BMW: LEADING TOWARDS THE PATH OF EXCELLENCE

A CLOSE EXAMINATION OF BMWS CORPORATE STRATEGY

By:

NAME

CONTENTS
INTRODUCTION .......................................................................................................................... 3 AUTOMOBILES IN THE UNITED KINGDOM: AN INDUSTRY OUTLOOK ........................ 4 CORPORATE DILEMMA 1: TO COLLABORATE V/S COMPETE ......................................... 6 CURRENT STRATEGY ............................................................................................................ 6 PROPOSED STRATEGY .......................................................................................................... 7 Strategy 1: Collaboration V/S Competition ............................................................................ 7 Strategy 2: Creating A Strategic Center To Manage A Web Of Partners .............................. 9 CORPORATE DILEMMA 2: THE PARADOX OF COMPLIANCE & CHOICE .................... 11 CURRENT STRATEGY .......................................................................................................... 11 PROPOSED STRATEGY ........................................................................................................ 11 Strategy 1: Adopting Blue Oceans Strategy to Inculcate Environment Regulations ............ 11 Strategy 2: Prioritising BMWs Competencies Over Industry Trends ................................. 13 CONCLUSION ............................................................................................................................. 14 REFERENCES ............................................................................................................................. 15 APPENDIX ................................................................................................................................... 17 APPENDIX 1: SWOT ANALYSIS.......................................................................................... 17 APPENDIX 2: UNITED KINGDOM AUTOMOBILE INDUSTRY: HOUSEHOLD EXPENDITURE ON VEHICLES ............................................................................................ 18 APPENDIX 3: THE COMPETITIVE STATUS OF THE UK AUTOMOTIVE INDUSTRY 19 APPENDIX 4: THE AUTOMOTIVE REGULATORY FRAMEWORK OF THE NEXT 10 YEARS ..................................................................................................................................... 20

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INTRODUCTION
Bayerische Motoren Werke (BMW) is one of the leading manufacturers of premium passenger cars and motorcycles. The company has a strong focus in research and development (R&D), which enables to develop innovative products to market and maintain technological leadership, which in turn enables the company to expand its customer base and generate incremental revenues. However, increased competition may lead to lower vehicle unit sales and increased inventory, which may result in a further downward price pressure and adversely impact the company's financial condition and results of operations. BMW has a strong focus on research and development (R&D). It operates a research and innovation network, which consists of 12 locations in five countries.

BMW is focused on expanding its product portfolio and to improve the functionality, quality, safety, and environmental compatibility of its products. The company's main R&D center, BMW Group Research and Innovation Centre, serves as the central interface for all technical and design-related activities in BMW's R&D. Its two subsidiaries, BMW Forschung und Technik and BMW Car IT are focused on developing new technologies for use in the automobiles. In addition, BMW Group's Innovation and Technology Centre in Landshut is focused on the development of lightweight technologies and innovative materials and appropriate production methods. The company's R&D expenditure for FY2011 was E3,373 million ($4,696.6 million), which represented 4.9 % of total sales. In addition, the company has an extensive distribution network, which consists of around 3,200 BMW, 1,400 MINI and 90 Rolls-Royce dealerships. In FY2011, the company sold 1,668,982 automobiles and 113,572 motorcycles. Hence, the extensive production and distribution network allows BMW to support its customers needs in an effective way on a global basis, while leveraging a low cost manufacturing and engineering footprint.

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AUTOMOBILES IN THE UNITED KINGDOM: AN INDUSTRY OUTLOOK

The automotive industry is a key contributor to the European economy and society. The ongoing economic turmoil we have been facing over the last years has shown the importance of maintaining a strong manufacturing base in the EU because of its strength as a source of growth and jobs. The European vehicle manufacturers are global players, driving innovation towards cleaner, safer, and more sustainable transport. In an increasingly fierce global environment, it is crucial that our industry retain and improve its competitiveness both in the EU and worldwide. The European regulatory framework, as well as industrial and trade policy, plays a decisive role in this respect. ACEA maintains a continuous dialogue with policy makers and other stakeholders in the EU, and provides expert knowledge and industry statistics.

