case study of bmw

BMW: Case Study Essay

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Searching for BMW case study essay to get inspired? Look no further! This BMW marketing strategy case study analyses the company’s strategic management and the approach to customer segmentation.

Introduction

• Case Summary
• Defining the Issue

Consumer Segmentation

• Marketing Strategy
• Recommendations

BMW is one of the most recognized brands in the world. It is at the echelon of the automobile industry, producing products that are known for a combination of quality, utility, and style. Customer segmentation is a management factor that all companies should consider in their marketing strategy. This case study analysis attempts to examine the BMW brand and its approach to market segmentation to expand its automobile sales.

BMW Case Study Summary

BMW developed into an international automobile company after World War II and achieved tremendous success by the mid-20th century. In 2012, it had international sales exceeding $106 billion (Kotler & Keller, 2016). The BMW is an instantly recognizable symbol, a tribute to the company’s early days as an aircraft manufacturer. Originally, BMW attempted to appeal to baby boomers, producing sports sedans that were luxurious and demonstrated high performance.

This became the 3, 5, and 7 series which were a similar design in different sizes. At the beginning of the 21st century, as consumer needs shifted, BMW began to introduce a wide variety of other vehicles, ranging from premium SUVs to convertibles and roadsters, as well as cheaper compact cars in Series 1. BMW offered options to family-oriented consumers, wealthy conservatives that sought luxury, and those needing bigger cars for outdoor activities, as well as those seeking highly flamboyant vehicles.

BMW Case Study: Defining the Issue

BMW utilizes various advertising tactics and methods but has continued to employ the tagline “The Ultimate Driving Machine” since 1974. It has seen a steady increase in sales in the US and focuses on emphasizing quality rather than status. BMW consumers usually demonstrate loyalty, but the company seeks to attract new customers. The marketing issue for investigation is whether BMW adequately segments the consumer base and how well it employs marketing to each group. BMW’s marketing strategy will be examined, and recommendations provided for potential improvement.

BMW generally uses a mono-segment marketing position that appeals to a single customer segment of relatively wealthy individuals. Most of the automobile lineup which BMW offers consist of luxury vehicles, and even its Series 1 is priced at the higher end of the mid-range sedans. The company simply does not offer budget vehicles that may be appealing to individuals and households with income below the upper-middle class. Despite this, BMW most likely uses a post-hoc segmentation approach which analyzes marketing data after sales to determine its customer clusters and category management. Segmentation is based on consumer preferences, which consists of product evaluation.

In an automobile, this includes aspects such as price, performance, ecological features, and reliability. These help to shape criteria that are used during automobile selection. The preferences are vital in constructing the additive value function which is a major method of determining utility for various customer segments (Liu, Liao, Huang, & Liao, 2018).

As mentioned in the case study, BMW offers a variety of cars that may fulfill the distinct needs of its consumers. Each of the car types it offers such as sedans, SUVs, or roadsters all have several vehicles in the series which gradually increase in price and feature offering. BMW actually segments the premium market by finding a balance between purchasing behavior and marketing mix and responding appropriately to value and consumer trends. However, the brand does not compromise and cater to most segments but adopts a marketing strategy that focuses primarily on a premium target market (Yuying & Qingrun, 2018).

The primary consumers of BMW vehicles are men aged 30-50 with higher levels of income. This segmentation works for BMW as it attempts to maintain its status as a luxury car manufacturer. With BMW combining luxurious superiority with performance and reliability, the company positions itself to appeal to upper-class customers that will appreciate the masterpiece and symbolic nature of its highly technological automobiles. Therefore, BMW establishes a particular value to its product which is reflected in both pricing and marketing strategy.

BMW Marketing Strategy

BMW focuses its marketing efforts primarily on premium segments with the purpose to define luxurious brand identification of its vehicles. The focus on affluent customers in the majority of its marketing for the 3 through 7 series has demonstrated the success of this approach. BMW positions itself as a leader in the industry through innovation. This may range from clean energy engines to complex electronic systems in its cars. The company builds its value and competitive advantage on the innovation concept which is reflected in its global marketing strategy (Dong & Koo, 2018). In other words, the development effort, components, and performance that is input into BMW cars are reflective of its value, justifying such price tags.

The luxury product market continues to demonstrate significant growth year over year, despite any economic downturns in the last decade. Premium vehicles such as BMW base their segmentation and marketing on the concept of scarcity.

Consumers purchasing luxury products are buying into the dream and exceptional quality. BMW takes advantage of this by adopting a “masstige” approach, combining the prestige of its automobiles with mass marketing strategies to achieve a high level of sales. Premium products directly impact the psychological concepts of self-esteem and social recognition. The consumption and possession of premium brands are associated with pleasure and a range of other emotions which consumers pursue as part of increasing or upkeeping their social status (Chandon, Laurent, & Valette-Florence, 2016).

Based on this, BMW began to test a new slogan of “sheer driving pleasure” in limited markets to attempt the transition of marketing focus from performance alone to the emotional appeal of its luxury brand. While the iconic “ultimate driving machine” may be successful, it may be viable for BMW to eventually change its slogan. The current slogan appeals to its primary demographic of wealthy men but fails to capture other market segments such as women, young adults, and those without such great enthusiasm for cars. The emotional marketing approach is closely relatable with individualism, a coveted value for United States consumers.

Emotional paradigms contribute to the cultural entourage and social constructs of a vehicle (Lutz, 2015). By integrating its quality and performance into emotional marketing, BMW can capitalize on its widely known brand and enhance consumer communication. BMW can improve its marketing strategy and adopt new consumer segments by combining emotionally sensual marketing with premium performance. The two concepts are inherently synergistic and would allow for BMW to maintain a leading position in the industry.

BMW Case Study Solution & Recommendations

In addition to using the emotional marketing appeal, BMW should seek to expand its consumer segments. This is particularly important in light of potential economic downturns and expansion into developing countries where average incomes are significantly lower than BMW’s primary markets of North America and Europe. One recommendation would be to expand its lineup to include more budget-oriented cars that maintain a similar level of quality, safety, and performance. This would be in line with BMW transitioning its focus from class to performance as mentioned in the case study.

It would attract a significant market segment from middle-class households who would now be able to afford a BMW automobile which does not sacrifice much in terms of performance, only luxury. However, this decision should be taken into consideration of the long-term commitment of the company since it would dilute the premium status of the BMW brand. Even now, driving one of the cheaper series of BMW is considered far less prestigious than its luxury sedans. Expansion into new segments will present challenges with both advertising and competition.

BMW should keep track of changing consumer trends, diversity, and social opinions, basing its advertisement strategy on appealing to a wide variety of the market, even those that may not be able to afford its cars. The BMW brand image is distinguished and synonymous with prestige, quality, and performance. The company’s further strategy should encompass significant investment into technologies such as clean energy and self-driving cars, and reflect this in their marketing campaigns which position BMW as an innovator in the industry.

