BMW

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BMW Group
The BMW GmbH was founded in 1917 and its first line of business was the production of engines for airplanes. One year later the company became a public corporation. First in the year 1923, when the Versailles peace still prohibited Germany to produce airplane engines, the company launched the production of their first motorcycle. Already in 1926, the company’s common stock was listed on the stock exchange. In 1928, the company grew into a new market through the acquisition of “Eisenach car production” facilities. They started the development of their first small sized car. During the 2nd World War, BMW was heavily involved in the production of engines for airplanes and other war activities. After the 2nd World War the company BMW, how we know it today, started to evolve. The first step was made by the German industrial Herbert Quandt, who bought the stock majority of 60%. The capital injection made BMW able to develop their first middle class car and thereby enter the broad market. In the following years things developed quickly and automobiles were becoming the major part of BMW’s operations. For the first time BMW entered the luxurious automobile segment in 1951, where they launched the BMW 501. In 1989, the BMW Group issued preferred stock for the first time (www.bmweducation.co.uk, 2010). In 1994, BMW realized that they could only succeed as a car producer if they could drag on the same economy of scale as their competitors. The acquisition of the Rover Group was therefore a natural step in the business development. Contrary to BMW’s expectations, the acquisition of the Rover Group proved to be a big failure. The models were out fashioned and the expected sales figures were therefore never reached. During the years after 1994 the British Pound increased by 25%, which made it really costly to serve the loans, which were obtained in British Pounds. In 2000, BMW pulled the emergency brake and partly sold the Rover Group. Land Rover was sold to Ford and Rover was sold to a British investment group for the symbolic amount of 10 Pound Sterling (Guardian, 2009). The only business unit which was kept was Mini. The BMW Group extended their brand portfolio in 2003 through the acquisition of Rolls-Royce. Today BMW is a house of brands consisting of BMW, Mini and Rolls-Royce. Contrary to the beginning, the operations of the BMW Group are now no longer local, but globalised and the strategy is no longer focused at production, but on branding.

Mission statement–
“To become most successful premium manufacturer in the car industry”

Sustainability “We take on responsibility”
“Sustainability throughout the value chain is inseparable from our success and part of our corporate self-image. That is why we take responsibility. Because of our convictions, but also our self-interest, now and in the future.”
Dr. Norbert Reithofer, Chairman of the Board of Management, BMW AG
The BMW Group’s sustainability strategy. Sustainability is a basic principle-the strategy applies to the entire company.

What does it mean?
Origin of this term: The term sustainability originally comes from forestry and describes the principle by which the number of trees felled may not exceed the number that can grow back. (Hans Carl von Carlowitz, 1713)

Principle of living off the interest and not the capital.
Definition of sustainable development: Meeting the needs of the present without compromising the ability of future generations to meet their own needs. (UN Kommission, Brundtland-Report 1987)

BMW Group is the leader of its sector.
The achievements of the BMW Group in terms of sustainability have been Recognized externally: the company has achieved a leading position in the area of sustainability in many instances.
Today, the BMW Group is one of the ten largest car manufacturers in the world and possesses, with its BMW, MINI and Rolls-Royce brands, three of the strongest premium brands in the car industry. The BMW Group also has a strong market position in the motorcycle sector and operates successfully in the area of financial services. The Number ONE strategy, adopted in 2007, has set the BMW Group on course for a successful future.