Exhibit 1: Production output for the motor vehicles (ONS, 2013) Leading up to the 2008-09 economic downturn, output was broadly flat in both motor vehicle production and manufacturing. Between February 2008 and February 2009, however, motor vehicle output more than halved as the escalating global economic downturn and the uncertainty Page 4 of 21

it created led households and firms to postpone large purchases both in the UK and abroad. Manufacturing output also fell, albeit by a smaller proportion. Following the initial economic downturn, both the motor vehicle sector and the manufacturing sector more broadly returned to growth. Motor vehicle output started to rise in March 2009, followed by the manufacturing sector as a whole several months later. However, while the motor vehicle sector has grown fairly steadily since the beginning of 2009, manufacturing output as a whole has suffered a fresh reversal since the end of 2011. The most recent data suggest that while motor vehicle manufacturing has largely recovered to the pre-recession level of output, manufacturing as a whole is still 10% below the level attained at the beginning of 2008. Total household expenditure on transport has three components - expenditure on operating personal transport, the purchase of vehicles, and the use of transport services each accounting for around a third of the total. It accounted for 14.5% of total household expenditure in Q1 2013. In aggregate, household spending on all transport has been on a broadly downward trend since 2008 reflecting the pressure on households real disposable incomes from slow earnings growth combined with higher rates of consumer prices inflation. Households may also substitute away from more expensive goods and services towards cheaper alternatives. Set against these economic constraints, two factors may have helped to boost household expenditure on vehicles. The car scrappage scheme was introduced in 2009, offering the owners of cars which were more than ten years old a financial incentive to exchange their vehicle for a new one. This scheme ended in 2010. A more recent influence on purchases of cars may be the compensation payouts to consumers made as a result of payment protection insurance (PPI) mis-selling, amounting to a cumulative total of just over 10 billion since the start of 2011. The relatively large size of these payments offers households the potential to make large purchases, such as new cars, which they might otherwise have deferred. The timing of payments corresponds quite closely with the renewed pick-up in car purchases that began in 2011.

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CORPORATE COMPETE

DILEMMA

1:

TO

COLLABORATE

V/S

It is common to start reports like this with statements about increasingly competitive markets and the impacts of globalisation. While we cannot ignore the wider global trends that shape all industry sectors in the UK, all too often these terms are being used to suggest that the industrial decline in the Western World is merely an inevitable consequence of a trend at global level. This sentiment is generally amplified at times of economic contraction, when proponents of protectionism find an increasing audience. Yet the above statements are only partially true while competition in a mature industry, such as automotive, is bound to be dominated by unit cost (putting developed countries at a disadvantage), it is also driven by incremental innovations (putting emerging countries at a disadvantage). Furthermore, the global shift in manufacturing footprint (often called offshoring or Eastshoring) has not had an equal impact on all countries alike. We hence argue that policy decisions taken in support of the automotive and manufacturing industries in the Western World can make that vital difference, and it is in this spirit that we have compiled this study (Dev, 1996). Our objective is not to promote the industry as a whole, nor to highlight its many achievements, but on the contrary to provide a nononsense analysis of where the UK industry stands, where it is headed and what its likely future challenges will be.

CURRENT STRATEGY
BMWs core competitive advantage is providing luxury cars with an excellent technological product that too at affordable prices. Despite the fact that BMW is one of the pioneer brands in the automobile industry, it however, faces stiff competition from its closes competitors like Mercedes Benz, Volkswagen and Peugeot. The underlying corporate problem was that BMW adopted a competitive approach and started competing upon prices. This resulted in dilution of prices in the automobile industry (marked with entry of low budget car brands like KIA and Dacia) which resulted in loosing competitive advantage as a result the company succumbed to intense competition.

