The management of all value-based activities has proved a difficult task for a single organization especially if the activities cover the design of the product right its final delivery to the consumer. 5 BMW Features and Benefits that Make a Difference By PPSL / Cars / Jun 09, 2016. Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of AUEssays.com. Because BMW and its competitors fall into the exclusive car range, high bargaining power of buyers results from the fact that consumers can choose a product on the basis of price and therefore make the purchase thereof (Copper, 2008). Economic factors for the automobile industry are. Primarily, the cost ownership and product excellence together identify the brand of a product. ), Social factors include cultural and demographic changes in the global market especially on the effect on consumer’s buying behavior and capacity. Capabilities are things that organizations develop with time. In terms of identifying the key resources and capabilities of BMW, tangible and intangible assets as well as human resources are present in the case study. Cost efficiency at BMW is possible by the contributions of economies of scale, supply chain, experience and product/process design (Gerry, Scholes & Whittington, 2008). This drift occurs when a company’s challenge from environmental changes negatively affect its operations, despite the occasional incremental development from cultural and historical factors. In this industry, high bargaining power of suppliers is due to the fact that suppliers can dictate the cost of raw materials. It has to be noted that BMW competitive advantage is challenging to sustain in the long-term perspective because sustainability of competitive advantage depends on the ability of the company to introduce innovative products, features and capabilities on a regular manner. Financial resources which in 2003 financial year were, turnover of 41.53 billion euro, gross margins of 3.2 billion, 7.4% profit margins and annual surplus of 3.2 billion euro. A quick Resource audit and capabilities analysis would suggest that following are the key resources and capabilities those BMW posses which it can use to its advantage: Brand Value and Perception: BMW has an incredible brand value as a premium luxury brand. SWOT analysis combines the strengths and weaknesses internally, i.e. They can be explained as: A) Resources can be divided into: 1. The significance of resource analysis in strategy formulation #3. Many BMW drivers can testify to the fact that their BMW cars comes with a variety of convenient and sleek features. Importance of Resources and Capabilities. In addition, the report will also include an analysis of the company 's assets and capabilities that have provided it a sustainable competitive edge as well as, the recommended future strategy of the giant online organization. Key Resources is the building block describing the most important assets needed to make a business model work. The third critical success factor is experience for BMW in the automobile industry. A 1929 BMW ad depicts the BMW emblem, complete with the four colored quadrants, in a spinning airplane propeller. In the automobile industry, there is minimal threat of new entrants because huge capital cost goes into the setup of manufacturing plants and assembly liners. Threat of new entrants reflects the inhibiting forces faced while entering into the industry. Examples include, Benefiting from competitive advantage due to increase in the use of technology. Organisations often lack the necessary capability to implement the strategic plans, they envision. Ever since the company was founded, innovation has been one of the main success factors for the BMW Group. The acquisition of the English brand Rover was due to the adoption of the path way and the company’s need for increased production and the consequential consolidation thereof; a necessary strategic drift. Key resources are the talent and capital that are required to execute a strategy or plan. This project is based on the BMW Company and will take the reader through the basic business concepts and strategies that the company takes to be in the existing market and compete with the other renowned brand. There are also examples of cases of collaboration, both formal, BMW’s organisational culture may be a key fact, Organisational culture is an informal institutional aspect that is an intangible, socially complex resource. Copyright © 2003 - 2020 - AUEssays is a trading name of All Answers Ltd, a company registered in England and Wales. Disclaimer: This work has been submitted by a university student. Figure 3. from own product or market audit; and opportunities and threats externally, i.e. KEY RESOURCES Key resources are the main inputs that your company uses to create its … Key Elements of Business Strategies: Understanding Resources, Capabilities, and Competencies is the key Selecting a business strategy that exploits valuable resources and distinctive competencies (ie. The report covers the firm’s internal and external environmental challenges; analysis of its ability to succeed and the likely reasons that will challenge the firm in future. The full Board of Management of the BMW Group established a commitment to diversity as part of the company’s human resources and sustainability strategy back in 2010. These are