The business has been given a new strategic direction with the emphasis on profitability and long-term value growth. The BMW Group’s activities will remain firmly focused on the premium segments of the international automobile markets. The mission statement up to the year 2020 is clearly defined: The BMW Group is the world’s leading provider of premium products and premium services for individual mobility." Turning vision into reality
During World War I, BMW aircraft engines founded a tradition of excellence and reliability. It was Baron von Richthofen, the "Red Baron", who praised the BMW engines that powered the legendary Fokker Triplane of 1917. In 1919 an aircraft fitted with a BMW engine gained the world altitude record. Later, BMW engines powered Dornier flying boats, which flew all over the world. It was in 1923 that BMW built its first motorcycle, and in 1928 its first motorcar, a version of the Austin Seven built under license. In the early thirties, BMW developed a light 6cylinder engine, which powered the classic 328 sports cars. During World War II, BMW made engines for the German air force and most famously for the high performance Focke Wulf FW190. It also made one of the first operational jet turbine engines. In post-war Europe, BMW made saloons and sports cars as well as the Isetta "Bubble" car, reflecting post-war frugality and petrol shortage due to the Suez Crisis. The 1960s saw the introduction of the 'Neue Klass' 1500 and the 02 Series, the forebear of the 3 Series, and created the market for small performance saloons. The 1970s brought further growth with the 3, 5, 6, and 7 Series. In January 1987, BMW introduced a new class of car, the BMW 7 Series. With an aerodynamic luxury body, the independent press as a car, which set new standards for its class, hailed the 7 Series. This car was followed by the executive class 5 Series, which again was highly praised as the best car in its class. The 5 Series range was joined by the BMW Motor sport M5 and touring body style, engineered with the world's first five-speed automatic gearbox.

BMW's commitment to innovative engineering has led to a profusion of specialist models and concept vehicles. In 1990 an entirely new BMW coupe, the 850i, was introduced, featuring BMW's 12-cylinder engine, pop-up headlights, a new six-speed gearbox, a self-steering rear suspension system, multiplex electronics and a low 0.29 drag factor. The range was completed in 1991 by the introduction of the new 3 Series, which has been the most successful BMW model series of all time. 1994 saw the launch of the new generation 7 Series setting international standards for ride comfort, safety and equipment. New technology creates new opportunities and the BMW Navigation System was introduced on BMW's complete range of 7 and 5 Series models. The navigation system functions by using GPS (global positioning satellite) technology. The fourth generation 5 Series was introduced in 1996 - an all-new car comprising 12,571 new components, many of which bring innovation and novelty to the executive car sector. The Z3 roadster was also launched in this year. With its classic styling, long hood, short rear and low seating position, demand was so strong that BMW moved production of the 318i from Spartanburg to Germany to leave greater production capacity. In 1998, February saw two world premieres in Geneva: BMW preserved the new 3 Series saloon and the M5 for the first time. The 530d and 730d with the new 3 litre, six cylinder diesel engine were also introduced. Then in 1999, touring and coupe models were added as further variants to the already successful BMW 3 Series. A new market segment was opened at the end of the 20th Century for the BMW brand with the introduction of the BMW X5 Sports Activity vehicles. The world's first bike/car hybrid, the BMW C1 was launched in May 2000. It combines the safety credentials of a small car with the maneuverability of a twowheeler and is the smart solution to urban travel in the 21st Century . In January 1994, BMW surprised the world by buying Rover Group. In so doing, BMW created a company with nearly twice the capacity at over one million cars per year. In 1990, BMW and Rolls Royce joined forces in founding a company for the manufacture of aircraft engines based in Oberursel near Frankfurt, Germany. The company immediately started work on the development of a range of engines for a new generation of large business and short haul aircraft. In 1993, During the 60s and 70s, BMW cars dominated touring car races in Europe and the USA, and motor sport was seen as a key factor in proving and promoting BMW's technical superiority. Later BMW moved into Formula 2 racing, with BMW-engine cars winning six European F2 Championships. In 1982 BMW reached motor sport's pinnacle by entering Grand Prix Formula 1 Racing with a 1.5 liter turbo-charged engine based on a road-going 4-cylinder engine. In 1983 Nelson Piquet, driving a Brabham-BMW won the World Championship to become the first 'turbo' World Champion Throughout the company's history in motor sport, every engine has been based on a production unit. Since 1966 BMW have won sixteen European Championships, the World Series in 1987 and countless National titles including the 1988, 1989, 1990, 1991, 1992, and 1993 British Touring Car Championship and the McLaren F1 won Le Mans in 1995 and the BMW V12 LMR won the 1999 Le Mans at the beginning of 2000, BMW returned to Formula 1, more than twelve years after the company's last Grand Prix and 17 years after winning the World Championship.

