BMW Success & Change

What changes can BMW implement to stay in its “success track”?

BMW management need to find new markets for its products and make strong corporate relations with buyer. As weak business communication had been in Western Europe due to short term contracts with component supplier while Japan holds a massive market. BMW can bring following changes to keep track of its success in the market:

Incremental Change :

This change aims to improve the existing systems, policies and procedures, Its a process that adds new functionality and new properties to software. It's an essential part of software processes such as maintenance, evolution, iterative development and enhancements, and agile development. Because of that, it plays an important role in practical software engineering.

Strategic Change :

This Change aims to establish new systems, policies or procedures within a organization. It can be affected by the states of firms and their external environments. Because the performance of firms might dependent on the fit between firms and their external environments, the appearances of novel opportunities and threats in the external environments, in other words, the change of external environments, require firms to adapt to the external environments again; as a result, firms would change their strategy in response to the environmental changes. The states of firms will also affect the occurrence of strategic change.

Transformational Change :

The transfiguration from one state to another that is fundamentally different. A shift in the business culture of an organization resulting from a change in the underlying strategy and processes that the organization has used in the past. A transformational change is designed to be organization-wide and is enacted over a period of time.

What role would a manager play in such a change of implementation?

Wolfgang Ziebart, BMW's head of R&D, is highly sceptical about the adoption of common vehicle platforms. 'What we do not do is offer cars with the same concept under different brands, merely modifying the body and the interior. As Managers play an important role in any organization, however, their job is to keep a constant eye inside the organization and outer markets as well to increase productivity and equip organization with latest and upcoming features. Managers need to see any increment change within the organization which can enhance the functionality of the product or to develop a brand new product in order to keep share in the market. Sometimes they need to develop a brand new system or product which has been influenced internally of externally. Managers often have to prove themselves as a transformer which means they are capable to bring a transformation into the organization. That transformation can also be called as “the state change”, which means no alteration, extension or improvement regarding past projects.

If BMW was to use the same strategic approach as Ford/Volkswagen, what kind of resistance would it face? And from whom?

As Jaguar has been bought by Ford and it has quality drawbacks due to lack of funds availability, similarly Ford and Volkswagen decreased their quality, development and purchasing costs where BMW remained same as it was before by concentrating and maintaining quality.

Low Tolerance for Change : Maintaining quality is the main resistance which BMW is facing as new motor relating technologies are emerging among other manufacturers, including confusion related to the BMW's own innovative “I-Drive” instrumentation and controlling system. As Jaguar has been bought by motoring giant Ford due to bankruptcy, Jaguar could not maintain their quality standards due to change in organization. Similarly Ford and Volkswagen are trying to maintain their quality and price control but they reduced quality by spending less funds in Research and Development and manufacturing costs. So in near future BMW would have more quality and technology related resistance from other manufacturers.

Parochial Self-interest: “Parochial” means Limited

Misunderstanding & lack of trust

Contradictory Assessments

2. ALTERNATIVE ANSWER 1 :

Change management process is used to make sure that important changes are activated in an efficient and structured way to benefit organization's goals and objectives. The introduction of change in the organisation is not an activity to be undertaken lightly: it will cost money, it will take time and effort, there is a strong risk of not achieving the objectives and, in any case, a lot of people will end up being thoroughly disturbed or stressed as a result. So the motivating reason had better be good. On that basis, this section will outline some of the possible reasons for the introduction of change

What changes can BMW implement to stay in its “success track”?

BMW management need to find new markets for its products and make strong corporate relations with buyer. As weak business communication had been in Western Europe due to short term contracts with component supplier while Japan holds a massive market. BMW can bring following changes to keep track of its success in the market:

Cost Reduction:

By implementing some cost reduction procedures in organization can enable the price of the products to be dropped on the open market, thereby making it more competitive. This will then force the other producers to play ‘catch-up' or to lose market share.

Innovation :

Innovation is the backbone of any organization, with help of innovation managers bring new brainstorming ideas in shape of products. The introduction of a new product or the application of new technology can become the driving force for setting upgraded strategic targets. The company could decide on the new use of an engine with more output but with less fuel consumption or the setting up of a call centre as part of an CRM (Customer Resource Management) policy.

