BMW Case Study

The auto-manufacturing industry must repair its image after the Volkswagen (VW) diesel emissions scandal in 2015. Although BMW was not charged, it was implicated in the scandal (Natasha Terry-Armstrong, 2016) and fingered as one of the German auto-manufacturers that are cheating during compliance testing. BMW should learn from the financial and reputational damage that VW has experienced since the world discovered that VW deliberately deceived the world in the pursuit of profits and global growth. VW’s use of engine software, “defeat device” to cheat diesel emission tests to ensure that its vehicles were available for sale in the US and Australia demonstrated that it was willing to pursue profits at any cost. As one of the largest auto-manufacturers,

Previously consumers were willing to pay a premium for “Made in Germany” as it was associated with reliability, trustworthiness and engineering prowess, however this no more the case (The Economist, 2015). They also face competition from new entrants Tesla’s electric car, based on the new electronic drive-shaft technology that is environment-friendly and aligned with the global movement towards clean air (reference?). These companies do not have the challenges of a legacy business like BMW and they can disturb the market quickly. Fortunately, BMW’s all-electric i3 and i8 cars were developed to meet this ever changing mobility preferences (BMW, 2015). However, BMW must look for greater innovation within its business model through collaboration with its suppliers, potentially its competitors and with corporations within other industries (Nidumolu, Prahalad, & Rangaswami, 2009). Although BMW operates with favourable government policies, it must anticipate tougher enforcement of environment regulations as governments respond to consumer outcry about cheating, environmental impacts of mobility and the offer of alternative mobility technologies like the electronic

They are also engaging in public-private partnerships with the City of Munich to finance and operate charging infrastructure. However, many of these partnerships are within Germany and it should start looking outwards to companies in other industries for synergies, like Google’s ambition of self-driving cars or mutually beneficial relationships with the major oil companies that will suffer the most as mobility shifts away from oil-based to electric drive