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Eileen Quek

Building & Sustaining Strategy: BMW

Building & Sustaining Strategy:


Bayerische Motoren Werke (BMW) Automotive
Industry
Eileen Quek Cun Hwee
University of Gloucestershire, TMC Academy Singapore
eileenquekch@hotmail.com
Abstract
Despite the continuous period of strong growth and positive global sales gains in
the auto industry, automakers are still faced with high uncertainties of how the
future may influence the industry trends. Automakers now, have to think outside
of the box to attract and retain customers, build market share and increase profit
margins. This article will show you how one of the worlds best-selling luxury
automakers, BMW runs their business operations across regions worldwide.

Keywords: BMW, Automotive Industry, Strategic Goals of BMW, Core


Competencies, Strategic Capabilities, Value Chain Analysis, PESTAL, Stakeholders
INTRODUCTION
BMW is one of the German Big 3 luxury automakers (Ciferri, 2013), along with Audi
and Mercedes-Benz, which are the 3 bestselling luxury automakers in the world. It
produces MINI and Rolls-Royce Motor Cars, and is well-known for offering wide
arrays of automobiles of premium standards and outstanding quality worldwide.
Mission statement refers to the organizations ultimate purpose and keeping
managers focused on what is central to their strategy (Johnson, Scholes, Johnson,
and Whittington, 2011).
The mission statement up to the year 2020 clearly defined: BMW group is the
worlds leading provider of premium products and premium services for individual
mobility (BMW UK Limited, 2013). BMWs mission aims to communicate to
customers that BMWs reputation and quality will become even stronger and continue
to provide top-notch products and services for customers. It reveals BMWs desire to
become the most successful premium automotive firm in the industry.
Vision is the desired future state of an organization, with the aspiration to motivate
the organization members energy and passion (Weber, 2004).
BMWs vision is efficient dynamics vehicle that preview tomorrows driving pleasure
using todays technology (BMW, 2013). Its vision is simple and realistic. BMW offers
unique and premium products which cater to the needs and requirements of its niche
segment. This shows that BMW is willing to take the risk and engage in discovering
hidden opportunities in the business environment along with challenging technology
to create new and innovative products. Its vision will be relevant for a long time as
the choice of words: tomorrows driving pleasure and todays technology depicts
BMWs determination to be always in the move of new innovations.

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Building & Sustaining Strategy: BMW

Both BMWs mission and vision are appropriate, for its survival in the premium
automotive industry, to a relatively large extent. To keep up in the fierce competition
in this industry and grow its market share, BMW will have to constantly come up with
new and innovative products to become worlds number one in terms of reach,
acceptance and revenue.
According to BMW annual report (2012), BMW set its objectives to sell more than 2
million automobiles annually by 2016 and target an increase of 8 to 10% in earnings
before interest and tax margin in automotive segment. These objectives are
expressed in financial terms. The target is very specific as it states the desired sales
levels by a certain time period, to be achieved. It is measureable by the sales figures,
closely relevant to its mission and most importantly, honestly achievable.
Cardy and Leonard (2011) share a list of goals designed by BMW:
Manufacture environmental friendly cars
Stay ahead in the competition
Help the society by being responsible
Increase the sales all across the world
Group-wide environmental protection
These strategic goals of BMW are proven important and will affect the company in
the long run. It takes into concern of various aspects like the environment, society,
business and product, portraying BMW as a corporate social responsible
organization. However, the statements are vague such as it did not specify the time
period of the attainment of goals and are too broad to identify its focus areas such as
group-wide environmental protection.
STAKEHOLDERS
Stakeholders refers to individuals or groups who depend on an organisation to fulfil
their own goals and on whom, in turn, the organisation depends on (Cwmifg, 2012).
A stakeholder universe (Appendix A) shows all the stakeholders of BMW. They can
be categories into internal and external stakeholders (Bmw.co.uk, 2013).

The stakeholder mapping uses power and interest matrix, which helps identify
stakeholder expectations and power and understanding political priorities. This is
essential as it greatly affects the companys final decision.