New strategic objectives :

New strategic objectives can be a new political re-alignment, a changing relationship with suppliers or clients, a proposed merger (internal or external to the organisation), a new market opportunity, and so on. Whatever it is, the effects will always ripple down the corporate hierarchy.

Organisation restructuring :

The nature of the new management re-organization defines roles along with the new people who have been selected to fill those roles will nearly always cause a full re-evaluation of every project and budgetary outlay.

What role would a manager play in such a change of implementation?

Wolfgang Ziebart, BMW's head of R&D, is highly sceptical about the adoption of common vehicle platforms. 'What we do not do is offer cars with the same concept under different brands, merely modifying the body and the interior. Managers play an important part in any organization to increase productivity, output and keeping organization progress on the track. Managers need to have a constant and continuous eye on its product's price, quality and sales. Managers can bring a product's price upto a affordable level where consumers can take benefits of that product. They need to spend enough time to change complete or slight change in new or already manufactured products according to the market needs. Ongoing innovation in Research and Development is the backbone of any organization. Managers need to find new objectives, new business relationship with other suppliers and buyers to promote business environment.

If BMW was to use the same strategic approach as Ford/Volkswagen, what kind of resistance would it face? And from whom?

As Jaguar has been bought by Ford and it has quality drawbacks due to lack of funds availability, similarly Ford and Volkswagen decreased their quality. development and purchasing costs where BMW remained same as it was before by concentrating and maintaining quality.

Low Tolerance for Change : Maintaining quality is the main resistance which BMW is facing as new motor relating technologies are emerging among other manufacturers, including confusion related to the BMW's own innovative “I-Drive” instrumentation and controlling system. As Jaguar has been bought by motoring giant Ford due to bankruptcy, Jaguar could not maintain their quality standards due to change in organization. Similarly Ford and Volkswagen are trying to maintain their quality and price control but they reduced quality by spending less funds in Research and Development and manufacturing costs. So in near future BMW would have more quality and technology related resistance from other manufacturers.

3. ANSWER 2

Knowledge Management is the capital asset of employees and has become a standard to gain competitive advantage and productivity.

Steps:

n Identify organization's information or knowledge needs

n Identify gaps in knowledge and latent or tacit knowledge

n Identify expertise

n Create strategies and policies to deal with these

n Strive to integrate processes and systems

Knowledge Management Pyramid

Intelligence:

BMW top management keeps a bird eye view on the market to act properly according to competitor's business plans. Any organization's think tanks are those who have preserved high commands on Intelligence. Intelligence plays any important role in any organization that makes top management to define high level business strategies.

Knowledge:

Metadata means data about data. Data is directly related to knowledge. Knowledge can be anything which is informative and it is difficult to define, in fact intellectualists spend their whole life era to understand and to know something about knowledge. BMW management well knows all nuts and bolts that how their products can occupy the market where they are competing. They know how their business can interact with other suppliers, buyers and manufacturers and to adjust themselves in business space, how their business can be effected and influenced by other competitors.

Information :

No doubt information plays an important role in any organizations progress and productivity. Information comes from data which is more structured and purposeful. BMW management has advanced information communication tools which enhanced business in more productivity way, which are as follows:

§ E-business solutions

§ Application Service Provider

§ Extensible Markup Language

§ SAP R/3 application.

Data :

As every corner of business related strategies are turning to technological based so data is the basic building block of IT systems. BMW is using its main four information communication systems with the help of that they analyse the competency and availability level of data. Data can be collected in many ways the least example of that when a customer calls and enquires about any products in organization, that information is also kept reserved for quality purposes. Customer feedback online is also very important, thousands of customers visit their website and leave different notes about their products.

4. ANSWER 3

Supply Chain Management :

Supply chain management is a set of approaches utilized to efficiently integrate suppliers, manufacturers, warehouses, and stores, so that merchandise is produced and distributed at the right quantities, to the right locations, and at the right time, in order to minimize system wide costs while satisfying service level requirements.

Production :

Consumers buying is unpredictable always it can go high or low depending on various factors like income, population, technology, these all factors can effect production of any product in a region. Therefore companies implement business strategies with the help of future forecasting software which does future forecast about supply and demand. If future supply and demand can be forecasted then production problems can be sorted out and company can have competitive edge among other companies.