BMW is a global automobile brand that produces and sells premium-level vehicles. Its primary consumer segment consists of affluent individuals and the car lineup is designed to meet the demands of this market segment. BMW bases its marketing strategy on innovation and performance, taking advantage of its luxurious brand name to emphasize quality and scarcity. While this marketing strategy has been successful, it may be viable to modify the approach by using emotionally sensible marketing and introducing low-end vehicles with a similar level of quality in order to expand its consumer segments.

Chandon, J.-L., Laurent, G., & Valette-Florence, P. (2016). Pursuing the concept of luxury: Introduction to the JBR special issue on “Luxury marketing from tradition to innovation.” Journal of Business Research, 69 (1), 299-303. Web.

Dong, H. B., & Koo, J. (2018). Conspicuous and inconspicuous luxury consumption: A content analysis of BMW advertisements . Reinvention: An International Journal of Undergraduate Research, 11 (2). Web.

Kotler, P., & Keller, K. L. (2016). Marketing management (15th ed.). London, England: Pearson.

Liu, J., Liao, X., Huang, W., & Liao, X. (2018). Market segmentation: A multiple criteria approach combining preference analysis and segmentation decision. Omega, 83 , 1-13. Web.

Lutz, C. (2015). Marketing car love in an age of fear: An anthropological approach to the emotional life of a world of automobiles. Etnografica, 19 (3), 593-603. Web.

Yuying, A. & Qingrun, R. (2018). Global marketing strategy of BMW . Web.

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How BMW’s strategic pivot made it a global automotive giant

Table of contents, here’s what you’ll learn from bmw's strategy study:.

• How changing industries is not a straightforward endeavor, but staying true to your identity’s core traits will help you achieve it.
• How clarity of vision guides the transformation process and helps you fit in an evolving industry.

The BMW Group – Bayerische Motoren Werke – is a German manufacturer of automobiles that markets its products through the brands BMW, Mini, and Rolls-Royce. It’s among the top 10 biggest car manufacturers in the world by revenue.

The Quandt family owns 50% of the company, specifically Stefan Quandt and Susanne Klatten, while the remaining 50% is publicly traded. Chairman of the Board of Management is Oliver Zipse since 2019.

BMW's market share and key statistics:

• Brand value of $27.6 billion
• Net worth of $52.9 billion as of December 22, 2022
• Annual revenue of $131.6 billion for 2021
• Total number of employees: 118,909
• 2,521,514 deliveries in the automotive segment in 2021

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Humble beginnings: How did BMW start?

BMW was officially founded on March 7, 1916.

It was the result of a merger between Gustav Otto’s company,  Otto Flugmaschinenfabrik  and  Bayerische Flugzeugwerke.  However, the company was combined with Karl Friedrich Rapp’s company  Rapp Motorenwerke  in 1922 and was named  Bayerische Motoren-Werke AG (BMW AG).

Today, BMW is known for its iconic cars and powerful engines. But its first business was aviation.

Aviation: BMW’s first business had people flying

The early twentieth century was a period of constant technological innovation in aviation.

As such, the demand was high and although there were only a handful of manufacturers, the competition was fierce. In the dawn of highly specialized spaces, the competition between companies is essentially a competition between individual inventors and their teams.

BMW had Franz Joseph Popp and Max Friz on its side, two excellent and experienced inventors. However, what set BMW apart from its competitors was the solid financial footing that enabled it to focus on supreme performance and reliability in the design of its aero engines. Instead of focusing on cost reductions and short-term convenience, the company focused on sophisticated engineering solutions and novel manufacturing techniques.

For example, the six-cylinder Type IIIa engine that Friz developed was performing exceptionally well in higher altitudes. In fact, it was so powerful that it gave the German Fokker D.VII fighter such an edge in World War I that it urged the air ministry to make space for its production in the BMW facilities by giving the production of another BMW engine to Opel, a competitor. In addition, once the war was over, Armistice’s fourth clause required Germany to hand over all D.VIIs to the Allies. It was that powerful.

But the Armistice also forbade the production of aero engines, forcing BMW to a complete restructuring.

It’s important to mention that building aircraft technology imbued BMW’s culture with values of extreme performance and technical sophistication that remain today.

BMW’s strategic pivot: how it moved to car manufacturing

The post-war era was tough for manufacturers in Europe since the end of military contracts meant that manufacturers were left with excess capacity, inflation was increasing, and the only available contracts were small and not very profitable.

Frank Popp, who ascended to General Director at BMW, devised a long-term strategy to develop future stability while keeping the company alive. His  strategic plan  was focused on three main pillars:

• Taking smaller manufacturing contracts to keep the cash flowing, like producing railway brakes.
• Modifying BMW’s star Type IIIa engine to a four-cylinder model, which was more appropriate for industrial and agricultural applications. That would allow the further development of the aero engine, despite production restrictions.
• Entering the motorcycle arena and using it as a stepping stone to move into the car market.

The strategy had a twofold intention.

The first was a bet  on the removal of the aero engine production restrictions. Fritz was developing the next generation of the company’s star engine, so once the restrictions were lifted, BMW could resume its position as a pioneer in aircraft technology.

The second was a pivot  with a simultaneous approach to retaining revenue streams. The modified engine proved to be profitable, and Fritz’s ingenuity gave birth to the famous “boxer” engine configuration – a motorcycle engine with innovations for more effective cooling and a higher power output – that brought BMW great success in motorcycle races. 

The brilliance of the strategy was its clarity and its executable nature. It took advantage of the company’s current strengths in engineering knowledge, technological innovations, and credibility to move to adjacent manufacturing markets. A tactic that proved to be quite profitable.

In 1923, the bet paid off. The restrictions were lifted, commercial flying was on the rise, and demand was increasing. BMW faced some competition, but its engines proved superior, consistently breaking records of distance - and height - traveled and sustained the company until its entering the car market.

BMW’s challenges during World War II as a car manufacturer

In 1928, BMW entered the car market.

It was a long-standing belief that the company had the capabilities to design and manufacture a car, and its leadership believed that BMW’s long-term survival wasn’t aero engines, but cars.

Its approach was calculated and a few years in the making. The company chose to compete in a smaller, less crowded segment of the market: the small-car segment.

BMW acquired the struggling Automobilwerk Eisenach manufacturer and used its factory to produce the first-ever BMW car under the manufacturer’s brand name: the  Dixi DA1 . It was a variation of the British Austin Motor Company‘s model, the Austin 7. BMW’s engineers improved the model and launched the next generation the following year under the company’s brand name marking the first car designed and manufactured by BMW.

However, the company was far from a car manufacturer at the time.

Its main business was motorcycles. At the start of the 1930s, BMW was known for its powerful engines in the aero industry and its innovative motorcycle designs. The successes in the latter funded the company while honing its engineering capabilities. So, BMW continued developing all three of its business segments – aero engines, cars and motorcycles – with the third one keeping it alive.

But Germany’s austerity had driven all but five German car manufacturers out of business.

In 1933, Adolf Hitler came to power, and things changed.