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Building & Sustaining Strategy: BMW

Adapted: Mendelow (1991) cited in Johnson, Scholes & Whittington, 2009, page 156.
Key stakeholders of BMW: Competitors, customers, key shareholders, partners and
executives.
Customers are the users of the automobiles. Their power to influence the decision of
the company is high as the spending power lies with them. BMW has to constantly
engage with the customers and keep them updated on the latest trend.
Both BMWs mission and vision are customer-oriented, emphasizing on the
consumers of their automobile. They aim to incorporate modern technology with
high-class automobile to create a convenient and pleasant driving experience. They
attempt to portray themselves as a lifestyle icon, but at the same time creating
uniqueness through diversity (Bart, 2010) via constant upgrades and changes to try
and satisfy customers needs alongside with technology advancement.
With BMW as the global luxury leader, Audi and Mercedes have step up various
strategies and efforts to topple BMW. To defend its premium leadership, BMW needs
to monitor its competitors very closely for any new product launch or strategy in order
to respond swiftly. Any new strategy launch by competitors will threaten BMWs
market share, acting as external pressure on BMW to carry out counteract measures.
Key shareholders are investors of BMW, the source of its working capital. Appendix
B depicts the BMW shareholder structure, with the Quandt family identified as the
key investors (Grin, 2012). They hold significant amount of shares, giving them great
power to influence the companys situation with their decisions. BMW have to keep
them satisfied and well-informed via the companys annual financial and investor
relations reports.
BMWs financial objectives exist to satisfy these shareholders. With higher sales
targets and sustainable profit margins in the long run, this increases shareholders
value and BMWs credit rating.
To maintain trust and good relationships with business partners, BMW have to share
information to keep them updated. Partners coordination and support are key factors
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to BMWs success. Executives are the management of BMW who hold authority to
make daily operations decisions, initiate strategies for new business development
and manage the entire company. They have to know all details, trends and on-going
environmental changes which will affect BMWs business performance.
BMW goals attempt to satisfy a bigger group of stakeholders: interest groups and
employees. Being responsible for the environment, society and product, BMW is able
to establish good relations and reputation globally with entities such as the Green
Peace, Road Traffic Safety (Anton, 2008). BMW design their automobiles to reduce
emissions and attain acceptable environmental standards in order to gain support
from various entities, which indirectly boost sales figure. Sustainable management of
the company serves as great confidence for employees, in turn boosting work
attitude and productive efficiency.
BMW tries to strike a balance in satisfying all stakeholders interest but was
unsuccessful. Hence, it has to consider the ones with greatest impact on the
companys future performance. BMW must make decisions, at the cost of other
stakeholders interest, to achieve sustainable growth.
PESTEL Anaylsis
PESTEL stands for political, economic, social, technological, environmental and legal
which describes a framework of macro-environmental factors used to analysis the
impact (Johnson, 2010) on BMW.
Political environment
Europe introduces end-of-life directives whereby car manufacturers have to recycle
vehicle parts like tires and airbags, posing additional recyclability and scraping costs
on BMW. BMW reacted by producing automobiles of at least 85% recyclable and up
to 95% recoverable (Bridwell, 2009). However, the stringent directives still remain as
a threat to BMWs sustainability.
The taxes and government policies are crucial to BMWs success of automobile
demand in the global market. The Singapore government imposes high taxes on
imported vehicles. A BMW 335i convertible costs 5 times more than the same car, in
US, after tax (Aquino, 2011). The implementation of the tax policy has resulted in a
decrease in demand of the niche segment.
Economic environment
As BMW has production facilities located globally, it can spend its revenue in the
same currency. However, with different manufacturing models assigned to each
factory, BMW will not able to match up its revenue with cost. Currently, BMW is
exposed to high currency risk from US dollar, British Pound and Chinese Renminbi.
These account for 65% of BMWs total currency exposure (Automotive-Management,
2011). When BMW settles a deal in foreign currency, an exchange rate hedge is
concluded to eliminate the risk.
The cost of crude oil has a great influence on the price of manufacturing and demand
of automobile; hence a rise in its cost will impact BMW in two negative ways. It is
expected to rise due to increased demand from emerging markets and in response;
BMW develops greener automobiles like hybrid cars.
Since the 2008 financial crisis, economic and business focus have shifted to
developing economies in the Asia region. With rising global market position, these
countries have capital flow surplus and its people now have higher buying power.
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Building & Sustaining Strategy: BMW