Suppliers :

Prospective suppliers can also served with accurate information provided by manufacturers to give supply at the right time by future forecasting. Suppliers should also be informed from manufacturers by replenishment signals to increase quantity and supply at some specific time. With the help of this and to overcome supply and demand issues, misshapen can be reduced among whole infrastructure.

Planning and Forecasting :

With exact prediction and future forecasting BMW can overcome supply and demand issues related to components suppliers. If BMW is doing extra effort to gain competitive advantage and maintaining future organizational goals and objectives in planning and forecasting department then they can increase revenue and assets.

What kind of IS help BMW adjust to the changes in the demand forecasts?

In this technological life anything can be information system which provides any kind of information, whether its information board of Airlines' departures and arrivals or mobile based weather forecast. Demand forecasts can be managed with the help of Sales and Marketing Information Systems.

Sales and Marketing Information system:

BMW is using different information systems to increase market share and gaining competitive advantage, we are discussing about here sales and marketing information system, below is the table of Sales and Marketing Information system where knowledge management can easily be understand.

5. ANSWER 4

Innovation: In today's world, to be a leader in industry you have to be innovative. Companies must be able to look forward at the strategy and know how to bring products to market faster than their competitors. BMW employees are connected with a worldwide network with supplier, university graduates, research analyst in a Research and Development relation. Innovation is the key. It's not just for the technology but it's also for the business strategies as well. Innovation can be define as a breakthrough approach or idea that can be completely new or an enhancement to something that already exists; it is a refreshing perspective that will challenge many who just cannot see beyond what their own experience is telling them to think or do.

Innovation

Areas of Innovation :

Products and services :

In this area of Innovation, it is normally applied to products or services or market related activities. Consumers can have re-evaluation choice strategy of selecting the right product. Therefore, innovation is playing any important role to describe the right image of products and services to the consumers. With more innovative way they succeed to overcome weak links between components supplier and now with the help of innovation BMW is holding the big market share in the world. Their ongoing innovation is helping them to acquire different goals and objectives in the corporate market.

Operational :

Innovation is the key that improves and enhance the effectiveness and efficiency of core processes and functions in an organization. Whether is quality control, price control or customer feedback, all departments from logistics to production are helped by innovation.

Business model:

In this model Innovation fundamentally transforms the business strategies and helps to increase revenue. BMW's business model has deep eye on all business consortiums including production and finding new markets, but specially this area needs intensive innovative ideas to keep productivity pace.

Partnership Innovation:

Innovations also helped BMW to buy motoring giants like mini, Rolls Royce. Companies like mini and Rolls Royce could not survive due to slump in business but BMW kept making business through new ideas and bought these companies.

Portfolio Innovation :

As BMW is making a series of vehicles they lookup the market for that specific product and keep reinforcing to make it an ideal product, price vise and quality vise and all this is not possible without innovative ideas of the company.

What would be the role of a manager in BMW leading an innovation project?

Role of a manager :

Create an external focus :

As Wolfgang, head of Research and Development is performing a very good role in pursuing organizational goals and objectives with the help of innovation. A manager needs to see which areas of market related to its products need to have creative vision of organizational goals according to the external market influence.

Be a clear thinker :

A manager need to create a working professional environment where innovation should be given highest priority. He should allocate resources and extra funds to make for future research and development.

Have imagination and courage :

Think, Think and do should be the innovation policy in the organization to bring brand new ideas in practical shape. He should be capable to take personal initiative on his own to benefit organization with his hard work.

Energize teams through inclusiveness :

A manager should create working environment where people could create strong relations between juniors and seniors. Main point is to energize teams is to make a strong team within organization and to increase loyalty among employees.

Develop expertise in a function or domain :

Change is necessary in any organization to bring efficiency and productivity, but here question rises that who creates the change? Definitely managers who have in depth knowledge of relative issues bring intense functionality in organization.

6. ANSWER 5

Decision Support System is a class belongs to Information System. Decision Support system helps making a decision of person or organization by collecting any type of data and then by giving presentation from a different number of sources. As computer has become the main hub of any communication whether its the stock exchange board in Hong Kong or Flights information board in Miami Airport. DSS is the backbone of any organization's information systems, through this concept information is collected and then delivered to the right destination.