The History of BMW Motorcycles Although cars are, and will remain, the major part of BMW's business, the company never forgets that its first road vehicle was a motorcycle. The basic principle of this, the forefather of all the BMW two-wheelers - a horizontally opposed engine with shaft drive and twin-tube frame - remained in force until the 1990s. The first major engine design change in sixty years came in September 1983 with the introduction of the K100. In autumn 1989, BMW introduced the K1, a two-wheeled companion to the Z1 car. During 1993, a new Boxer was introduced, taking 75 years of design philosophy forward into the next century. Then in 1994, a new single-cylinder motorcycle, the F650, was introduced, giving BMW an even wider range of bikes. In 1997, BMW presented the K1200 RS Motorcycle, the third and most comprehensively revised version in its 13-year life span. 1998 saw the introduction of the R1100S sporting tourer motorcycle; the new BMW K1200 LT luxury tourer.

BMW's aims and objectives BMW's most important aim of their business to make profit and also try to expand their business as much as they can to stay on the top of the car industry. BMW have aims and objectives to get to the top and they are:        To provide the best relaxing place for their worker to help them be motivated and to work better with no distraction. To provide the best quality products for example their automobiles to their customers and other companies. To provide the best service to customers and hope to do business again. To work with educationalist (The BMW Education Program) to support and help raise the quality of learning in the United Kingdom. Quality, performance and excellence are standards, which BMW applies not just to its automobiles, but also to its support for education. To provide services and resources for schools that are interesting and relevant and which inspire young people to aim for excellence in all aspects of their studies. To provide special training for their workers, encourage its people to develop their professional and personal skills to enable them to meet its organizational goals. Integrate part of their business in a 'learning organization, which supports achievement of development and career potential for employees. Performance appraisal is an accepted part of every Manager's responsibility. A formal review of performance is held at least annually and personal objectives are agreed for each employee for coming 12 months period. The Human Resources Department provides appraisal format guidelines and retains appraisal and objectives summaries for all employees. To improve fuel economy of its cars through research and development. It will respond to political development for programmes of environment improvement. To recycle their products that has failed.

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Major objectives of BMW Profits Profit is left when all costs incurred in making and selling a product is deducted from the revenue gained from that sale. It acts as the reward to the entrepreneur, usually the owner of the business, who has provided the capital. It is usually the net profit after tax, which represents the surplus for the owner of the business and is paid as a dividend to shareholders. Profit maximization is seen as one of the major objectives of the business, although it is more likely to be an objective for the investors in a business, than for its managers or employees. It might be for those groups that profits acts as a constraints, while higher sales or higher wages and salaries are more important objectives. Functions in business It does not matter if the business is a sole trader or a Public Limited Company, the functions (the business activity area) remains the same, for example: buying and selling, dealing with suppliers, dealing with customers, paying bills making sure there soap in the cloakroom. Someone has got to do these tasks. It is up to the business to organize them in an efficient way. A Functional Department structure Human Resources In business term this is used to describe the techniques and expertise organization, planning, direction and control of the operations of a business. In the theory of industrial management, organization has two principle aspects. One relates to the establishment of so-called lines of responsibility, drawn usually in the form of an organization chart that designates the executive of the business, from the presidents to the fore person or department head, and specifies the functions for which they are responsible. The other principle aspects relate to the development of a staff of qualified executive.