Increased wealth lead to rising consciousness of social status and this can benefit
BMW in terms of higher demand. BMW can seize the opportunity to set up more
plants within the Southeast Asia region to enjoy low cost and high demand.
Technological environment
BMW uses technology to gain competitive advantage in the production of engines,
hence winning many glorious engineering awards in the industry.
With rising awareness of global environmental phenomenon, it creates the
opportunities for BMW to explore a new production direction by incorporating green
technology into its business strategy. Having done in-depth research in hybrid
electric cars and hydrogen cars, BMW aims to manufacture the most innovative
product. In the near future, BMW will continue its emphasis on developing new clean
technologies for constant innovation and enhancement of its products.
Environmental
With increasing awareness of global phenomenon, there is a shift in consumers
preferences towards eco-friendly vehicles: hybrid and fuel cell cars. This affects the
change in demand for a different product line and new product directions.
In BMWs existing markets, environmental concern plays an important role of living
up to emission standards and environmental directives. BMW observed the changing
trend of customers preferences and support for green products, and therefore
responded by increasing its focus on manufacturing more fuel-efficient automobiles.
Through this, BMW achieved its lead on the Dow Jones sustainability index (Walsh,
2012) and is working hard to stay ahead of sustainability in creating innovative
solutions.
The PESTEL analysis suggests continuous improvement for BMW. The introduction
of new regulations and tax policies are crucial political factors. Economic factors are
identified as having the most direct effect on BMW profitability. Despite increasing
GDP, the various cost price increase and risk factors still pose as a threat to BMW.
New technologies will contribute to sustainable solutions for greener products.
These factors have both positive and negative outlook on BMW, and therefore BMW
should react on making the possible negative outlooks favourable.
Porters 5 forces framework helps to identify an industrys attractiveness in terms of 5
competitive forces: threat of new entrants, threat of substitutes, power of buyers,
power of suppliers and competitive rivalry. Dorian (2013) states they constitute the
industry profitability by evaluating the relative power each force holds, providing a
comprehensive analysis for effective strategic decision making.
Threat of new entrants: LOW / MODERATE
Distinct brand image
BMW brand is defined by high marketing budgets and high quality inputs, thus is
considered more luxurious and of better quality than other brands like Toyota and
Mazda. With a consistent well-distinct and established brand image since 1975,
customers desire to make a statement with their purchase of a BMW automobile, just
like what BMW marketing ensure: sheer driving pleasure and the ultimate driving
machine. This result in new entrants having to set aside high budget to brand their
products so it is as good as or even better than BMW, to attract customers.
High initial R&D investments

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Building & Sustaining Strategy: BMW

To succeed in the premium automotive industry, the main focus is the continuous
development of automobiles in terms of design, production, quality-management and
technology. New entrants need to set up production factories, offices, showrooms,
which amount to high fixed costs. Substantial capital for R&D investments is required
to achieve an edge in innovations and BMW has already achieved its competitive
edge.
Distribution Network
BMW has a large extensive distribution network spread over more than 150 countries
worldwide (Schmid and Grosche, 2013), distributes via showrooms, independent
dealers, subsidiaries or importers. Over time, BMW gained access and connections
with fixed specialized suppliers to secure their quality requirements. New entrants
must build this network which is very expensive, time-consuming and difficult.
Threat of substitutes: LOW
Other transportation modes
This threat arises from other products which can also perform the basic task of
automobiles: transporting from one point to another. These could include other
modes like the plane, bus, train, bicycle and walking.
Other car manufacturers
Brands like Suzuki and Hyundai, not currently present in the premium segment might
venture into the premium segment to try increase profit margins. These car
manufacturers operate the automobile segment at low prices, competing on the best
prices and their margins are considerably lower than BMW.
New Technologies
The automotive industry is constantly producing increasingly sustainable products,
such as the production of hydrogen powered cars. BMW developed its very own
EfficientDynamics technology (BMW, 2013) to reduce consumption and emissions
while still ensuring sustainable mobility. BMW invested heavily in R&D for new
intelligent innovations for enhance performance and experience. Despite the
presence of Audi and Mercedes, BMW has already achieved an upper hand in this
field.
Bargaining Power of Buyers: MODERATE
Moderate switching cost
BMWs customer base comprises high-income buyers, who are relatively priceinsensitive but expect highest quality deliverance. They purchase BMW automobile
for its quality perceived value, and have very high expectations of its after sales
support service. Although BMWs brand is reputable, there is a possibility of
customers approaching other competitors for similar models if unsatisfied as it does
not involve much cost. Hence, BMW developed a customer relationship management
program to provide extra services to build customer brand loyalty relationship to
minimize customer switching. BMW offer series i3 owners the privilege of borrowing
fuel-powered car from their dealer for longer range vacation travel (BMW Blog, 2013).
Customer Loyalty
According to Abubakrag (2012), BMW achieve the highest rates of customer loyalty
with 65%. With established stable and recognized identities, BMW is able to build a
substantial group of loyal customers who are satisfied with their product and service
within a short span of time. BMW has close customer relations such as long-term
service contracts and excellent loyalty program (Schmidt, 2010). Strong customer

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Building & Sustaining Strategy: BMW

loyalty and relations will help keep this group of major customers to continue
supporting BMW in the long run, indirectly increasing their switching cost.

