organisation and stakeholder
The Global economic impact is likely to be significant, generating a 'sharp but only temporary decline in global economic activity'.
The main impacts on businesses are likely to be:
- High absenteeism, as people may be asked to stay at home, or may choose to do so to care for sick relatives or because of fear of being exposed themselves.
- Disruptions to transportation, trade, payment systems, and major utilities, exposing some financially vulnerable enterprises to the risk of bankruptcy.
- Demand could contract sharply, with consumer spending falling and investment being put on hold. Financial repercussions could further exacerbate the economic impact.
On the positive side, once the pandemic has run its course, economic activity should recover relatively quickly. 'Both consumption and average hours worked might even overshoot the pre-pandemic level temporarily. The pace of the recovery would depend, inter alia, upon business and consumer confidence, the speed of resumption of international trade, and the recovery of asset values.'
For identifying the influence factors of the external environment, two different analyses can be used. The PEST analysis deals with the remote environment, whereas Porter's five forces handle with the competitive environment.
PEST analysis is concerned with the environmental influences on a business. The acronym stands for the Political, Economic, Social and Technological issues that could affect the strategic development of a business. Identifying PEST influences is a useful way of summarizing the external environment in which BMW operates. However, it must be followed up by consideration of how BMW should respond to these influences:
The political arena has a huge influence upon the regulation of businesses, and the spending power of consumers and other businesses. You must consider issues such as:
- How stable is the political environment?
- Will government policy influence laws that regulate or tax BMW?
- What is the government's position on marketing ethics?
- What is the government's policy on the economy?
- Does the government have a view on culture and religion?
Marketers need to consider the state of a trading economy in the short and long-term. This is especially true when planning for international marketing. You need to look at:
- Interest rates.
- The level of inflation Employment level per capita.
- Long-term prospects for the economy Gross Domestic Product (GDP) per capita, and so on.
- International economies and trends
- High competency within the market. (From company is such as Audi, Infiniti, Jaguar, Lexus, Mercedes-Benz, Porsche, Saab and Volvo)
The social and cultural influences on business vary from country to country. It is very important that such factors are considered. Factors include:
- What is the dominant religion?
- What are attitudes to foreign products and services?
- Does language impact upon the diffusion of products onto markets?
- How much time do consumers have for leisure?
- What are the roles of men and women within society?
- How long are the population living? Are the older generations wealthy?
- Do the population have a strong/weak opinion on green issues?
Technology is vital for competitive advantage, and is a major driver of globalization. Consider the following points:
- Does technology allow for products and services to be made more cheaply and to a better standard of quality?
- Do the technologies offer consumers and businesses more innovative products and services such as Internet banking, new generation mobile telephones, etc?
- How is distribution changed by new technologies e.g. books via the Internet, auctions?
- Does technology offer companies a new way to communicate with consumers e.g. banners, Customer Relationship Management (CRM), etc?
The growth share (or BCG) matrix of GME:
B.C.G. analysis the technique use in brand marketing, product management, and strategic management to help any company decide what products to add to its product portfolio. It also involves rating products according to their relative market share and market growth rate.
GME needs some problem child business units because GME have low market share and high growing market. GME's problem child is its new hybrid car which is to be launched in a growing market; however it will not gain a large market share without heavy advertising due to its late launch. The future of GME's European sales will be with this range of car.
Benchmarking: GME can achieve the highest levels of performance; establish the best processes and increase competitiveness in order to enjoy higher profits by using benchmarking.GME business strategies are not well defined. However they need revision based upon the new threats and demands. Car manufacturers have to be seen doing their bit for the environment, use less fuels collaboration with Toyota to learn more about its Hybrid cars. The total manufacturing cost at GME was about equal to the industry average for that component. In such a case, GME might assess that such a component might benefit from outsourcing if a lower cost could be obtained from an outside supplier. GME would therefore consider this component as a candidate for outsourcing based on this criterion.