Planning in industrial management has three principle aspects. One is the establishment of broad basic policies with respect to production sales, the purchases of equipment, material, and suppliers, and accounting. The second aspect relates to the implementation of these policies by departments. The third relates to the establishment of standards of work in all departments. Direction is concerned primarily with supervision and guidance by the executive in authority, in this connection a distinction is generally made between top management, which is concerned, with the direct execution of policy. Control involves the uses of records and reports to compare performance with the established standards for work. BMW's Human Resources Department All of the company's staff relates problems including staffing levels to the Human Resource manager. The department is responsible for the welfare of their staff, they have to see how many holidays have their employees had and who needs to take a holiday, they have a booking calendar for this. The department is also responsible for employees being sick, they to be trained and must know first aid. Every thing to do with the company's staff is dealt here. It is important for the company to have the right measurements of relation with the staff so that the company is secured and balanced. Human resources are the most important resource in any company. There is a connection between the qualities of the workforce. An organization needs to have staffs that are willing to meeting its aims and objectives. The human resources management employs and, develops and keeps the best staff. Small business may have one person whose job it is to look after issue relating to staff. Large business with many employees, on other hand, will have a whole section devoted to personal. BMW's Human Resources encourage its employees to develop their professional and personal skills to enable them to meet its organization goals. An integral part of their business strategy is a 'learning organization' approach, which supports achievement of development and career potential for employees. Performance appraisal is an accepted part of every manager's responsibility. A formal review of performance is held at least annually and personal objectives are agreed for each employee for the coming 12 months period. The Human Resources departments provide appraisal format guidelines and retain appraisal and objectives summaries for all employees. Finance Finance this is a branch of economics concerned with providing funds to individuals, businesses and governments. Finance allows these entities to use credit instead of cash to purchases goods and invest in projects. For example an individual can borrow money from a bank to buy a home. An industrial firm can raise money through investors to build a new factory. Governments can issue bonds to raise money for projects. Finance plays an important role in the economy. As banks, credit unions, they help expand the economy by directing fund from saver to borrowers. For example, a bank acquires large amount of money from the deposits of individual savers. The bank does not let this money sit idle but instead provides loans to business or to expand a business. In a business finance is a business is closely involved with the production of goods and services, they also link up with out other functional areas in the business including the seniors. BMW's Finance Department BMW's finance department sorts out the money for it companies. They bring in comfort for the company's staff and they monitor and pay for their purchases, their aim is to pay on time for each item they purchase. The finance departments also provide sales and services; they monitor the finance and all the money that comes into the business (income). They sort out the wages for their staff and make sure that their employees get the right amount of money that they deserve and work for. They understand and control the company's finance to it to become a profitable business. The invoices that the company gets are paid up in time and money that comes in the company is recorded so that we can establish the trends of the business.

They also chase up invoices that have not yet been paid and are overdue. And every once a month they sort outs the purchase orders and is passed to the manager. 1. Pays salaries and wages to the staff 2. Pays amounts to suppliers 3. Controls the debts owed to the company. 4. Advise senior managers on their major financial decisions The finance functions main aims are to 1. Prepare accounts 2. Pay wages 3. Obtain capital and resources Capital is money, to start up a business or helping it expands. Capital may come from the owner's savings or borrowed. When business is working Capital usually comes from profits or loans. Administration Administration is based in its offices. Larger business may administrative offices each with a specialist responsibility and function. The larger the business the more specialized office workers become, and harder the administrative system. Any business can be regard as an open system that the links with the outside environment takes inputs and process them in to outputs. BMW's Administration Department In the administration department they try to capture the work done on the computer and they maintain each customer’s services history. They make a record of all the invoices they received and also fax the customers if they need to ask them about their item that has come to be repaired; this is also done by posting and also by telephones. They make sure that the company is in tip, top condition and that the company is making a good impression to the customers and companies that purchases item from BMW. Administration is based in its offices. Large business may administrative offices each with a specialist responsibility and function. The larger the business the more specialized office workers become, and harder the administrative system. Any business can be regard as an open system that the links with the outside environment takes inputs and process them in to outputs. BMW's Marketing & Sales Department BMW Sales New and used BMW vehicles are sold through a network of 154 authorized dealers throughout the UK. MINIs have their own separate showroom on the same site as BMW. Dealers are authorized by BMW Great Britain to sell either the complete range of BMW cars and parts, or the BMW range of motorcycles, and to provide an after-sales service to BMW customers. In order to maintain brand image and ensure customer expectation is met, the dealers comply with various requirements and corporate identity guidelines. BMW considers corporate identity and brand image to be paramount in maximizing awareness of the differences between itself and its competitors. Examples include: Interior and exterior design, Levels of customer service, Signage, typefaces and advertising. The Dealer Network is fully supported by BMW Great Britain; training courses are provided for both business and technical staff, up-to-date information regarding new models and competitor's models is available, and a wide range of marketing assistance is provided. BMW Marketing BMW is one of the most successful vehicle manufacturers in the world, although by no means the largest. Most BMW manufacturing plants are located in Germany, but BMW AG has extended their plants to South Africa, the USA and other countries. Around 4,400 dealers in over 100 countries sell the vehicles produced by these plants. In