Bargaining Power of Suppliers: HIGH


Quality Parts
BMW production of automobiles requires high quality inputs which only few suppliers
can meet its requirements. Hence, BMW is highly dependent on these few suppliers
for consistent supply of quality resources and so suppliers now have more power
over BMW as they can decide whether or not to supply BMW the parts.
High Switching Costs to Alternative Suppliers
Upon entering into a supply relation with a supplier, BMW has to thoroughly
investigate its company profiles financial status, reliability and quality of parts. It will
be highly disruptive for BMWs production process to change a different supplier as
BMW will have to re-conduct supplier background investigation and re-build relations.
High level of trust with suppliers result in strong relationships that could lower the
bargaining power of supplier as both BMW and suppliers depend on each other for
business.
Just-in-Time (JIT) Production
BMW uses JIT inventory management, which exposes BMW to risks of disrupted
production due to input shortages. To meet demand and leverage risk associated
with supply dependencies, BMW enter into strategic alliances with industry suppliers
to increase supply chain efficiency. This shows greater dependence of BMW on its
partner suppliers.
Competitive Rivalry: VERY HIGH
Competitor Balance
BMW, Audi and Mercedes-Benz engage in intense cut-throat competition to become
the worlds luxury car leader (Automotive-news, 2013). All 3 have the same target
market and similar positioning. Since 1990s, the title of world luxury car leader has
changed hands from one company to another. BMW just regained the title from Audi,
and has been constantly running its operations at full capacity to keep ahead of the
rest (Marketinomics, 2012).
High Exit Barriers
It is very difficult for a company to exit the premium automobile industry as each
company holds strong long-term commitments to their customers due to the product
life of their automobiles. Customers expect long-term customer service and it is
highly unlikely for a company to simply exit the industry for making small losses each
year and forgone the initial high investments.

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Building & Sustaining Strategy: BMW

In conclusion, the luxury automotive industry is assessed to become more


competitive in the future. This puts pressure on BMW to continually improve in order
to stay ahead of the competition.
In view of possible future changes, the threat of new entrants and substitutes may
both reach a moderate level as they may be new entrants and innovations in the
industry. If the new entrant can successfully establish its name in the industry, it will
become BMWs worthy competitor. In order to maintain or improve current market
share and brand image, incumbents must constantly develop new innovations and
technologies. The success of the other competitors strategies will prove as a threat
of substitute to BMW.
The overall influence of forces predicts a challenging situation for BMW. The most
significant forces are the increasing intensity of competition between rival companies
and uprising potential threat of substitutes which both constantly threatens BMWs
position and market share. BMW strong brand identity and R&D experience are the
key factors to help BMW remain competitive in the future.
Resouced-Based View Strategy
The resource-based view identifies the distinctiveness of BMWs superior
performance and competitive advantage to generate unique creations of product and
service at lower cost which enables it to earn higher profits (Cardy and Leonard,
2009).

Adapted: Johnson, et al (2011), page 87


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Building & Sustaining Strategy: BMW