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PROPOSED STRATEGY
Leaders and organizations are acknowledging that even their best individual efforts can't stack up against today's complex and interconnected problems. They are putting aside self-interests and collaborating to build a new civic infrastructure to advance their shared objectives. It's called collective impact and it's a growing trend across the country. (de Wit B and Meyer R., 2004). Following discussion would outline how BMW can adopt an inside out approach. Strategy 1: Collaboration V/S Competition Hamel and Prahlad (Hamel and Prahlad, 1989) once quoted as saying there is no limit to what can be accomplished if it doesnt matter who gets the credit. This is a complete paradigm shift in thinking. What Stone talks about in her article on collaboration is that young entrepreneurs and social entrepreneurs understand and live out the idea that collaboration is more powerful and effective than competition. She sees social entrepreneurs as innovators who do not view other organizations as competitors but rather as innovators of change. There are two central things to these groups success: an endemic commitment to collaboration and a refusal to accept the small audience theory. The New Guard, shares without hesitation knowing that collaborating creates a better model, knowing that they can make a greater difference and contribute to true transformational change. Collaboration is often confused with colluding the market, it is however not the case and requires careful planning of strategic decisions keeping in mind best interests of the peer group and consumers. BMW can adopt following steps can be implemented to foster a culture of collaboration: 1.) Clearly define what you can do together: Many organizations find collaboration to be messy and time consuming. From the very beginning, companies like BMW must develop clarity of purpose and articulate, "What can we do together that we could not do alone?" Often, this means thinking beyond individual projects to whole solutions and big, bold ideas. Focusing on the region's growing transit system, the effort aims to accomplish what none of the groups could achieve on their own expanding access to jobs and transit service for the region as a whole, with particular focus on unlocking supplier management for designing advanced technological vehicles. 2.) Transcend parochialism: Even the most well intended collaboration is often crippled by parochialism. Individual organizations earmark their participation and resources for Page 7 of 21

activities that perfectly align with their own work or they use the collaboration platform as a way to get other participants to fund their own priorities. Senior leaders often have a "balcony view" of the core issue, understanding the needs of the field and the inherent limitations of their own organization's approach. The most effective of these leaders will put aside their organization's short-term interests in pursuit of the goals of the group. 3.) Adapt to data: The complex, multidisciplinary problems that many collaborative projects tackle do not have easy fixes. BMW would need continuous learning atmosphere and innovation and the use of real-time data to help participants understand what is and isn't working. Adjustments must be made on the fly. For example, multisector partnerships based on the Strive Together model have formed in more than two dozen cities to reengineer educational systems that are failing kids, from cradle to career. Unlike previous efforts, they have set specific goals along this entire continuum, and are committed to data-informed decision making. This model requires partners to continuously track and publish progress and results; and to collectively reflect on, reevaluate, and refine their work. Indeed, the Striving Together report card serves as a catalyst for discussion in communities about the current state of education. By reviewing trends over time, partners can highlight where they are having the greatest impact and where they may need to focus more energy ( Clyde, 1988). 4.) Support the backbone: In real time corporate problems it is observed that progress is best achieved when a "backbone organization," keeps the group's work moving forward. Staff of BMW must ensure that work is completed between meetings, track data, enable adaptation, disseminate knowledge, and build buy-in and ownership from all participants. Implementing aforementioned steps would help BMW to integrate its operations with learning practices (Storey, 1994). These learning practices can arise either from peer group or from self experience. Collaboration with your customers, and sometimes even with apparent competitors, creates stronger businesses. Most importantly, collaboration often leads to the discovery of the biggest and best of innovations, the ones that address unknown latent opportunities. While pure competitors are slugging it out often anguishing over new ways to make the same mousetrap better, or ways to do the wrong things faster, better and cheaper there are

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collaborators in the wings actually innovating and finding solutions to problems many people didnt realize they even had (Shah, 1994). Strategy 2: Creating A Strategic Center To Manage A Web Of Partners Original Equipments Manufacturers like BMW outsource majority of its work and rely on small suppliers across the oceans to supply them parts needed for manufacturing. In the past, the size of the corporation was largely determined by the transaction costs and transportation costs that would arise if activities were conducted in separate firms (Stanworth, 1992). The telecommunications revolution has reduced transaction costs among corporations, and has facilitated the inter-corporate flow of information. To an ever-increasing degree, autonomous business units will be able to integrate their planning without the need of a single hierarchical organization. The transportation revolution has reduced shipment costs, as has the decrease in physical components as a percentage of the final value of a good or service. The nature of economies of scale has changed as a result of these transformations (Westhead, 1997). While final assembly and marketing will still leave a key role for large corporations, success will depend on stimulating and coordinating continuous improvement among a wide array of individual business units.

Exhibit 2: A conceptual model of creative web (Lorenzoni & Baden fuller, 1992)

For much of the manufacturing sector, the corporate structure of the multinational corporation (MNC) provides a nearly automatic shift of business activities out of high-wage developed Page 9 of 21

countries to less developed countries with lower wage rates. The international product cycle literature was developed to explain the growth of the MNC, in which production and trade are linked to innovation and the international diffusion of new technology. For subsidiaries of MNCs, the development of global mandates for new products and components has become a continual necessity. While these rationalized production processes have been analyzed by academics, the implications for the role of the creative web will attract increasing attention. BMW needs to manage such a web of suppliers, peers and various other stakeholders. This web would improve knowledge sharing practices of the company which would enable BMW to flourish.