many of these countries the vehicles are distributed by independent importers and in Malaysia, Thailand, Indonesia the Philippines, Egypt, Vietnam and Mexico, vehicles are assembled in CKD form (completely knocked down) to avoid import restrictions. In the key markets, BMW has set up its own subsidiaries to support the dealer network. There are 21 subsidiaries and they account for 90% of all new BMW cars sold outside Germany. BMW Great Britain Ltd is the second largest selling subsidiary behind the USA. New and used BMW vehicles are sold through a network of 156 authorized dealers throughout the UK. Dealers are also authorized to sell parts, and provide a complete after sales service. A separate network of dealers sells BMW motorcycles and offer after-sales support. Advertising and promotion in the UK, Much of current company success has stemmed from the development of the consistent marketing policy (the 'market niche' strategy). The BMW brand has been built on the four core values of technology, quality, performance and exclusivity. It is with these four brand values that a consistent advertising strategy has been adopted, using the same advertising agency WCRS, since 1979. Consistently, one or more of these values are therefore expressed in all BMW advertisements, though their expression in adverts evolved in response to economic, environmental and competitive changes. This year a new central core value has been added to the existing four values of technology, quality, performance and exclusivity - that of driving. This is based on the premise that unlike other manufacturers, BMW always puts driving first. A BMW is better to drive because it is built differently from 92% of cars on the road. The fundamental philosophy behind this difference is that all BMWs are rear-wheel drive which is the best set-up for driving. This is because the car is pushed into a corner rather than pulled and while the back wheels provide the power, the front wheels are left free to steer the car. Handling is also improved by the cars near perfect front-rear weight distribution. This means the car is more agile and gives the driver a greater feeling of control when cornering. This design philosophy, which runs through every BMW, has been communicated through a number of TV and press executions during 1999. The brand image has been built up by using 300 color press executions and more recently through a total of 64 different television commercials. Throughout the campaign, BMW has remained consistent to its belief in focusing on the substance of the cars themselves. BMW advertising has always focused entirely on the cars themselves since people often suggest a degree of "fallibility". The BMW brand values are emphasized throughout their adverts. For example if a BMW was shown on a road, it would be a well-maintained road, the lines freshly painted, the surface smooth and the verges appear to be manicured. To support BMW's increasing involvement in Formula One, BMW has advertised in the first race breaks of all Grand Prix during 1999. BMW's link with Formula One will strengthen during 2000 when BMW will not only provide the engines for the BMW Williams F1 team; they will also take over as key sponsor. In addition to the higher profile national color press and television advertising, dealers also run their own local campaigns. Local press, radio and bus advertisements are all available from BMW dealer marketing, along with brochures, price lists and dealership point-of-sale materials. BMW encourages its dealers to make use of this service. By providing the dealers with a central source for advertising, BMW ensures that all communications are in keeping with BMW brand values. BMW has gone to great lengths to protect the integrity of the brand, with good results. BMW Great Britain Ltd has seen its sales quadruple from 13,000 units in 1979 to 67,676 car registrations in 2000. It may be thought that this increasing ubiquity would have dented some of the brand's allure over the years. However, through strict adherence to brand values in all aspects of its communication over this period, it has successfully maintained its stature as one of the most highly regarded and prestigious brands in the country. MINI International advertising campaign BMW has embarked on a global advertising campaign that both launches the new MINI and re-launches the MINI brand. What makes it special is that it is consistent international campaign across the European market, the USA, Asia, South Africa and the Middle East. In over 15 countries there will be: TV spots, Print advertisements, Mega-posters, Radio spots, Events The brand identity of MINI has a central design element, known as the frame that runs through all aspects of marketing the MINI, including print, advertising and the web. BMW's Production Department BMW has introduced new technologies and strategies to use raw materials, energy, air and water more economically and efficiently. New ways of working can reduce congestion and protect the environment. Water is reused, in some plants up to six times. It requires only two cubic meters of water to produce a BMW car. As far as possible, BMW