He revived the industry by providing financial security and certainty, reducing taxation, and building the necessary infrastructures to allow the industry to boom, i.e. highways like the  Autobahn  network. Evidently, Hitler’s intentions behind this investment were the development of engineering capabilities for military superiority and an efficient transportation system. They were in line with his long-term plans that resulted in the horrors of WWII, but nobody could predict that.

So, until WWII started, BMW took advantage of the new market conditions to improve its car engines, expand its target market and develop its first signature car:  the sedan . The car achieved moderate success, capturing 6% of the car market share, beating its number 1 competitor, the Daimler-Benz. BMW managed to make a name as a fashionable car manufacturer.

Soon after that, Hitler’s plans created two challenges for BMW.

The first challenge  was the increased demand for aero engines that took most of BMW’s manufacturing capabilities. With only one car-producing factory, the company was leaving money on the table with its decreased output. Popp’s strategic decision at the time unknowingly saved the company from a certain demise. Instead of opening a new factory, Popp decided to upmarket and aim for the high-end of the market spectrum where margins were better, and the demand couldn’t get out of hand. All three of BMW’s business units were booming until 1940.

The second challenge  was a hostile takeover of the company by Berlin’s dictator. The war was just around the corner. There was no room for commercial manufacturing, only military. Whoever tried to oppose was driven out of the company, including the company’s co-founder Frank Popp. BMW was forcefully transformed into an arms manufacturer and a forced-labor employer.

Once the war ended, the scene was not looking good for BMW. It had multiple facilities bombed, was affected by impossible restrictions imposed by the Allies, and its car factory was left on the wrong side of the Wall.

How BMW survived post-WWII

Good connections between the US Forces and senior BMW managers saved the company from total obliteration and allowed it to remain in business making domestic pots, bicycles and agricultural machinery.

However, the company never completely shredded its previous identity. Old employees returned and the design for a new motorcycle was secretly being developed.

By 1952, BMW had resumed motorcycle and car production. However, none of its products achieved sufficient sales, and by the end of the decade, the company escaped from a near Mercedes-Benz acquisition with the investment of the Quandt brothers. Through a few well-timed and well-seized opportunities, BMW got a hold of great talent and found its breakthrough in the steering wheel of the  BMW 1500 .

Since then, the company has had a steady course to the top accumulating successes in engineering innovation and trend-setting designs that helped the company expand its businesses internationally.

Key Takeaway #1: Accept incoming change and take your expertise with you

When the world changes, clinging to the old status quo is suicide. On the contrary, embracing change without shedding the identity of your company is the best way to adapt.

This is how you can do this:

• Identify what makes your company unique. Do a  SWOT analysis  and a culture inventory (values and accepted behaviors).
• Have clear answers to the following questions: Which strengths and cultural traits can you transfer? What weaknesses and cultural traits must you shed?
• Retain high levels of agility with an iterative approach to execution. Treat your approach as a learning process.

BMW’s current corporate strategy: “We see the future as electric, digital and circular.”

BMW is over 100 years old. It wouldn’t be here today, if it hadn’t demonstrated a powerful  strategic instinct  and a strong,  adaptive  corporate  strategy .

And today, it needs these two more than anything. The landscape of the car industry is going through a transitional phase. The survival of legacy carmakers, like BMW, requires massive transformation and a focused strategy tailored to today’s complex and differentiated external conditions. BMW’s leadership recognizes this fact.

Here are the three conditions that outline BMW’s complex and demanding competitive landscape:

• Increased global competition, including emerging new players in China with potentially global reach.
• Industry-shaping megatrends that take the focus away from traditional car manufacturing traits. Electromobility, connectivity and digitalization have become the new competitive arenas.
• Increased prioritization of sustainability and environmental impact from both buyers and regulatory forces. Followed closely by societal impact.

“BMW Group strategy” is a transformational bet on the future of the industry.

We see the future as electric, digital and circular.

BMW separates its operations into three segments:

• The Automotive segment
• The Motorcycles segment
• The Financial Services segment

And manufactures vehicles under three brands:

• Rolls-Royce

With a quick glance, it’s obvious the company targets the high-end of the market with its offerings ranging from premium to ultra-luxury products. Rolls-Royce is solely ultra-luxury, MINI is premium and BMW products range from premium to ultra-luxury. The company has a unified vision, but each brand will adapt to the company’s vision at a different cadence.

Let’s see how BMW’s corporate strategy tackles the company’s transformation.

Electric Mobility: the competitive landscape and BMW’s strategy

Electric Vehicles (EVs) have been a massively trending category in the last few years, driven by two powerful forces: demand and regulatory requirements. And BMW is committed to becoming one of its major players.

Its goals are to:

• Achieve >30% share of electrified cars in total deliveries by 2025
• Achieve >50% share of electrified cars in total deliveries by 2030

These are ambitious goals and reveal a significant shift in its business focus that requires a massive internal transformation. Success isn’t guaranteed because the space is already crowded and the competition fierce:

• TESLA , the category queen of EVs, defends its top place remarkably well by maintaining its edge in battery engineering and chip design with its in-house expertise.
• Honda partnered with Sony to enter the EV category and Xiaomi announced its plans to build an electric car plant.
• General Motors and Nissan have set their own ambitious goals and brought strong propositions to the market. Ford saw unexpected demand for its F150 all-electric lightning pickup truck, and Toyota promised to offer 30 EV models by 2030.
• Mercedes-Benz made an aggressive move to luxury EVs with its Mercedes-EQ range.
• Alternative, eco-friendly and healthy alternatives are drawing more and more demand.
• China’s investment in infrastructure lowers the barrier of entry for new players and Chinese brands increase their competitiveness.

Not all of these players are direct threats to BMW, but the combined presence shapes the market and the competitive landscape in ways that cannot be ignored. If BMW is to survive and achieve its ambitious goals, it needs to address all of these points with a cohesive and focused strategy.

And so it does.

The company’s strategy in the Electric Vehicles category is aggressive, structured, and developed early. BMW’s approach to its electromobility transformation has three distinct phases:

In the initial phase,  the BMW Group launched the fully electric BMW i3 in 2013, introducing electrification into standard production. The next year came out the BMW i8 with innovative technology and a futuristic design.

In the second and current phase,  the MINI Cooper SE* and BMW iX3* lead the EV offensive. The company aims to have at least one fully electric model in virtually all key model series by 2023. The transformation is supported by developing its in-house competencies and restructuring all of its factories, especially in Germany, to develop the capability of manufacturing EVs. It also incorporates plans for developing a charging ecosystem.

In the third phase,  BMW will launch its fully electric product line-up, the  Neue Klasse . This new line of EVs will be characterized by a complete technology redesign, including redefined tech stack for autonomous driving, a high-performance electric drivetrain generation, and a New Cluster Architecture (NCAR) geared exclusively towards battery electric vehicles. The Neue Klasse line will focus on the concept of circularity (more on this later). Rolls-Royce and BMW’s motorcycle segment will also evolve in the direction of electromobility.

The company’s transition to electric mobility isn’t developed in silos. It’s tied to its digitalization and sustainability initiatives making it cohesive and interdependent.