Strategic capabilities
Strategic capabilities mean an organization having the sufficiency and
appropriateness of expertise and resources to its long-term survival and growth
(Kourdi, 2010).
Engineering Excellence
BMW focus on engineering excellence allied to leading-edge design to drive
successful, profitable expansion. Being the expertise in the field of light-weight
construction, comprehensive energy and heat management inside the vehicle, BMW
introduces new IT options: MP3 connectivity and RSS feeds. With pronounced
performance design, hybrid engine options and high level innovation, BMW restates
its aspiration as a leading premium brand.
Value-added Workforce
The Economic Times (2011) showed BMW asserting its position as the most
attractive German employer. Norbert Reithofer, Chairman of BMW Group
emphasized that employees are their most important success factor. BMW believe
that motivated, dedicated employees and young talents contribute to its success.
Kolfer (2011) reported the increase in number of apprentices in Germany by 10% in
2011, reaching 4,266 apprentices by end of 2012. They invested more than 280
million in professional training to provide their employees with the required
qualifications. A well-coordinated system of talented employees is adopted to ensure
BMWs competitiveness.
Brand Management
The BMW brand represents sporty, performance oriented automobiles of high level
craftsmanship and ingenuity. Under the slogan: The ultimate driving machine, BMW
has consistently delivered the same message and brand promise for the last 40
years and has thus, established a strong brand identity. BMWs brand name proves
to be a tangible resource while its reputation is intangible. The key to BMWs success
is consistency and authenticity of their marketing strategies and policies. BMW
automobile owners are very particular about the image of the brands they use.
Core competencies
Hoskisson, Irelland and Hitt (2004) refer core competencies as crown jewels of a
company, and activities an organization performs especially well compared with
competitors and through which, the company adds unique value to its product and
services over a long period of time.
Customer-focus
BMW seek new avenues of value-added processes to meet customers requirement
and keeps itself updated of new trending customers preferences. It allow customers
to order cars exactly the way they want and promises delivery between 2 to 6 weeks,
even providing customers a video of their car being born. Custom-building of cars
allows BMW to take slack out of the production process, reduce inventory costs for
dealers and avoid hefty rebates on cars that are not selling. This improves customer
loyalty as customers are now more satisfied with their purchase. Custom-made cars
are often loaded up with more options, meaning higher profit margins. This gives
BMW a competitive advantage over Audi and Mercedes, as they believe more than
40% of their buyers will do so by 2015 (Megan, 2013).
Innovation
R&D technological expenditure for 2012 rose by 17.2% to 3,952 million, aim to propel
BMW innovation leadership (Cioban, 2013). Technology is central to BMWs strategic
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Building & Sustaining Strategy: BMW

decisions for sustainability and profitability. With technology, BMWs strategy


initiatives include: reduced emissions, lightweight construction, engine efficiency,
drivers online assistance and in-car entertainment features. BMWs leadership and
capability in technology and innovation took off since 1917, developing its engine to
become one of the core competences. Since 1990, BMW has reduced the average
fuel consumption and emissions of automobiles sold by nearly 30% (Goschel, 2005).
In all, it help creates BMWs competitive advantage in terms of high product quality
and performance, and providing luxurious driving experience for customers.
Supply Chain Management
BMWs global supplier network has more than 12,000 suppliers in 70 countries. To
establish sustainability with all the suppliers throughout the supplier network, BMW
refined over three-step risk management process in 2012 (Appendix C). It constantly
implements supporting measures for employees and suppliers to guarantee
continuous improvement and sustainability throughout the entire global network. In
addition to BMW own measures and process, it collaborate with suppliers to
introduce new measures and structures to consistently push for more sustainability in
the supply chain. Such measures include the annual supplier innovation award to
complement a competition on ideas for BMWs products and processes to enhance
resource and cost efficiency (BMW, 2013).
One of BMWs biggest and longest competitors is General Motors Company (GM).
GM is the worlds largest auto manufacturer and has been the annual global industry
sales leader for 77 years (Wojdyla, 2009). GM has a strong brand portfolio and the
power to set the industry standards. It has a global market coverage and share of
11.4% in 2013. With operations in more than 50 countries, it owns a wide diversity of
reputable brands ranging from Chevrolet to GMC to Cadillac.
Technology and innovation
Driven by the vision of future transportation, GM uses technology to create products
to change the lives of their customers. Introducing semi-autonomous driving vehicles
(GM, 2013) incorporated with active safety technologies with the aim to reduce
accidents and increase independence, GM believes this capability will make
customers driving experience easier and more enjoyable.
Environmentally-friendly design strategy
GM focuses on producing vehicles with emission-free driving: full electric vehicles
and hydrogen fuel cell. It has several technological alliances with companies like
Toyota and Honda. GM and Honda will co-develop the next generation fuel cell
system and hydrogen storage technologies. This will aid GM to accelerate the market
penetration of this new clean mobility technology.
Customer-focus orientation
The new CEO, Dan Akerson initiates a new direction: GM is free to design cars that
appeal directly to customers (Gregburns, 2011). GM aims to introduce new models
faster, to build cars which people will want to buy and not cars that the company
needs to sell.
It is very clear-cut that technologies for new innovations are these companies
essential core competencies. Both companies placed heavy emphasis and
investments in the R&D segment to seek new breakthroughs and out-beat one
another. They align strategies with customers requirements to boost sales and
image. With increasing global awareness of environment protection, both companies
react by incorporating the environmental-friendly concept into their process and
products. This move will portray their image as a social responsible organization, an
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encouraging factor for customers to continue supporting them. These have become
the core focus for improvements and larger market share in the luxury automotive
industry.
VRIN Framework
The VRIN framework is an internal analysis procedure which specializes in
evaluating the future outcome on competitive advantage of a firms current resources
and capabilities (Klein, 2012).