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CORPORATE DILEMMA 2: THE PARADOX OF COMPLIANCE & CHOICE

Automotive industry is indeed one of the most industries of a country. But with the increasing challenges from global warming, automobile sector is facing stringent regulations from the government. The European Union and the existing community legislation, as shown in Appendix 4 establishes the limit values applicable to control the pollutant emissions such as particulate matters or NOX from all heavy duty vehicles in the stages Euro IV (2006) and Euro V (2009). The objective of the proposal which is the subject of this consultation is to lay down harmonised rules for the next stage of emission limits (Euro VI) with a view to ensuring the functioning of the internal market while at the same time providing for a high level of environmental protection regarding atmospheric emissions. A second complication to the link between stringent national environmental regulation and eco-competitiveness is the fact that each automobile company in my set is a global manufacturer selling cars on multiple continents. This means that each company is operating under a patchwork of significantly different standard (Cravens, 1993).

CURRENT STRATEGY
Currently almost all automobiles companies including BMW are suffering from such a paradox i.e. providing unique technological product having latest features e.g. speed, extra comfort and more power which are necessary but results in high emission. This case is almost with every original equipment manufacturer (OEM) is sceptical about the potential benefits of going green (Smith, 1987). The fact however, is that in longer term adopting an environmentally friendly strategy would become a unique competitive advantage.

PROPOSED STRATEGY
Strategy 1: Adopting Blue Oceans Strategy to Inculcate Environment Regulations Most automobile manufacturers in the world has not yet adopted a positive outlook towards the environment sustainability. BMW, has been treading very cautiously over this path and has not fully revolutionised its businesses. The latest trend in the automobile industry towards environment sustainability is electric vehicles. BMWs closest competitor Nissan, recently rolled out Leaf, worlds first commercial electric vehicle. It would however not be advised for BMW to Page 11 of 21

roll out another electric leaf but any progress in this direction would yield positive outcomes for the company.

Exhibit 3: Blue Oceans Strategy (Focus Towards Environment Sustainability & Service Differentiation) Source: Kim, W.C.; Mauborgne, R. (2005)

The greening of management theory suggests that to ensure the environmental sustainability of businesses, a paradigm shift is required away from valuing profit maximisation as the fundamental objective of business, towards incorporating more eco-centric goals and corporate social responsibility into the management equation (Senge, 1990). The development of mechanisms and tools for a business's environmental sustainability needs to take into consideration the complex issue and value-laden environment in which corporate environmental policy-making occurs, if tools are to be socially and politically legitimated. In this policy-making context there has been growing importance placed on the role of social science in environmental decision-making, as the natural sciences alone may no longer be sufficient to guide the development of sustainable environmental management (Teece, 1997).

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Strategy 2: Prioritising BMWs Competencies Over Industry Trends Identifying and understanding the determinants of performance differences among firms is a central issue in strategy research. Automobile industry is marked with extreme challenges and various stringent regulations. According to Baden-Fuller and Stopford (1994), it is the firm, not the industry, which is the main causal factor for success. Focusing on the industry is the old way, based on the assumptions that: Some industries are intrinsically more profitable than others In mature environments it is difficult to sustain high profits It is environmental factors that determine whether an industry is successful, not the firms in the industry The new view is: There is little difference in profitability of one industry versus another There is no such thing as a mature industry, only mature firms Profitable industries are those populated by imaginative and profitable firms

Recent statistical evidence does not support the view that the choice of industry is important. The correct choice of strategy appears to be at least five times more important than the correct choice of industry (Terpstra, 1992). The writers claim that there is little difference in the profitability of industries; that it is not industries that mature but the firms in them, and that profitable industries are so because they are inhabited by imaginative and profitable firms. Less than 10% of differences in the profitability of business units can be attributed to choice of industry. While accepting that industry conditions are influenced by economic upswings and downswings, they argue that successful organisations can ride those waves (Auerbach, 1988).