Tackling digitalization: BMW’s initiatives and transformation

According to BMW’s view, the future of automobiles is highly digitized with increased connectivity.

The company is moving decisively in that direction by focusing its digital transformation strategy on two pillars:

• Initiatives that improve its operations.
• Initiatives for further digitization of its products.

In its operations,  for example, the company implements a  predictive maintenance strategy  to prevent unnecessary production downtimes. It includes the use of sensors, cloud-based data analysis and Artificial Intelligence (AI) to assess the condition of its equipment before they present any flaws. It has also developed a complete online sales process and digital tools to aid customer experience inside the stores.

In its products,  the company is developing appropriate software for all of the engineering aspects of its vehicles and for additional services for its customers. It offers, for example, remote software upgrades and “functions of demand.” Since 2020, the company has been offering the  My BMW  and  MINI  apps. BMW also aims to develop technologies for autonomous driving, i.e.  technologies for automated driving beyond level 3 .

The future of driving is autonomous, and it causes premium and luxury brands, like BMW, to take their attention away from designing the perfect driving experience and directing towards designing a cabin for the perfect cruising experience.

Car mobility turns into a pleasant and sustainable cruise.

Circularity: BMW’s sustainability strategy

The introduction of stringent legislation and regulations regarding environmental impact and responsible governance forces corporations to incorporate sustainability and responsibility into their  strategic planning .

The more prudent companies have developed capabilities to address matters or, at the very least, develop the capacity to adapt to immediate additional regulatory changes rapidly.

So, BMW has set up impressive sustainable goals and mobilizes significant resources to accomplish them. Here are the company’s most important sustainability initiatives:

• Systematic integration of sustainability issues in decision-making. The Board of Management evaluates every topic submitted from the point of view of sustainability.
• Sustainability is built into individual market strategies. A holistic program is developed with centralized measures but combined with local activities in the markets. Best practices are shared within an established international sustainability network.
• Decarbonize the BMW Group’s vehicle fleet by an average of 40% over the entire life cycle (Scopes 1-3) by 2030 compared to 2019.
• Achieve net zero emissions across the entire value chain by 2050.

To achieve these goals, the Group integrates its electric mobility transition with its sustainability strategy. In other words, it changes its entire operational capabilities from product design to product development to product recycling in order to meet its sustainability targets.

But besides demand and regulatory requirements, there is a third force that shapes BMW’s transformation:

The limited availability of high-quality secondary raw materials.

A challenge that heavily impacted the industry in 2021 and is still present. BMW’s answer to that challenge is the concept of  circularity.

The circular economy concept requires a holistic strategic approach and is based on four principles:  Re:think, Re:duce, Re:use and Re:cycle . Its main objective is to create closed material loops that will give the company an alternative source of secondary material. Some highlights of the circularity concept are: 

• The preference for secondary materials by reducing the use of primary raw materials in the automotive value chain. For example, closing material loops in the production chain.
• The implementation of the  Secondary First  approach which stipulates specifications for products, materials, and suppliers.
• Investments in resource-friendly technologies through funding of startups like Lilac Solutions, Boston Metal, and H2 Green Steel that offer materials from total green or eco-friendly production processes.
• Effective resource management, including the reduction of water used in production processes, the reduction of waste generated in its facilities, and the reduction of its emissions of volatile organic compounds (VOC3).

The Group also implements various initiatives to increase its energy efficiency and the amount of energy drawn from renewable sources. However, challenges always occur, and in 2021, the scarcity of semiconductors increased the energy consumption at some of its plants, increasing the YoY absolute consumption of the company.

But the company expects to improve its progress in the following years.

As a testament to its circularity approach, BMW has announced the design of a concept car called  BMW i Vision Circular  that will be made entirely out of recycled material and will be 100% recyclable.

The last part of BMW’s transformation concerns employees and society.

BMW’s employee development, attractiveness, and corporate responsibility

Attracting, retaining and developing talent is crucial for the success of BMW’s transformation.

To become an attractive employer, the company offers the following:

• Above average remuneration packages.
• A variable component dependent on the BMW Group’s overall performance.
• Additional benefits such as Company pension schemes and an attractive range of mobility benefits.
• A diverse range of options for working conditions like flexible working hours, remote working, sabbaticals and additional holidays (with a corresponding reduction in salary)

Its favorable working conditions have earned the company a number of awards and rankings, claiming the top spot against its fellow car manufacturers in multiple prestigious surveys.

To retain the great talent it attracts, the company:

• Conducts an internal employee survey every two years to assess the organization’s performance from within. The last one was in 2021 and demonstrated significant progress in all areas surveyed, and, most importantly, it demonstrated employees' support for integrating sustainability with strategy.
• Encourages employees to submit ideas on matters out of their normal remit and rewards those that generate a positive financial effect for the company with a bonus. In 2021, the company paid € 30.4 million in bonuses.
• Trains its employees. In 2021, BMW launched the largest training initiative in its history that increases the expertise of its workforce in electrics and electronics, data analysis, innovative production technologies, and new working methods.

To further support its transformation needs, the company has also developed internal processes that promote the desired personalities and skills to management positions.

BMW views diversity as a strength and makes considerable effort to embed it into its culture.

• It implements group-wide initiatives to raise awareness throughout the organization, like its annual Diversity Week and the internal communications campaign called  Driven by Diversity .
• It encourages employees to engage and propose their own initiatives while it supports local internal networks and the BMW Group PRIDE group promoting the interests of the LGBT+ community.
• It takes a holistic approach by developing initiatives on five key diversity dimensions: cultural background, age and experience, sexual orientation and identity, physical and mental ability, and gender.
• It has set targets to increase the percentage of women in management positions and in the total workforce of the BMW Group.

The company has a set of KPIs to measure its progress on these fronts and is evaluated externally on the effectiveness of its initiatives.

When it comes to its corporate responsibility, BMW aspires to address concrete needs and achieve a long-term impact by means of its corporate citizenship activities. These activities leverage the company’s expertise and include crisis assistance – e.g. funded rescue services during the 2021 flood disaster in Germany – and developing local educational programs for younger people.

Key Takeaway #2: Bet on a clear and educated vision of the future

There are no strategies that are future-proof. At least, not good ones. When your industry evolves, make sure you’re prepared for the new way of things:

• Increase your sensitivity to market changes and industry trends. Have processes to gather the data, process it and evaluate it.
• Form a hypothesis for the future state of your industry and write it down as clearly as possible. 
• What changes in a fundamental way? For example, the transition from a driving to a cruising experience requires prioritizing different principles.
• Decide who you want to be in that future and what capabilities you need to build today to achieve that.

Why is BMW so successful?

The success of BMW is due to its innovative engineering and design, as well as its demonstrated ability to make sound strategic decisions that help it adapt quickly to market changes.

The company has a long history of innovation that has helped it stand out in the automotive industry, and it is consistently focused on making sure its customers are satisfied with the cars they purchase. Over the years, BMW has evolved into a relationship brand building a loyal – and, dare we say, sometimes hardcore – customer base.

What is BMW’s mission statement?