The VRIN framework identifies and evaluates BMWs resources, and the above table
shows that BMW has attained sustainable competitive advantage in the premium
automotive industry in terms of its reputable brand portfolio, innovative technological
and design capabilities and patent license of its outstanding engine design. BMWs
brand portfolio is highly recognized and unique. It is very difficult for others to
duplicate and substitute this valuable and rare resource even with large capital and
different resources and capabilities. BMWs technological capabilities help develop
highly-efficient engines which increase vehicle performance but reduce fuel
consumption and emission. By producing value-added automobiles, BMW
successfully delivers to customers requirements. They own these new technologies,
developed by their very own R&D expertise. Applying for a patent for such
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Building & Sustaining Strategy: BMW

technology helps BMW to eliminate the risk of substitution and imitability, allowing
these essential core competences to create long-term competitive advantage for
BMWs business performance.
The value chain concept developed by Michael E Porter (Appendix D) provides a
systematic means of categorizing activities and functions of an organization,
illustrating the creation of value for customers. It helps the company to determine
which activities create value and which do not. When the value chain is capable of
creating additional value at no additional cost, a competitive advantage is realized
(Maguire, 2011).

Adapted: Johnson, et al (2011), page 98.


BMW using their capabilities and competences effectively
In BMW, they see employees as a very important factor to the companys overall
success. To encourage a sharing and learning working environment, BMW organize
various activities and trainings. Consumer concerns about quality are significant;
hence BMW takes several efforts and measure to boost the employees confidence
as their working attitude strongly affects their work capacity and production efficiency
and quality.
R&D allows BMW to produce vehicles of higher quality and affluence with unique
customization and consistently delivers the latest technological features. Sarieddine
(2013) mention BMW carry low inventory and design 300 work-time models and
flexible facilities, successfully delivering on its 10-day order-to-delivery goal. BMWs
collaboration with Sprint helps connect and coordinate all operation units smoothly
and quickly. This greatly reduces operational costs and provides BMW the flexibility
to move production to take advantage of economies of scale.
Procurement helps BMW to effectively manage its plans for innovative products and
design. BMW developed a Management of Partner Networks (IMA, 2006), focused
on innovation. By establishing partnerships with successful companies such as Apple
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and Sirius, it provides BMW the differentiating factor from the rest. It can incorporate
other companies well-received products into its new automobile series. This allows
BMW to offer full customization for customers, which fits its niche market target.
Cost drivers help BMW stay profitable while serving the niche target market. BMWs
ability to produce multiple vehicles in one facility, shares assets across geographical
locations reduces costs of production. R&D and production improvements are
implemented across region by region to cover the costs of these investments slowly.
This shows BMWs capability to stay ahead of its competitors in terms of strategic
flexible planning and outstanding technological edge.
How can BMWs position improve?
Brand Identity
BMW needs to continue focusing on its differentiation focus strategy in the premium
segment to maintain its prestige brand identity and momentum through engaging and
communicating with consumers. BMW can invest in market research and
understanding consumer preference and behaviors, which will factor into new types
of models, products and service offered. Educating consumers on the benefits of
sustainable vehicles can help improve BMWs brand value.
Structure
BMW should continue to develop its business model through new types of
partnerships and collaborations. This include industry collaboration on electricity
network, cyber security and communications which share technology and innovations
for producing small engines based on low emission technologies. Increasing
interaction with government and regulators on high capital investment projects will
help BMW receive governments subsidies and incentives.
Talent Management
BMWs employees are the most valuable asset for the company and social workforce
diversity is a key factor for future success to ensure future competitiveness. This can
be accomplished with investment in training targeting right skills and mindsets of key
managers and future leaders in order to effectively manage the change toward a
sustainable automotive industry. Another strategy is to attract new highly-qualified
talents to the company, to help transfer knowledge and continue innovating vehicles
and new production methods.

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Appendix A

Appendix B

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Appendix C

Appendix D

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