transports the finished product by rail. Efforts are made to ensure that deliveries are co-ordinate in order to minimize the use of empty rail freight cars. Commercial vehicles are utilized to full capacity through improved information and communications systems; this reduces the number of trips required. During paint spraying, particles of paint that fail to adhere to the car may escape into the atmosphere and are filtered out using complex systems. Over the last ten years, the efficiency with which paint is sprayed has increased from 30% to 70%. Office waste is recycled. Flexible work time models allow employees to travel to and from work avoiding peak traffic periods and congestion. BMW buys around 30 million worth of components from UK manufacturers each year - a significant inward investment in the UK. BMW's Management Style BMW is run by a democratic management style; the managing director of BMW involves empowerment. BMW's individuals and teams are given responsibility to make decisions, usually within a given framework. The BMW team is then held accountable for the decisions that it chooses to make. The managing director is comfortable allowing others to make decisions and as a good overall understanding of the decisions that are being made, and gets regular feedback on the result from the team or the individual. However the managing director is confident that empowered individuals and teams uses it responsibilities given to them wisely. BMW's Organisation Culture BMW is a role culture and a task culture: Role culture in BMW - BMW is a hierarchical structure and has employees that play a major role and act according to the rules and regulations in the business. BMW has divided it business into various functions (e.g. accounts, marketing, production, etc). These are then put in hierarchical order of offices (e.g. Production Director, Production Managers, Supervisors, Technicians, Operatives, etc). BMW's strength lies in its functions. In the function employees are at different levels determining their job descriptions and defined communication procedures. In BMW's culture the job description is just as important as the person who fills it, and performance over and above the role is not required. In BMW 'position' is the main sources of power, and 'rules and procedures' are the main sources of influence. Task culture in BMW - BMW have different group that work on a project to come up with a good reliable product, this involves them becoming a Matrix structure in a small group or team. BMW's Production Process BMW has introduced new technologies and strategies to use raw materials, energy, air and water more economically and efficiently. New ways of working can reduce congestion and protect the environment. Water is reused, in some plants up to six times. It requires only two cubic meters of water to produce a BMW car. As far as possible, BMW transports the finished product by rail. Efforts are made to ensure that deliveries are co-ordinate in order to minimize the use of empty rail freight cars. Commercial vehicles are utilized to full capacity through improved information and communications systems; this reduces the number of trips required. During paint spraying, particles of paint that fail to adhere to the car may escape into the atmosphere and are filtered out using complex systems. Over the last ten years, the efficiency with which paint is sprayed has increased from 30% to 70%. Office waste is recycled. Flexible work time models allow employees to travel to and from work avoiding peak traffic periods and congestion. BMW's Quality Assurance At BMW, they have an ongoing in-house quality assurance program to insure the highest level of quality on each and every service. Their team of certified BMW technicians and master technicians review service procedures on a weekly basis. The team also identifies items that should be added to specific service procedures. Fortunately, our state-of-the-art service and diagnostic tools cut the time required to do many routine tasks. Using the time saved, they can and have added numerous extra steps to every service based on the teams first hand experience. At the end of each service procedure (e.g., oil change or inspection), a second certified BMW technician performs a "Quality Assurance" (QA) check. The QA technician checks the service item torques (e.g., oil drain plug), with a second set of calibrated wrenches. In addition, the QA technician also checks critical torques that may not have even been a part of the service procedure (e.g., brake caliper mounting bolts). As a final step, the QA technician reviews the repair order with the servicing certified BMW technician.

Most customers would gladly pay additional for extra service steps and a quality assurance check. At BMW, they provide these services at no additional cost to our customers. BMW has no recommendation for quality assurance at the dealer level. BMW believe that quality is of key importance in every stage of the manufacturing process, from product conceptions to consumer feedback. Consumer feedback influences the development of improvement and future products. Quality control is achieved through a system of quality audits at every stage of the manufacturing process. This is also applies to suppliers of materials and components, who have to work to agree specification of quality. Rather than having a quality control department to spot defects, at BMW all employers are involved in achieving quality standards. This system of involving all levels of staff in taking responsibility for quality has implication for management structures, which have to be able to react quickly if a fault is found. Quality is clearly linked to reliability and safety, where design innovation is developed and manufactured to consistent standards. This adherence enables the company to meet customer’s expectations and maintains its position in the market place.

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