Section 2 Analysis on international business strategies of BMW
II. Rationale behind chosen IBS of BMW
2. Internal factors: The VRIO analysis
a. Value:
BMW has built a strong brand reputation over the years, which has played a significant role in its success and competitive advantage. In 2022, BMW ranked 13 among the most reputable companies in the world with total value around $46,331M, increasing 11% when compared to the figure in the previous year. The car manufacturer beat out many other top companies, such as Facebook and Louis Vuitton thanks to its innovation, consumer confidence and distinction. The brand image creates value by attracting customers who are willing to pay a premium for BMW vehicles. The brand reputation helps differentiate BMW from competitors and contributes to its competitive advantage. Below are some key factors leading to the exceptional brand reputation of BMW
Figure 10: Best brand 2022
Quality and Performance: BMW is known for producing high-quality vehicles with exceptional performance. The brand has a reputation for engineering excellence, precision, and attention to detail. BMW vehicles are often associated with powerful engines, precise
handling, and a thrilling driving experience. The consistent delivery of high-quality products has contributed to the brand's positive reputation.
Luxury and Prestige: BMW is recognized as a luxury brand, offering vehicles that exude sophistication, elegance, and prestige. The brand's commitment to luxurious interiors, premium materials, and advanced features appeals to customers seeking a premium ownership experience. BMW's luxury positioning has helped it attract a loyal customer base and command premium prices.
Innovative Technologies: BMW has a reputation for technological innovation. The company invests heavily in research and development, resulting in advancements in areas such as engine efficiency, safety features, connectivity, and autonomous driving technologies.
BMW's ability to integrate cutting-edge technologies into its vehicles has enhanced its brand reputation as a leader in automotive innovation.
Design and Styling: BMW vehicles are known for their distinctive and appealing designs.
The brand has established a recognizable design language characterized by sleek lines, bold grilles, and dynamic aesthetics. BMW's design philosophy combines elegance with sportiness, resonating with customers who value both aesthetic appeal and performance.
Strong Customer Loyalty: BMW has developed a loyal customer base that identifies with the brand's values, performance, and luxury positioning. The brand's ability to cultivate strong customer relationships through exceptional products and customer service has resulted in a loyal following and positive word-of-mouth recommendation.
b. Rarity
Apart from Value, Rarity plays a crucial role in defining the position of BMW in the autotransport market. Below are some determinants:
Technological Innovation: BMW has a strong focus on technological innovation and has introduced numerous advancements in automotive engineering. This includes efficient engines, lightweight materials, advanced safety features, and connectivity options. The rarity of BMW lies in its ability to consistently develop and integrate cutting-edge technologies into its vehicles, setting it apart from many competitors.
Design Language: BMW has a distinctive design language that is recognized and appreciated by enthusiasts and customers worldwide. The brand's design philosophy combines elegance, sportiness, and a unique aesthetic appeal. The rarity of BMW's design lies in its ability to create vehicles that are instantly recognizable as BMWs, standing out in a crowded market.
Performance and Driving Dynamics: BMW is renowned for its emphasis on delivering an engaging and dynamic driving experience. The brand's vehicles are engineered to provide precise handling, responsive acceleration, and an overall sporty feel. The rarity of BMW's performance lies in its ability to consistently deliver vehicles that offer a balance between comfort and exhilarating driving dynamics.
Luxury Positioning: BMW positions itself as a luxury brand, offering premium vehicles and a refined ownership experience. The rarity of BMW's luxury lies in its ability to create a sense of exclusivity, prestige, and sophistication through its vehicles, materials, craftsmanship, and customer service.
The factors mentioned above contribute to the rarity of BMW and contribute to its overall competitive position in the automotive industry.
c. Inimitability
Technological Expertise: BMW has a strong focus on technological innovation and engineering excellence. The brand invests heavily in research and development to develop advanced technologies, efficient engines, and safety features. The imitability of BMW's
technological expertise lies in the extensive knowledge, expertise, and resources required to match or surpass its technical capabilities.
Intellectual Property: BMW holds numerous patents and intellectual property rights related to its innovations in automotive technology, design, and manufacturing processes. These patents provide legal protection and make it difficult for competitors to replicate BMW's unique features and designs without infringing on intellectual property rights. Protecting intellectual property helps create a barrier to imitation.
Manufacturing and Quality Control: BMW's manufacturing processes and quality control systems contribute to the high-quality standards of its vehicles. The brand has developed efficient and flexible manufacturing capabilities that ensure consistency and precision in production. Replicating BMW's manufacturing and quality control processes would require significant investment, expertise, and attention to detail.
Customer Experience and Dealership Network: BMW places a strong emphasis on providing exceptional customer experiences through its dealerships and service networks.
The brand's commitment to customer satisfaction, personalized services, and brand-specific experiences creates a unique value proposition. Replicating the same level of customer experience and establishing a comparable dealership network would require significant investment, infrastructure, and brand-building efforts.
d. Organization
When analyzing the organizational factors of BMW, we can consider several key aspects that contribute to the effectiveness and efficiency of the company's operations:
Supply Chain Management: BMW has a well-organized supply chain that encompasses sourcing raw materials, components, and subsystems from various suppliers worldwide. The company maintains strong relationships with its suppliers and emphasizes quality, reliability,
and timely delivery. Effective supply chain management ensures a steady flow of inputs for production, reduces costs, and enables BMW to meet customer demands efficiently.
Manufacturing and Production: BMW operates modern and efficient manufacturing facilities globally. The company utilizes advanced technologies, automation, and lean production principles to optimize efficiency, minimize waste, and ensure consistent product quality. BMW's manufacturing capabilities allow for flexible production, enabling it to adapt to changing market demands and produce vehicles tailored to specific markets.
Research and Development: BMW places a strong emphasis on research and development (R&D) to drive innovation and technological advancements. The company invests significant resources in R&D activities, including collaboration with external partners and universities. BMW's organizational structure supports cross-functional collaboration and knowledge sharing, allowing for the development of new technologies and the integration of innovative features into its vehicles.
Marketing and Brand Management: BMW has a well-established marketing and brand management system. The company emphasizes brand consistency, effective communication, and targeted marketing campaigns to reach and engage its target audience. BMW's marketing efforts focus on highlighting the brand's values, performance, and luxury positioning. The organization's marketing strategies help create and maintain brand awareness, strengthen customer loyalty, and support sales growth.
Customer Relationship Management: BMW places importance on building strong customer relationships and delivering exceptional customer experiences. The organization has a comprehensive customer relationship management system that enables personalized interactions, efficient after-sales services, and customer feedback management. BMW's customer-centric approach contributes to customer satisfaction, retention, and positive word- of-mouth referrals.
International Presence and Global Coordination: BMW operates in various international markets and has a global presence. The organization has a global coordination structure that enables effective communication, decision-making, and coordination among its subsidiaries and business units across different countries. This global coordination facilitates the sharing of best practices, knowledge transfer, and efficient utilization of resources.
These organizational factors collectively contribute to BMW's overall competitiveness and operational excellence. The effective management of supply chains, manufacturing processes, R&D, marketing, customer relationships, and global coordination helps BMW maintain its position as a leading automobile manufacturer.