BMW’s mission statement is “ to become the world's leading provider of premium products and premium services for individual mobility. ”

This vision encompasses the company’s goal of providing the best experience possible in the automotive industry, from the design and engineering of its products to its customer service.

Growth by numbers

CASE STUDY BMW NORTH AMERICA

Generative AI in the driver’s seat

Accenture and BMW teamed up to create a new platform that uses generative AI to drive decisions across North America, accelerating productivity and experiences.

2-MINUTE READ

Turning enterprise data into knowledge entails sharing deep subject matter expertise between many people and sources. This process takes a considerable amount of time—days, weeks or even months.

But thanks to the power of generative AI (gen AI), we’re now able to shorten that time frame, going from data to knowledge to real-time insights in just minutes.

That’s what we’re doing with BMW North America, using our gen AI platform EKHO (Enterprise Knowledge Harmonizer and Orchestrator) to collect and analyze its enterprise data. The platform uses large language models to intelligently answer complex questions across business functions and use cases.

The heart of the platform contains multiple AI-enabled applications (GPT agents) that intelligently choose the right data source and pull information based on the user’s question and enterprise-specific data.

When an employee asks a question through the platform’s simple interface, it selects the right knowledge base and continues to refine answers based on the user’s feedback. EKHO solves new issues by learning from and applying past scenarios and pulling any new information added to the knowledge bases in real time.

productivity surge with EKHO

Gen AI: The reverb effect

Thanks to the platform’s flexibility, EKHO can be applied to a vast number of tasks across the company—and on the showroom floor.

Imagine a BMW customer walks into a dealership, ready to buy their dream car but not prepared to make lots of decisions. Between the paint, tech, interiors and accessories, there are nearly 10 million possible configurations. Each variable has its own set of rules, which means some features aren’t compatible.

In the past, a BMW salesperson would have to consult manuals—spending hours cross-checking different features and customizations. Using EKHO, salespeople can cut the time consuming process to a matter of minutes.

No limits, all speed

With its customizable architecture, EKHO use cases are virtually limitless across organizations and business functions. For example, in manufacturing, it can be used to optimize supply chain processes by answering inventory and logistics questions.

The EKHO platform also can be integrated with marketing and sales, providing real-time data and customer insights to optimize campaigns.

Regardless of industry or use case complexity, EKHO’s flexible architecture and real-time analysis capabilities have the power to help companies like BMW use data and insights to stay in the fast lane.

We are making bold moves, together

NBCUniversal partnered with Accenture to launch and scale Peacock, the company’s premium streaming service, that has been the fastest-growing streaming platform in the U.S. for two consecutive years.

Accenture and Fortune transformed the iconic Fortune 500® list into an AI-driven platform that gives business leaders access to insights like never before.

BBVA worked with Accenture to become one of the world’s most customer-centric banks. Using digital technology to reach people where they are has helped them see massive growth.

Together, Gerando Falcões and Accenture are bringing hope to thousands in Brazil.

Changi Airport has been ranked the World's Best Airport twelve times. To take the traveler experience to new heights, we created ChangiVerse, an immersive metaverse experience.

Accenture and Marriott International created a new global HR hub that delivers employee experiences as exceptional as the guest experiences that make Marriott, Marriott.

Together, we turned finance operations from transactional to transformational. Moving BT Group’s finance function to the cloud boosted operational cost efficiency by 30%.

Outer space is full of untapped insights. e-GEOS is partnering with us to unlock the secrets of space data to help solve some of the world’s biggest challenges.

Netflix and Accenture Song teamed up to slay a monster. And turn a spaceship into a boat. Here’s how our team used visual effects to bring the ideas to life, pixel by pixel.

Car brand smart wanted to replace traditional auto sales with a direct-to-consumer experience. We brought a new platform to life—and sold out an entire line of cars in 24 hours.

We’re working with The Good Food Institute and Food System Innovations to reinvent the meat alternatives industry and bring new alternative proteins into the mainstream.

Together, we’re reinventing the places where we work, live and play. Johnson Controls and Accenture are making buildings smarter and greener using the OpenBlue platform.

PPC makes the switch from commodity supplier to diversified digital powertech enterprise.

MEET THE TEAM

Roland Mayr

Senior Managing Director

Raju Ivaturi

Client Account Executive

Harminder Anand

Technology Delivery Lead

• Harvard Business School →
• Faculty & Research →
• February 1992 (Revised January 2002)
• HBS Case Collection

BMW: The 7-Series Project (A)

• Format: Print
• | Pages: 20

About The Author

Gary P. Pisano

Related work.

• September 1994 (Revised January 2002)
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BMW: The 7-Series Project (B)

• BMW: The 7-Series Project (B)  By: Gary P. Pisano and Sharon L. Rossi

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Home » Human Resource Management » Case Study: Human Resource Management at BMW

Case Study: Human Resource Management at BMW

BMW (Bayerische Motoren Werke in German, or Bavarian Motor Works in English) is basically a German company with vast experience in the field of cars and was introduced in 1916. This company spends more money on its human inputs to add value and also its complex contribution of human resources creates its competitive advantage . BMW’s specialized staff which are able to offer superior quality of product and services in the market with the customer experience. Human resources plays important role in the BMW even in the time of recession as they have invest on the human inputs. But this depends on the financial condition and capabilities of the market as they had invested in training development and recruitment of the new management teams in their organisation. Earlier BMW was not giving importance to its customer services and its staff only focusing on its products and places for its expansion but later on they realize that human resources and their management is important for success in the market and competition. In BMW the goal of human resources is to change and improve their markets by using the new methods of production and materials and organise them into the excellent way of customer servicing. As always in BMW the goal of human resource management is to add more value and improve the ratio of cost in the added value of its car products. The main goal of HRM in BMW is to make people more productive and creative for the long term standing with them and when the management staff will be more productive then the jobs get more skilled. In recession also this company had constantly invested in the human resources and its development.

Human Resource Strategies in BMW Group

BMW is company which carries out very well planned strategies in its organisation. In this organisation the human resource strategy is applying to the whole organisation and BMW is improving its products and making a proper customer satisfaction by applying this strategy. This strategy is plays a very vital role in the BMW organisation and its employees. It helps them to innovate and create new products and services to their customers and making its products available and delivered in all areas where they are expanding their activities. Earlier BMW was making their products wrongly and not understanding the capabilities and needs of its customers as they were not giving importance to its human resources so after sometime they realize the exact meaning and importance of its resources so now they can focus more on markets and its customers. BMW is now making its organisation and its employees flexible so that they can change according to the technology and the needs of its customers in the market. Human resource strategies help them to take the proper care of people issue for the long term by providing best quality products and services, making long term commitments and needs for the future. The aim of BMW in this strategy is not to give them low cost products. Their main aim is to provide the high capable workforce and making its products unique in the competitive market. BMW is concerned with its managers and the staff to make them more innovative and developing their skills so that they can achieve a high task goals and objectives.