often identified as part of strategic planning exercises such as business model canvas. The following are illustrative examples of key resources. The company to focus on in the paper is BMW which has had the tremendous impact on people with regard to movement…. You can spend money and immediately acquire a resource. The report will also gives the reader a chance to know the strategies of an automobile industry and will take the reader through the internal and external environment of the automobile sector. VAT Registration No: 842417633. BMW should focus on hybrid and electric vehicles as the future technology powering its vehicles. Intellectual capital represented by the excellent reputation in engineering, powerful brand identity known for its reliability and luxury. This report had been broken down into several different categories to make it easy for the reader to understand. This case study is about BMW group, which a renowned European carmaker is aiming to maintain excellent quality, increasing output and manufacturing smaller cars. KEY RESOURCES BMW is because of the talented people who work there. In UK for instance, an 80% excess capacity in 2003 froze 1.3 billion euro in the automobile industry. Autonomous driving. Unlike the implications of the five forces, industry life cycle is composed of the development stage, growth stage, shake-out stage, maturity stage and the decline stage. The many years it has been in the industry has enabled it to establish a brand identity for its products in addition to the integrated and advanced supply chain that ensures delivery of the products at the right time in the right place. BMW also had produced an impressive 1.1 million cars in fiscal year 2003 (Gerry Johnson, Kevin Scholes, Richard Whittington, 2008), thus demoing economies to scale to gel with its manufacturing units worldwide. A quick Resource audit and capabilities analysis would suggest that following are the key resources and capabilities those BMW posses which it can use to its advantage (Verbeke, 2013): Brand Value and Perception: BMW has an incredible brand value as a premium luxury brand. By the help of Technological it helps company (BMW) in various ways like adoption of new and improved design to counter the low profits in the industry, Regulatory and restrictive measures on technology that are linked with environmental pollution (Allen, 2006), Environmental factors within the auto industry are, Environmental factors differ on various reasons like change in consumer tastes and preferences towards eco-friendly cars, fuel cell cars and hybrid cars, Contribute to the widespread awareness of greenhouse effect, global warming and burnout among patrons, Legal factors in the auto industry include, Strict pollutions standards and restrictions applicable in the US and European markets, Stern consequences on of the EURO norms in the developing countries i.e in India (CEN, 2006), Porter’s Five Forces is a framework for the development of business strategy and industry analysis. According to the value chain criteria, the product ranges are priced differently and differently designed to serve the needs of a specific segment according to the target market. The plan emphasizes that BMW should concentrate on premium mobility, which is further divided into 3 goals: E-mobility. Customers who buy BMW products don’t just buy the product. For example, a book is a resource because you can immediately purchase it. The firm’s own value chain results from the reciprocation of the finished product back to the suppliers. Success of a business in the global market is determined by the probable foreign policies (Hill, 2008). environmental analysis. The BMW Group relies on a diverse workforce to enhance the company’s performance capabilities and innovation and secure its … Free resources to assist you with your university studies! According to the value network of shown, it is Evident that each of BMWs assembly locations and manufacturing unit is independent of the other. BMW had the capability to swing its operations for 60 hours a week during limp demand and whooping 140 hours a week when the demand is at its peak. Do you have a 2:1 degree or higher? First, consider identifying core, functional activities that BMW perform. From the above diagram, BMW’s critical success factors (y-axis) are: Product cost that determines the quality of the product. cars, capabilities to meet regulatory requirements in terms of manufacturing new energy cars, capabilities in developing autonomous driving vehicle systems, and capabilities to envision new, In terms of the strategy process, being able to implement a planned strategy is a very important, capability. Tangible resources are primarily plants, the production facilities in Leipzig, Spartanburg and Shenyang. The company has a clear vision of how to transition to autonomous cars. Therefore, BMWs channel value chain of price, location and design is the backbone of the consumer value chain (Radinger, &Schick, 1996). When in the industry, new entrants require more time to be recognized and reputation in the minds of consumers. The use of advanced technology by BMW in products enabled design, quality and price to the prospective consumers. Therefore, there needs to be a reduction of costs with the annual increase in units produced from the newly established assembly