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CONCLUSION
BMW is a story of successful brand that epitomize the definition of multinational corporation. Came from humble roots, building its name and selling the original product in the common home market of Germany, but eventually expanded globally and became one of the most recognized names in the international automobile industry, as well as the top two companies in market share competing in the luxury automobile segment of the market. BMW is currently leading in the global luxury automobile market, but it has been rapidly growing as a company and brand over the last decade or so, and is currently attempting to further improve product offerings to the consumers. BMW, while continuously innovating and releasing revolutionary new automobiles, is also falling behind in the hybrid and electric car market. It has some amazing concept cars and prototypes and claims it is in the preliminary stages of growth in that market, but it will need to begin releasing more electric and hybrid cars very soon in order to keep up with its competitors. Based on the conclusions derived from the research and analysis presented in this report regarding BMWs global business presence and strategies, the following recommendations have been formulated to assist companies looking to compete and succeed in the global marketplace. These recommendations, if followed, should result in greater standards of business in a global society:

Emphasise on innovation, develop and keep up with technology, and never stagnate. It is quintessential to keep environment sustainability in mind and move in a direction of providing a fuel efficient vehicle; however an attempt to produce hybrid or electric vehicle would also be appreciated.

It would be advised to BMW to collaborate with its competitors; this doesnt mean colluding the market but spending and keeping margins according to the industry.

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REFERENCES
Auerbach P, Competition: The Economics of Industrial Change (Basil Blackwell, 1988)

Clyde V. Prestowitz, Trading Places: How We Allowed Japan to Take the Lead, (New York: Basic Books, 1988).

Cravens, D. W., Shipp, S. H., & Cravens, K. S. (1993). Analysis of co-operative inter organizational relationships, strategic alliance formation & strategic alliance electiveness. Journal of Strategic Marketing, 1(1), 5570. De Witt, B and Meyer, R (eds.), 2010 4th Edition, Strategy: Process, Content, Context An International Perspective, Thomson Business Press, London

Dev, C. S., Klein, S., & Fisher, R. A. (1996). A market-based approach for partner selection in marketing alliances. Journal of Travel Research, (summer) 11}17. Hamel, G., Doz, Y. L., & Prahalad, C. K. (1989). Collaborate with your competitorsand win. Harvard Business Review, (JanFeb), 133139.

Kim, W.C.; Mauborgne, R. (2005) Blue Ocean Strategy. Boston: Harvard Business School (HBS) Press. Lorenzoni, G. and Baden-Fuller, C. (1994). Creating a strategic centre to manage a web of partners. California Management Review, 37, 3, 14663. Senge, P, 1990, The fifth Discipline: The Art and Practice of the Learning Organisation, Century Shah GJ, and Garnsey, E, 1994, The acquisition of high technology firms: Evidence form Cambridge, University of Cambridge, Research Papers in Management Studies 1993-1994 No. 7.

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Smith, G and Fleck, V, 1987, Business Strategies in Small High-Technology Companies, Long Range Planning, Vol. 20, No. 2, pp 61 to 68, 1987 Stanworth, J and Gray, C, 1992, Entrepreneurship and education: Action-based research, International Small Business Journal, London, Jan-Mar 1992 Stopford, J. M. et Baden-Fuller, Ch. W. F. (1994), Creating corporate entrepreneurship, Strategic Management Journal, vol. 15, pp. 521-536.

Storey, DJ, 1994, Understanding the Small Business Sector, Routledge, London and New York Teece D, Pisano G and Shuen, A, 1997, Dynamic Capabilities and Strategic Management, Strategic Management Journal, Vol. 18:7, 509-533 (1997) Terpstra, D and Olson, P, 1993, Entrepreneurial start-up and growth: A classification of problems, Entrepreneurship Theory and Practice, Vol. 17, 3, Spring 1993 Westhead, P and Storey, DJ, 1997, Financial Constraints on the growth of high technology small firms in the United Kingdom, Applied Financial Economics, London, Apr 1997

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APPENDIX
APPENDIX 1: SWOT ANALYSIS

Strengths Innovative capabilities, the company is using significant amounts on R&D Good distribution network/channels. Strong Brand and effective marketing by BMW, the strong brand of the company allows it to charge a premium

Weakness Lack of economies of scale as the company Very dependent on the European and American markets Rise in fuel price which can lower the demand of petrol cars

Opportunities Growing global motorcycle manufacturing industry Increasing demand for cars in BRIC nations Focus on the environment and green technology, a continued focus on the environment in the car production