The following are the Human resource strategies of BMW:

• Recruitment and Selection: The selection of the candidates is the first task and strategy of BMW. This is the most important element of the BMW’s human resource management. In this they have to select the candidate who can match up the requirements of the job role. This includes the person who can identify the market conditions, attract customers to sell their products. The first process in this process is to analyse the role and then they develop the person’s specification of that job satisfaction and then he going to identify the market condition to attract customers and then screening of applications. In screening of applications they short list the selected candidate whether to select or reject. After this they conduct interviews, assessments and tests of the candidate to decide select or reject. When candidate pass this interview then they check the references in the resume of the candidate and after above all they offer the person to work in the organisation. BMW is following a very good selection technique with their clear specifications and procedures in a long term. They judge the candidate according to the suitability of the role which provides them necessary benefits. Suitability of the role in the job includes the knowledge, skills, experience and personal attributes of the person which help him to perform according to the specifications of the job. All this process of selection and recruitment is properly planned in an organised way considering their future needs. Attracting the customers which is a part of selection process plays an important role as it does not include selling their products but also includes advertising the brand BMW in the newspapers, magazines, internet, television etc. and making awareness of the luxurious comforts and safety of the products of BMW. It includes the heavy expenditure in advertising the brand but they need to be more careful in spending on advertising anyways this strategy for marketing their employment.
• Screening: In this step of recruitment and selection of BMW human resource management the candidate have to fill the application form which shows the subjective quality of the person for the role and also helps in improving the quality of the process and increase the consistency. In application form the person has to fill up his bio data and other questions which show the difference of higher and low level of performers.
• Interviewing: Interviewing person who had applied for the role is very important otherwise they can’t judge the mental and physical capabilities of the candidate. This process is conducted by the line managers of the BMW. In this interview they have long discussions, questions about the previous experience, favorites. This is the most commonly used technique in every multinational organisation which helps the interviewer to make a judgement about the candidate specialization for the job. They can judge whether the person can satisfy the job or not? The questions in this interview are properly listed to get specific information about a standard of judgement or criticism and the candidate get a score against the answers he had provided in this interview.
• Testing: Another process followed by the BMW human resource department is testing the ability and personality of the candidate. In the ability test they test or measure the aptitudes like knowledge, vocabulary, typing speed, awareness about the products and accuracy of the candidate. On the other hand are the personality tests which show the personal characteristics, attitude, behavior and values of the candidate. In this they also test the individual beliefs and the capability that how they deal with problems in selling the products or their convincing and marketing power in the organisation. In this process of testing the candidates in BMW the ability tests are more consistent and free from errors than the personality tests.
• Checking References: After testing the candidate then the manager or the interviewer has to check the references of the educational qualifications, eligibility, work experience, licences and the special check on the criminal records and health problems. After checking the references they give the offer letter whether it conditional or unconditional.

Training and Development

Once candidate pass the above steps of recruitment and selection then he has to undergo from the training of the role offers to him. This training process is essential to improve the performance of the job which helps to develop their personal and professional characteristics of candidate. This training involves coaching and development of the professional skills which are more efficient and effective in learning and development of the individuals. The different types of training are informal training, on the job or off the job training , product and skills training, behavioral development and technical training. They give the training to their employees for how to develop different styles of learning, materials, design of the products, and also look after their personality types. In this training also involves use of heavy and expensive equipment and machines and provide stipend in between their training. This training on machines and equipment improves their performance of the job. BMW teach their employees the easy and small steps first and cover their health and security issues and make their employees proud to be a part of this organisation. In this training the line managers face the major challenges to develop the confidence, personality and skills to solve and find the solutions to the problems in the organisation. Managers want their trainees to be creative, innovative, productive and sufficient to operate at tactical and strategic level in the company. They trained them to seek the responsibilities of the task given to them and never be step back in any problems. After the trainee complete the process of his training and development of the specific role given to him then the line managers give them a pat on their back and recognise them for their successful completion so that they motivate in performing their tasks well on the job.

Performance Management

In BMW the performance of the managers and staff is initially important to achieve the goals and objectives of the organisation. Performance management is the essential and organised process that carries the success and helps in developing the capabilities and performance of the individual or work team. The strategy of human resource management is to develop the managers or leaders in the organisation who can help their employees or subordinates to make their performance effective and efficient. The managers are the only ones who can manage the performance of the workers by understanding and knowing what the employees expect from them and engage them in each and every activity and ask them for feedback which can improve their quality of performance in the organisation. The BWM human resource management is working more on this performance by enhancing them to learn their goals and objectives and they recognise that there is a greater need for the management to apply these performance tools in the company through which they can develop their reviews, skills and framework. In this management the employees are sharing their views and ideas with their leaders and managers so that they can find better ways measuring and improving the performance . The performance management of the BMW shows that how BMW is working its functions effectively in the environment. The performance of this company shows how they are executing their plans, goals, objectives and what will be the outcome of their performance? The purpose of the BMW management team is to achieve the better results by managing the performance and maintain the standards of performance of their work team. The main goal of the line managers is to create or develop a relationship or culture between them and their workforce to seek the responsibility for the consistent improvement in the performance and skills of their business procedures and processes. There are certain principles which BMW follows in performance management i.e. line manager transfer their corporate goals in into their human resource department at individual and group level, clarifying the goals to their workers, understanding and sharing the problems and finding solution to improve the performance, continuous feedback, encourage their subordinates for open and honest communication, mutual respect and transparency between them. These all basic principles implemented properly by this company HR team and it surely helps them in improving their performance management. In this we can conclude that performance management is to support by the managers to their workforce to improve their performance, skills, knowledge and experience while doing their job.

Employee Relations

In modern times relation with employees is essentially important and as a part of human resource strategy. Involvement and participation of both employee and managers in the organisation shows how strong is the relation between them and the difficulty of maintaining this relation for long time. In BMW the managers are constantly involving with their employees in several practices which directly improve their relations and performance in the organisation. The main task of managers is to maintain the employee relations so they can generate more commitments for their work and contribute to their operation effectively. The manager of the BMW focuses mainly on the engagements and commitments of their workers to maintain their employee relations. There are many benefits which BMW provides to its employees when they join the company like medical insurances, annual bonuses, dental and vision insurance, holiday pay, vacation pay, life term insurances which include accidental and death insurance, medical expenses, disability insurance according to long and short term which will be fully paid, personal day pay, sick leave, free education training and development. These all benefits which BMW provides to its employees play a crucial role in maintaining the relation with employees. These benefits also help the organisation to improve the performance and contribution of employees in the production of work. The chief executives of BMW are rising the salary and bonuses of their staff twice to the workers working in other companies. BMW is the only major and first company who had make the bonuses of assembly workers same as of the top managers in the organisation. BMW is showing a great contribution to improve the relations with the employees so that they work with dedication and hard work which increases the sales and production of the company. The spokesman of BMW in his interview said that they are creating transparent and regular relations with their employees so that there should be no gap between the managers and workers. They are giving bonuses to the superiors and subordinates depend on the company’s profit, sales and performance of each employee. BMW is also sharing profits with their line and top managers which is good in business to deal at the time of recession. During the time of recession the profit sharing motivates and encourages worker which is a good way for the BMW to make their workers employed.