These are the stages of decision support system :

Input:

Data is gathered here and analyzed through various sources and then manipulated for internal or external uses.

Processing :

At this stage data is pursued what kind of data is then it is processed, depending on the uses and then delivered to the relative section for organization needs.

Outputs :

Outputs can be anything depending on the needs of organization, after manipulation data is sent to relative field, either it is Customer Relation Management or its Inventory Control management.

Users :

After sending data to its relative field, staff at organization can utilize it or if it belongs to personal needs.

7. ANSWER 6

There are various ways to communicate by online. As men invented computer and then World Wide Web, so communicating information never has been so easy as it is today. Here are the ways which BMW can use to communicate with its suppliers and customers:

Email :

With the emergence of High tech mobile phones, like BlackBerry or iPhone, sending and receiving emails from anywhere became so easy and flexible. Now mobile phones companies are linked with email providing companies like Hotmail, Google or Yahoo, sending or receiving emails are very much easier than ever before. Managing information to manufacture like Just In Time can be achieved by corresponding through Emails.

Websites :

Dynamic E-commerce based websites helped BMW and other organizations to update information in seconds and deliver data from thousands miles quickly to rest of the world. Website also introduced E-commerce or E-purchasing, with this facility an order can be processed in few time with JIT inventory system and then make it ready to its destination.

Customer Feedback :

Many customers visit BMW website and they also give some feedback about products and other suggestions. Customers feedback is somehow an appropriate way to listen what experiences customers had and what they did not like in their products.

Video Conferencing :

As companies are equipped today with more technological tools to increase competitive advantage. Video conferencing is playing an important role in visual communication. Companies using this technique in almost every field of corporate goals, either its hiring new staff, buying new stock, business conversation, video conferencing devices connected through internet no doubt saving time and cost on both ends.

E-business Solutions :

E-business solutions is BMW's own information support software which is used to perform BMW's business ways to suppliers and customers. With the help of this software they are able to make bridge between automobile components suppliers and logistics service providers. In fact this software is covering the whole value chain of BMW through Logistics to Procurement.

ASP Solutions :

ASP Solutions is BMW's internal information support software. ASP Solutions helps them to keep an eye on their complete competency level. Its equipped with latest information technology tools also which help them to see the financial condition of company. It tells them do they need to borrow money or to buy another company or invest somewhere.

XML(Extensible Markup Language) :

Its basically a structured language which keeps millions numbers of structured data. Fast usage of XML make it a standard of any computer related software to gain quick and efficient results. BMW's management using XML based software which is helping achieving organization's goals and it also compatible to merge with any application.

SAP : SAP is no doubt famous for its user friendly interaction for business use. Its been a remarkable linkage between client and server end. SAP is equipped with multi-databases and multi-currency converter which makes it a desirable user friendly business tool.

Just in Time Inventory Management :

Just-In-Time manufacturing was originally developed in the Japan and so far they have been the most successful in implementing it into their production processes. Its much more than just another way to control inventory, it's a way to eliminate it completely. During production parts and subassemblies are to be available on the shop floor exactly when they are needed. Any part of the production process that does not add value to the product should be eliminated.

Goal of BMW's manufacturing is to identify the perfect process, making the process as simple and efficient as possible. Using a quick online communication, if BMW reduce inventory then cost and time can be saved, where setup time is saved by thirty to fifty percent. The main objective of BMW is to deliver components and raw material to the suppliers whenever as soon as possible they need it. But for all this process there should be a good error free communication and trust between the customer and supplier. We can say BMW management use inventory pull technique rather than traditional inventory push. Consequently production team should be making that product as soon as possible to deliver on the time. All this manufacturing process must be carefully handled to achieve optimum quality. Statistical process control is one of the methods of JIT which is an efficient way to quality control.

There are few important steps when considering JIT, first of all BMW management has to design product according to performance and production with minimal cost of labor and of course less inspections. After securing supplier base, employees mutual freedom, at last product should be deliver to its destination.