units in the competitive market. In this case study, BMW is seen in the maturity stage of the industry life cycle. Additionally, it can be adopted to gain competitive advantage coupled with marketing intelligence to outcompete its rival. In the automobile industry, the likely factors include. Reference this. Similarly, there exists an internal value chain of the assembly liners amidst themselves. The laws and regulations that had affected the automobile industry touched on the environmental practices that were expected of any car industry. resources & competences and how these relate to the strategies & organizations " Opportunities / Threats ? The online scanning system matches your work against over 5 Billion online sources within seconds. To export a reference to this article please select a referencing stye below: If you are the original writer of this essay and no longer wish to have your work published on the UKDiss.com website then please: Study for free with our range of university lectures! Firstly, product quality is an unavoidable and a unique factor that is vital as far as consumer satisfaction is concerned. A good and easy-to-remember way to distinguish resources and capabilities is this: resources refer to what an organization owns , capabilities refer to what the organization can do ( Figure 4.2 "Resources and Capabilities" ). Tangible resources are primarily plants – here, the production facilities in Leipzig, Spartanburg and Shenyang. Key stakeholders of BMW: Competitors, customers, key shareholders, partners and executives. With its sophisticated supply chain management system, BMW has a long relationship with suppliers. BMW Group Report contains more detailed discussion of BMW business strategy. Therefore, the available option for BMW is to compete through its competitive advantages and core competencies. 1st Jun 2017 A good and easy-to-remember way to distinguish resources and capabilities is this: resources refer to what an organization owns, capabilities refer to what the organization can do (Table 4.2 “Resources and Capabilities”). Developing Your Resources and Capabilities into Competitive Advantages 4.1 Identify the key resources and capabilities 4.2 Leverage transferability 4.3 Replicability #5. Resources and capabilities empower a company to drive the business and face competition with their products & offerings for the need of customers. A physical server is a resource because you can buy one and have it shipped to you. Therefore, BMW has a high threat of substitutes. All of these resources enable a company to attain a sustainable competitive advantage (Dess et al, 2010). Resources and organizational capabilities play an important role in business. The interpretation that the BMW logo represents a propeller has endured ever since. Foreign government policies and tax laws also affect the automobile industry. This preview shows page 5 - 7 out of 16 pages. As a renowned company, BMW has a high position as far as its brand and gratitude factor are concerned. Human resources composing of young and wealthy professionals supported by a highly qualified labor force, Threshold competencies represented by good relationships with the suppliers, inevitable quality, reliability and dealings, Core competencies known for its speedy production and technology that are the ultimate driving machines for BMW, Threshold resources of integrated supply chain, worldwide production and assembly units supported by young and astute employees, Unique resources of high quality labor force and excellence in engineering. Technological factor plays very important role in organization because it helps various fields like controlling cost, manufacturing speed of cars. As one of the cost drivers, product design can be directed to ensure maximization of working capital, labor productivity and better yield. The classic and contemporary models, concept and tools used in business strategy and panning include PESTEL analysis, Value chain analysis, SWOT analysis, Porter’s Five Forces, industry life cycle and Cycle of competition. According to the cycle of competition concept, competitive advantages or core competencies are temporary in nature; such as BMWs closest competitor Toyota Group. This channel value chain is structured on the basis of design, location and price; such the products available for its customers vary from a “Mini” to a “Rolls Royce”. The price variations in the products also depend on the locations that BMW is focusing at. According to the 2015 analysis of The Hackett Group’s HR benchmarking database, it revealed the hallmarks of current world-class HR organizations and the critical capabilities they leverage to achieve superior results. Their power to influence the decision of the company is high as the spending power lies with them. In order to identify BMW Group’s internal strengths and weakness, here applied strategic capability which combined three keys of resource: tangible resources, intangible resources, and competences. This means functional capabilities that come together in a. For a major brand to retain its leading position, it is essential to win consumers’ trust. Efficiency in the process can only be achieved using the help of a value network; which is usually a combination of inter-organizational process that are vital in the manufacturer of a product or a service (Timmers, 2008). Key resources can be physical, financial, intellectual, or human. In order to manage its supply costs, BMW set up different locations in the global market such as China, Germany, UK, USA and South Africa with a human workforce of 104000. In summary, BMW’s key success factors are BMW’s business model, Sustainability, technology, brand image, and CEO of BMW, Helmut Panke. Toyota’s valuable assets including technology, product range, profit margins and production capacity pose a threat for BMW as Toyota has become proved product in the immature market territory (Kiley, 2004). 