In order to identify BMW Group’s internal strengths and weakness, here applied strategic capability which combined three keys of resource: tangible resources, intangible resources, and competences. All of these resources enable a company to attain a sustainable competitive advantage (Dess et al, 2010). Tangible Resources are physical and financial assets that BMW uses to create value for the customers. In 2012, BMW’s financial report shows a sharp increase in revenues by 11,7% reaching a total of €76,848 million, instead of €68,821 million recorded in 2011 and with respect to the Group’s earnings, its Earnings Before Interest and Tax (EBIT) rose by 3.5%, from €8,018 million in 2011 to €8,300 million (Appendix III). In this way, the Group’s net profit also achieved a record figure, as it reached the level of €5,122 million, which indicates an increase of 4.4% between 2011 and 2012 (Appendix I). The BMW Group seems to have high Gearing Ratio (over 50%), which means that the funds borrowed through bonds and loans outweigh the shareholders’ equity. Although, in general terms, this makes the company more vulnerable to downturns in its business cycle and as a result it is regarded more financial risky because of the possible danger that it may be unable to meet its interest payments out of its current earnings and cash flows, however it is normal for companies competing on this premium car industry to have high levels of gearing and still be profitable and efficient. This can be proven by the Moody’s and Standard & Poor’s agencies (Appendix II). In particular, the BMW Group enjoys ‘the best ratings of all European car manufacturers’ (BMW Group, 2013). In term of production and purchase of raw materials, supply costs play an im... ... middle of paper ... ..._lull.html (Accessed at: 25 Febraury 2014) • Nieger, c. (n.d) 5 future technologies that truly have a chance.[online]. Available at: http://auto.howstuffworks.com/under-the-hood/trends-innovations/5-future-car-technologies.htm#page=3 (Accessed at: 25 Febraury 2014) • Johnson, G., Whittington, R. and Scholes, K. (2011) Exploring Corporate Strategy. Ed.9. Prentice Hall. • Johnson, G. and Scholes, K. (2005) Exploring corporate strategy: text and cases. Ed.7. Harlow: Financial Times Prentice Hall. • Waterman, R.J., Peters, T.J. and Phillips, J.R. (1980) Structure is not organization, Business Horizons, 23(3), pp.14-26. • Thurlby, B. (1998) Competitive forces are also subject to change, Management Decision, London. • Thomas, H. (2007) An analysis of the environment and competitive dynamics of management education, Journal of Management Development, 26(1), pp.9-21
2. Thompson and Strickland (2002), Strategic Management: Concepts and Cases, 13th Edition, Chicago Irwin Publications.
They are targeting a net gearing ratio of 20-30% so they would maintain their strong balance sheet (Rio Tinto, 2015). This target is enabling them to endure present industry pressures and capture any emerging opportunities that current market conditions create. In 2015, their net gearing ratio was 24%, meaning that they were in the lower half of their target range (Rio Tinto, 2015).
Dess, G. G., Lumpkin, G. T., Eisner, A. B., & McNamara, G. (2012). Strategic Management: Text & Cases (6th Ed.). New York, NY: McGraw-Hill.
Achieving world class business performance is a major challenge in today’s society. Manufacturing companies continue to face increased competition and globalization from its competitors. (1, p. 148). The automotive industry is one of the most volatile manufacturing industries that we have, which was evident in the 2008 – 2010 automotive industry crisis. (2) This global financial downturn served notice to the American automotive manufactures to raise the bar, in order to achieve word class business performance. General Motors, one of the country’s largest automotive manufactures, had to receive a government bailout to survive. During this time many with the corporation asked themselves, if we were a world class business, would we be facing this pending crisis. The answer was a resounding “NO”. General Motors has come out of bankruptcy and is focused on being a world-class business organization.
Another interesting component is although the TATR has been trending down. Ford’s fixed asset turnover ratio is increasing. One could conclude that ford has been converting more of their assets into fixed assets. The horizontal analysis of Ford’s balance sheet for fixed assets for 2015 is 120.29% and 100% for 2013 (Ford, 2015a). Therefore, emphasizing the correlation between increases in fixed assets and growing FATR. Management is playing the field well, by increasing fixed asset efficiency, depreciating the fixed assets, and generating more revenue, thus creating a win-win scenario on the
Porter, M. E. (2008). The five competitive forces that shape strategy. Harvard business review, 86(1), 25-40.
At the same time, the BMW Group will invest substantially in future technologies, new vehicle concepts and pioneering drive systems. The new strategy, which has been given the name Number ONE, is aimed at profitability and increasing value over the long term. In order to achieve these objectives, two new areas of responsibility have been created within the Board of Management for the “Corporate and Brand Development” and “Purchasing and Supplier Network” divisions. BMW Group remains best-selling premium manufacturer The BMW Group registered new sales volume records in 2007 for all three brands.
Thompson, A. A., Strickland, A. J., & Gamble, J. E. (2008). Crafting & executing strategy: The quest for competitive advantage (16th ed.). New York: McGraw-Hill Irwin.
Mason Carpenter, G. S. (2013). Strategic Management: Concepts and Cases Second Edition. Harlow: South-Western Pub.
John G. S., 2008: Strategically thinking about the subject of Strategy [e-journal] 9(4) p.2 Available through:
Porter, M. E. (2008). The five competitive forces that shape strategy. Harvard business review, 25-40.
Johnson, G., Scholes, K., Johnson, G. and Whittington, R. 2011. Exploring strategy. Harlow: Financial Times Prentice Hall.
Shafritz, J. M., Ott, J. S., & Jang, Y. S. (2011). Classics of organization theory. Boston, MA:
Company Overview: Bayerische Motoren Werke AG (BMW) is a German holding company and automobile manufacturer that focuses on the automobile and motorcycle markets worldwide. Franz Josef Popp founded the company in March 1916. BMW is headquartered in Munich, Bavaria, Germany. It also owns and produces Mini cars, and is the parent company of Rolls-Royce Motor Cars. BMW produces motorcycles under BMW Motorrad. It divides its activities into the three main segments: Automobiles, Motorcycles and Financial Services. Its BMW automobile range encompasses the 1 Series, including three-door, five-door, coupe and convertible models; the 3 Series, including sedan, touring, coupe and convertible models; the brand new 4 series, featuring an only coupe design; the 5 Series, available in sedan and touring models; the 6 Series, available as a coupe or convertible; the 7 Series large sedan; the Z4 roadster and coupe; the sports utility vehicles, X3, X5 and X6 and M models, such as M3, M5 and M6. It has producing, assembly, service and sales subsidiaries throughout the world. For the sake of this project, I will be focusing on BMW’s automobile range mentioned above but specifically the 3 series line. The BMW 3 series proves to be the most profitable line due to its relatively low cost and affordability whilst featuring the thrill and power of a German engineered vehicle.
Market Segmentation, Positioning and targeting for BMW 1.1 Introduction This report aims to examine the market segmentation, positioning and targeting of BMW (automobile company). BMW will be examined giving information about the company and where it is now and any recommendations that we feel are appropriate. 1.2 BMW Company Profile BMW was formed in 1917, from the merger of two small aero engine makers. Their famous blue and white symbol stems from the colours of the Bavarian Luftwaffe and is said to resemble the view of the one of their plane through a propeller. BMW is renowned for its sporty, sophisticated & luxury image which has been built up since the 1970's with many motor sport victories ranging from Touring Car to Formula 1.