Threats Competition in the global automotive market Currency risks. The threats from uncontrollable interest rates

Source: Marketline, 2012

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APPENDIX 2: UNITED KINGDOM AUTOMOBILE INDUSTRY: HOUSEHOLD EXPENDITURE ON VEHICLES

Source: Office of National Statistics, 2013

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APPENDIX 3: THE COMPETITIVE STATUS OF THE UK AUTOMOTIVE INDUSTRY Prof. Richard ParryJones, University Of Cambridge, 18th April 2013 (Accessed as on
http://www-innovation.jbs.cam.ac.uk/research/downloads/holweg_competitive_status.pdf) The UK auto industry has transformed itself in the last decade from a sector with turbulent labour relations and a poor reputation for quality and productivity to one that is fully competitive. Independent external reliability surveys put UK built cars at the top of the rankings, and productivity and labour relations are among the best in the world. Until the impact of the global financial crisis, the industry was profitable and selfsustaining in Europe and in the UK. Technology and modern management practices have transformed the shop floor environment, and product technology embraces light weight materials, cutting edge design analysis and visualisation tools and the extensive use of integrated electronic systems to extend digital control to most functions of the car. But all is not as rosy as this picture paints, and the UK industry has fragilities and faces significant challenges. The industry has developed a highly integrated industrial system that offers unprecedented value and accessibility to consumers worldwide through efficient logistics, massive scale, global trade, and sophisticated systems integration skills. It is a huge source of technological, industrial and commercial innovation. Many of these innovations have been adopted by sectors outside the industry, following the example of the moving production line, justintime inventory control, total preventative maintenance and lean flexible production methods, The climate change agenda is accelerating technological change at an unprecedented rate, and the industry in Europe and the UK has embraced the CO2 challenge and is investing heavily in people and technology to provide innovative solutions while continuing to offer exciting, safe and satisfying products that people want to buy. I believe that the fundamental starting point for developing policy recommendations for any industry is a fearless and rigorous research and analysis of the key data that helps describe the state of the industry, the underlying dynamics, and the diagnostics that help shape thinking about where we should be trying to go next, and how we are going to get there.

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APPENDIX 4: THE AUTOMOTIVE REGULATORY FRAMEWORK OF THE NEXT 10 YEARS

July 7th 2013, by European Commission Accessed from

http://ec.europa.eu/enterprise/sectors/automotive/documents/consultations/2005-next10/ Issues A wide range of policies affect the European automotive industry, including transport, environment, R&D, taxation, intellectual property, competition and many others. The European Competitiveness Report 2004 stresses that the competitiveness of the automotive industry "depends on a coherent and cost-effective regulatory framework" (Chapter 4, section 4.7, p. 226). In that regard, the report points at a number of challenges to be addressed in the future, in particular its excessive complexity, the need to take into account possible conflicts between regulations, their cumulative impact as well as their external aspects. In order to facilitate the consolidation and analysis of responses, it is advised to structure your contribution around the headings listed below, i.e. competitiveness, road safety, environment and better regulation. Without prejudice to other policy areas, specific chapters on road safety and environmental protection have been identified separately because of the comparative weight of European legislation in these areas affecting motor vehicles. 1. Competitiveness The European Competitiveness report 2004 defines competitiveness in the context of a single industrial sector as "the ability to defend and/or to gain market share in open, international markets by relying on price and/or the quality of goods" (Chapter 4, section 4.3.1, p. 168). Although based on global performance the report concludes that the European industry today is competitive, it warns of the existence of major technological challenges ahead, with competition and innovation continuing to be the main factors of the viability and strength of the industry.

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2. Road Safety Road safety risks are still unacceptably high with the present rate of 46.000 deaths per year in the EU-25, at least 2 million injuries and an economic cost of 200 billion Euro. Road safety improvement is therefore a major societal and economic imperative for the future. 3. Environment Environmental protection is a challenge in all major automotive markets (the US, Japan and the EU). Air pollution is a source of important health and environment problems and climate change is a major threat. Fuel quality and availability are closely linked to this question. 4. Better Regulation While the previous chapters concern the substance of the policies, the question under this heading refers to how to best introduce these policies, to define the best regulatory approach(es). This refers mainly to the regulatory process, the instruments used and the implementation methods.

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