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. BMW a German company which started in the year 1910 in the city of Munich which then manufactures the air engines, which after the world war 1 was forced to stop the manufacture of aircraft engines then moved into motorbikes and slowly grown into the automobile sector and had become one of the world renowned brands. With a status as the number one brand, BMW’s quality is therefore the most critical success factors. BMW has Efficient Dynamics and the Agile Manufacturing System. Economic factors entail global economic growth, international exchange rates and business status in a given industry. Every business model requires them, and it is only through them that companies generate Value Propositions and Revenues. Examples in the case-study include operating in, over 150 countries, employing 129 932 people and network sales via BMW, MINI and Rolls-, Dynamic capabilities. BMW is an acronym for Bayerische Motoren Werke AG — or, in English, Bavarian Motor Works. Competitive advantage should also be generated through experience with the holistic understanding by the firm and its unit costs. Supply costs in an organization play a vital role especially in the production and purchase of raw materials. When it outcompeted its rivals BMW emphasized on brand development that had resulted from changes in the market. • Analyze how strategic capabilities might provide sustainable competitive advantage (VRIN) " where / how to build a resource-based competitive advantage ? Global operational and production capabilities. Some of the hallmarks of world-class HR organisations are as stated below. Fourthly, stagnating growth with high barriers to entry, increased competition with less unit costs and higher market share are the features of the maturity stage. Registered Data Controller No: Z1821391. In terms of identifying the key resources and capabilities of BMW tangible and, 2 out of 2 people found this document helpful, In terms of identifying the key resources and capabilities of BMW, tangible and intangible assets as, well as human resources are present in the case study. In combination with Porter’s Five Forces, drivers of change, which are likely to have a high impact on strategy, are identified. The paper "Assessment Of Resource Capabilities Of BMW" focuses on concerning the incorporation and understanding of value chain in the given setting and business environment. • Diagnose strategic capabilities by means of benchmarking, value Examples of intangible resources include a portfolio of brands positioned as global premium brands. Capabilities What the organization can do based on the resources it possesses. robot co-working and additive manufacturing. The most common resources include Tangible resources which include the physical chattel such as the plant, finance and human labor within the organizations Intangible resources includes the non-physical chattel such as information, knowledge and status BMW’s resources are categorized into Improvement in the use of technology and preference of design as a fundamental asset. Viper is a quick and easy way to check your work for plagiarism. Employees of BMW and visionaries are thinking about how BMW can innovate to stay ahead of the trends and the client wishes. Poor performance of the Euro decreasing exchange rate has greatly affected car makers in Europe, Global increase in GDP from 2.0% to 3.1% in 2008 and consequential economic downturn in the US market in 2008, Emergence of developing economic states like China and India’s excess capital and buying power regionally and globally (Autofacts, 2004). In the industry, there is cut throat competition, as most of the products positioned in a similar way target same market. Company Registration No: 4964706. Resources and Competences Strategic capabilities have a significant impact on an organization’s long-term survival or competitive advantages in the market (Johnson et al., 2014), therefore this report focuses on the strategic capabilities of Amazon based on the perspective of a strategic resource … Examples include research and development that spans a, network of thirteen locations in five countries, collaborating with leading technology, organisations to deliver fully autonomous vehicles by 2021, digitisation of operations, human. Tangible technological resources, that BMW possesses are newly invented technologies that may add value to future urban mobility, here, such human resources include know-how that BMW, possesses, collaboration with other organisations and its organisational culture. Also affect the industry in general capabilities by means of benchmarking, value capabilities What the organization do! 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