8. ANSWER 7

Value Chain and Technology

Value chain is a systematic approach for a firm operating in a specific industry. It is such a process through a firm gains competitive advantage and increases share holder value. Value chain is referred to isolate business systems in to an array of value generating activities. Porter developed a systematic value chain model that contains a layers of activities found to be common to a wide range of companies. Porter developed two kinds of activity factors primary and secondary which are as shown in the following diagram :(MarketingTeacher 2010)

PORTER GENERIC VALUE CHAIN

Inbound Logistics

Operations

Outbound Logistics

Marketing & Share

Service

Firm Infrastructure

HR Management

Technology Development

Procurement

Using non price factors like design, quality and reliability BMW can achieve competitive goals and objectives. Here are all the aspects of Value chain analysis which can describe every corner of BMW systematically:

Inbound Logistics :

Production of any organization's product is based on supply of raw material, if there is no supply then there is no production. By keeping a regular amount of inventory BMW can start developing products in Just In Time as well. As Germany is holding 47 % Europe's components parts industry, manufacturer order small parts which they cannot bother to make from different supplier, its mean BMW does not have to pay extra shipping charges to get small parts. They were shipped within Europe to different car manufacturers to design motor vehicles. Manufactures like BMW created competition among many suppliers to gain the market control. They developed policies like to stick with one or two suppliers with less design work given to them or to buy the whole system instead of buying small components.

Operations :

In operations area small parts are joined together and are shaped into a running car. BMW are committed to develop a more responsive sales, production system where design, quality and reliability is maintained. This is the most important process of manufacturing products in BMW. BMW claim to assemble Rover 75 in ten days, whereas same for BMW own products as well so its mean BMW's operation unit is working very good.

Outbound Logistics :

Products are now ready to departure to the destination, whereas those are kept in warehouses and then sent later to relative buyer or consumer. Gradually BMW started spreading over the map of the world by developing business manufacturing units in almost all developed countries, like USA, Australia, South Africa, where demand for BMW was quite high.

Marketing and Share :

BMW's marketing department is working very efficiently by bringing the right price and quality to the consumer, that is why they are still in the market, whereas other many manufacturers are vanished from the market or merged in other companies, like mini, Jaguar, Rolls Royce. The most explicit mechanism to develop a product's reputation is to find the right market. BMW also find out the deficiency of less motorbikes in the market, so they then decided to enter in motorbike industry in late 1940's as well sports car. But they later realised a sports car is giving less profit than a BMW car.

Service :

BMW mainly focuses on customer service, customer feedback and then they act accordingly. As BMW spread among different countries they also established motor workshops, installation units, training and after sales service.

Firm Infrastructure :

BMW is no doubt has got the best management in motoring industry. Think tanks are the brain of any organization, which help organization to achieve competitive goals and objectives. As BMW is equipped with the accurate and immediate strategic and corporative decisions beside these all other department are working efficiently including Management Information Systems.

HR Management :

Employees are the precious assets of any organization. A company can never achieve its financial and competitive goals if its not equipped with the right work force. No doubt BMW has got the best Research and Development, Accounting, Infrastructure, Administration and Marketing & Sales employees, who are taking part and helping to bring BMW on the top. BMW's employees are compensated well so they are overwhelmed and passionate to bring organization's goals to dream to come true. In 1992 with the help and contribution of manufactures like BMW, employment mounted among European components industry who then hired 942,000.

Technology Development :

BMW is maintaining quality of the products through thorough research and development in technology. Technology is the backbone of any organization's brainstorming ideas, which help organization to innovate and bring something new in the market. Its helps company's achieving competitive advantage over other rivals. BMW management is maintaining its market share through thorough research and development and ongoing improvement on its non-price factors like design, quality and reliability.

Procurement :

In this section BMW's management keeps information of all products, materials and other raw materials. Different types of buying channels are used, for example, e-purchasing, tele-purchasing and other web based tools to cover procurement. Many European companies had very weak link with component suppliers to get small parts to manufacture vehicles, therefore Japan took over control in market. Manufacturers wanted component suppliers to reduce cost and increase quality regarding manufacturing. Consequently, they succeeded by reducing costs and increasing quality of the products and BMW took over control of market in Europe and rest of the world.

9. REFERENCES

Web :

Marketingteacher.com(2010), value chain analysis, available from : http://www.marketingteacher.com/Lessons/lesson_value_chain.htm, [accessed on 06/05/10]

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