There are certain factors which BMW has adopted to improve its relation with employees:

• Downward communication: The first factor that maintains the employee relation is the downward communication from managers to its subordinates. In this the managers should educate and trained their staff towards their role in the organisation which shows leadership in which employee has to follow his manager for executing the tasks and responsibilities.
• Upward problem solving and finding solution: Another factor for improving the relations is not only from managers to subordinates. It also from subordinates to its superiors in which the subordinates participate in the decision making process and support its managers in solving the problems by creating new ideas, opinions and find solution instantly. This motivates them to maintain cooperative relations by different suggestions, schemes and surveys etc.
• Task Participation:  Another category of improving the relations of employees with their managers is the participation and involvement of both of them in task or responsibility given to them. This also involves the job redesign in which they have to extend the task undertaken in work. This task participation involves financial, consultation and representative participation and involvement. Manager and employee are expected to play an important role in the development and maintenance of the tasks in the job. They need to follow the new techniques and strategies to complete and achieve their goals, objectives and tasks of the organisation and share the commitment between them.

Personal Management

Another important strategy of human resource management in BMW is the personal management. BMW HRM staff is managing the employees in achieving the goals and objectives. In this personal management system the managers manages the education, qualification, training and experience of the employees. This is the process of directing the employees in achieving the long term and short term goals make them flexible enough to deal with any changes in the situation with intelligence and open frame of mind. Personal management in BMW includes the following;

• Team Building: Team building also an important task in personal management system in the organisation. The managers have to build the teams according to the experience and qualification of the workforce. The manager has to maintain the understanding between the team and give them edge in the corporate staff.
• Effective Meetings:  Effective meeting means that the managers have to conduct the interview for the staff and the committee in which they have to focuses on the agenda of meetings, goals and objectives to achieve to be planned and prepared. Discussions and participation’s of the right people involved in these meetings. While arranging these meetings the personal management has to decide the time, place and venue of conducting these meetings.
• Time management:  The time management is the most essential point of the personal management. They have to manage the time to prepare and plan to complete their tasks and responsibilities to achieve the goals of the organisations. They have to maintain a balance between their personal and professional lives.
• Decision Making: Decision making in the management helps to solve the problems to reach their goals and objectives and provide them alternatives for executing their plans. In this managers gives right to their subordinates to participate in decision making process and support their superiors which helps in maintaining the understanding and cooperation between them.

Related posts:

• Strategic Human Resource Management Process
• Challenges of Strategic Human Resource Management
• ADRM Model of Human Resource Management
• Corporate Entrepreneurship (CE) and Human Resource Management (HRM)
• Case Study: BMW’s “The Hire” Ad Film Camapaign
• Evolution of Human Resource Management (HRM)
• Roles and Responsibilities of Human Resource Management
• Harvard Framework for Human Resource Management
• Ethical Issues in Human Resource Management
• The Role of Human Resource Management in Organizations

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Case study: How BMW Brilliance respects human rights across its operations and supply chain

As the leading provider of premium vehicles and services in China, BMW Brilliance is committed to respecting the human rights of all individuals impacted by its operations     Tweet This! and has established policies and procedures to avoid human rights infringements and address adverse human rights impacts that might involve the company, as core foundations of its business.

This case study is based on the 2016 Sustainability Report by BMW Brilliance published on the Global Reporting Initiative Sustainability Disclosure Database  that can be found at this link . Through all case studies we aim to demonstrate what CSR/ ESG/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing.

BMW Brilliance expects all employees and business partners to respect human rights in their daily actions, and takes special care to monitor human rights issues in both its own operations and along its supply chain. In order to respect human rights across its operations and supply chain, BMW Brilliance took action to:

• protect the health and safety of employees
• eliminate forced, compulsory or child labour
• respect freedom of association
• fight discrimination and harassment
• provide fair compensation and respect legal working hours
• minimise the impact on local communities
• address human rights risks in the value chain
• prevent human rights violations

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With this case study you will see:

• Which are the most important impacts (material issues) BMW Brilliance has identified;
• How BMW Brilliance proceeded with stakeholder engagement , and
• What actions were taken by BMW Brilliance to respect human rights across its operations and supply chain

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What are the material issues the company has identified?

In its 2016 Sustainability Report BMW Brilliance identified a range of material issues, such as product safety, occupational health and safety, air pollution, emissions and climate change, talent attraction and retention. Among these, respecting human rights across its operations and supply chain stands out as a key material issue for BMW Brilliance.

Stakeholder engagement in accordance with the GRI Standards              

The Global Reporting Initiative (GRI) defines the Principle of Stakeholder Inclusiveness when identifying material issues (or a company’s most important impacts) as follows:

“The reporting organization shall identify its stakeholders, and explain how it has responded to their reasonable expectations and interests.”

Stakeholders must be consulted in the process of identifying a company’s most important impacts and their reasonable expectations and interests must be taken into account. This is an important cornerstone for CSR / sustainability reporting done responsibly.

Key stakeholder groups BMW Brilliance engages with:

How stakeholder engagement was made to identify material issues

To identify and prioritise material topics BMW Brilliance invited 16 representatives of stakeholder groups to share their ideas and concerns in individual, detailed interviews.

In its 2016 Sustainability Report BMW Brilliance reports that it took the following actions for respecting human rights across its operations and supply chain:

• Protecting the health and safety of employees
• To protect the health and safety of its employees BMW Brilliance conducts health and safety training, promotes health checks, and implements needs-based health initiatives. In addition, in its Associate Handbook, BMW Brilliance informs its employees of their rights and responsibilities regarding occupational health and safety. The handbook also includes information about where to access its environment, health and safety policies.
• Eliminating forced, compulsory or child labour
• The complexity of the automotive supply chain requires special care regarding the risk of forced, compulsory or child labour and BMW Brilliance expects full compliance with Chinese Labour Law and relevant regulations in these matters, applying e a zero-tolerance policy. With a ban on forced, compulsory and child labour in all supplier contracts, BMW Brilliance makes sure that its suppliers uphold the same standards it has set for itself.
• Respecting freedom of association
• BMW Brilliance recognises the right of all workers to engage in collective bargaining to agree upon working conditions by joining a legally recognised trade union, or any other body that represents their collective interest. Accordingly, the BMW Brilliance Labour Union was established in 2007, representing all local employees and working to protect their rights and interests and to mediate disputes between employees and the company.
• Fighting discrimination and harassment
• BMW Brilliance is committed to providing a work environment free from any discriminatory behaviour and harassment, as stated in its Associate Handbook. All employment decisions are taken regardless of ethnic origin, skin colour, gender, religion, nationality, marital status, age, sexual orientation or political beliefs. Additionally, migrant workers are treated equally to any other employee, with full coverage of social welfare and protection.
• Providing fair compensation and respecting legal working hours
• BMW Brilliance is committed to providing fair compensation and to respecting legal working hours, for its employees to live in dignity and conserve their long-term health and productivity. The Human Resources department and line managers review employee leave and working hours on a monthly basis, ensuring employees take their full entitlement of annual leave during the year. In addition, BMW Brilliance applies three different work time models to keep the worked hours and monthly salaries stable despite market fluctuations, and rewards employees with total remuneration above average and aligned with the upper-third of the respective labour market in China.
• Minimising the impact on local communities
• In order to minimise its impact on local communities, BMW Brilliance considers potential social and environmental consequences in the earliest stage of product development and infrastructure planning. All BMW Brilliance infrastructure construction activities are pre-examined, and go through a national Environmental Impact Assessment. BMW Brilliance also seeks to minimise the environmental impacts of its business activities by constantly reducing its resource consumption, emissions and waste for disposal, and takes all necessary measures to fight corruption, in order to prevent personal gain or preferential treatment.
• Addressing human rights risks in the value chain
• BMW Brilliance requires its direct suppliers to meet the same social and environmental standards applied by the company. Compliance with internationally recognised human rights and with labour and social standards is part of BMW Brilliance’s General Terms and Conditions for all purchases and included in all supplier contracts. Additionally, BMW Brilliance constantly reviews its corporate policies and initiatives regarding their effectiveness in avoiding human rights infringements in its supply chain. The supplier risk management process applied throughout the BMW Group network, enables BMW Brilliance to identify and analyse potential sustainability and human rights risks along its supply chain. In its regular supplier review BMW Brilliance considers issues such as operational health and safety, child labour risks and environmental impacts.
• Preventing human rights violations
• BMW Brilliance’s employees can submit information about possible human rights violations within the company through the BMW Brilliance SpeakUP Line, anonymously and confidentially. To prevent human rights violations, BMW Brilliance also provides employee information and training, particularly on the SpeakUP programme, and carries out risk analyses and human rights impact assessments, maintaining internal monitoring and reporting structures.

Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?

The GRI Standards addressed in this case are:

1) Disclosure 407-1 Operations and suppliers in which the right to freedom of association and collective bargaining may be at risk

2) Disclosure 408-1 Operations and suppliers at significant risk for incidents of child labor

3) Disclosure 409-1 Operations and suppliers at significant risk for incidents of forced or compulsory labor

4) Disclosure 412-3 Significant investment agreements and contracts that include human rights clauses or that underwent human rights screening

5) Disclosure 413-1 Operations with local community engagement, impact assessments, and development programs

Disclosure 407-1 Operations and suppliers in which the right to freedom of association and collective bargaining may be at risk corresponds to:

• Sustainable Development Goal (SDG) 8 : Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all
• Business theme: Freedom of association and collective bargaining

Disclosure 408-1 Operations and suppliers at significant risk for incidents of child labor corresponds to:

• Business theme: Abolition of child labor
• Sustainable Development Goal (SDG) 16 : Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels
• Business theme:  Abolition of child labor

Disclosure 409-1 Operations and suppliers at significant risk for incidents of forced or compulsory labor corresponds to:

• Business theme: Elimination of forced or compulsory labor

Disclosure 412-3 Significant investment agreements and contracts that include human rights clauses or that underwent human rights screening does not correspond to any SDG.

Disclosure 413-1 Operations with local community engagement, impact assessments, and development programs does not correspond to any SDG.

78% of the world’s 250 largest companies report in accordance with the GRI Standards

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References:

1) This case study is based on published information by BMW Brilliance, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original, please revert to the original on the Global Reporting Initiative’s Sustainability Disclosure Database at the link:

http://database.globalreporting.org/

2) https://www.globalreporting.org/standards/gri-standards-download-center/

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BMW’s Organizational Structure (An Analysis)

BMW’s organizational structure represents business operations primarily in the automotive industry, although the company’s hierarchy and structural divisions also address the management of financial services and motorcycle manufacturing. The main support of this company structure is for automotive manufacturing, distribution, and sales. Nonetheless, as BMW’s mission and vision emphasize mobility and transportation products, the corporate structure ensures the strategic growth and development of all segments of the business. The company’s organizational design and structural characteristics influence business growth in the automotive industry. BMW’s organizational structure provides a backbone for implementing business growth strategies.

BMW (Bayerische Motoren Werke/Bavarian Motor Works) implements its competitive strategies with its organizational structure’s support for resources and processes. This business structure enables competence against competitors, including automakers, like Toyota , Tesla , Ford , and General Motors , as well as motorcycle manufacturers, like Harley-Davidson . This competition involves innovative technologies and marketing campaigns, as demonstrated in the Five Forces analysis of BMW . The company’s corporate structure helps keep the integrity of the automotive business organization despite competitive pressure.

Characteristics of BMW’s Structure

BMW’s organizational structure is designed to enable multinational business growth in automotive and motorcycle markets. The company’s structural characteristics support strategic management that buttresses business growth and development in these vehicle markets. The characteristics of BMW’s structure are:

• Departments for corporate functions
• Product segments
• Regional divisions

Departments for corporate functions indicate the global centralization of BMW’s organizational structure and its hierarchy. This structural characteristic allows managerial control that encompasses international operations in the automotive, motorcycle, and financial services markets. In this company structure, the corporate headquarters and their officers are responsible for directing BMW’s generic competitive strategy and intensive growth strategies for multinational operations. Also, human resource development approaches are designed based on communication channels, lines of authority and command, and business processes inherent in this automotive business structure. For example, the department for labor relations implements strategies and programs for BMW’s organizational culture (work culture) through leaders, groups, and teams in the corporate structure. The structural design ensures that the company’s culture is developed throughout the business and its human resources. The following are the departments for corporate functions in BMW’s structure:

• Office of the Chairman
• Customer, Brands & Sales
• People, Real Estate & Labor Relations
• Purchasing & Supplier Network
• Development

Product segments in BMW’s structure are based on the types of products that the company offers to its target markets. The business is known for its automobiles, but also manufactures motorcycles and provides financial services. The persistence and profitable operations of these segments depend on the effective use of business strengths, such as the company’s brands and other competitive advantages mentioned in the SWOT analysis of BMW . The following are the product segments in BMW’s organizational structure:

• Motorcycles
• Financial Services

Regional divisions in BMW’s company structure account for market differences. For example, the European and Asian markets differ in terms of customer preferences and expectations regarding cars and other vehicles. The geographic divisions of this corporate structure support BMW’s marketing mix (4P) involving strategies and tactics based on the characteristics of regional markets. Strategies for distribution and sales in regional and local automobile markets are fine-tuned through the regional divisions of this organizational structure. The following are the regional divisions in BMW’s business structure:

• Other regions

BMW’s Organizational Structure & Business Strategy

BMW’s structure continues improving to support and enable business strategies. The regional divisions in this organizational structure relate to the strategic factors influencing vehicle markets. For example, the performance of these divisions depends on how the industry trends examined in the PESTEL/PESTLE analysis of BMW influence market demand for different types of cars and motorcycles. Moreover, management decisions depend on the characteristics of the automotive and motorcycle business structure. For example, this company structure affects the goals and targets in BMW’s operations management , such as in productivity management, product design, quality management, job design, and layout design.

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