BMW AG: The Digital Car Project (A) Essay examples

1486 Words Jan 14th, 2014 6 Pages
Memorandum
To:
From:
Date:
Re:

Prof. Edward Rogoff
Mr. Partha Mitra
12/11/2012
BMW AG: The Digital Car Project (A)

Case Summary
This case study presents how BMW, a German automobile, motorcycle and engine manufacturing company, is trying to reduce development turnaround time using new technologies. To build new development capability three areas of opportunities are emphasized, managing automotive development including exterior styling; process/organizational changes; and adapting new computer-aided technologies. This strategic move is responsible for BMW historically strategic product positioning in automotive industry in 1990’s.

Most important facts
1>History of BMW – In 1916, Gustav Otto founded Bayerische Motoren
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2.

Market Shift - In 1990’s automotive industry dramatically changed and market shifted from manufacturer to customer.
Development of consumer market was one of the potential challenges BMW faced in this period of time. Consumers wanted to have large number of car choices. As per case study, European car band had 50 car bands, 300 base models, and thousands of configurations. Also over capacity sometimes was creating lower price, for instance European automotive market place producing 20 MM cars where as sales was limited to 14MM.

3.

Open Market – European Market was completely open to foreign competition by 1999 and BMW had to face a tough market competition with world class Japanese, Korean or US car companies. BMW had to accelerate and focus on new model development and increase model variation to keep sales stable.

2

New York University

December 11, 2012

Options for the business or entrepreneur
Strategic Options
Apply current

Comparative Analysis of BMW’s Opportunities in 1990s
Pros
Cons
1. On-time market production which
1. Maximum Process and restructuring

development

leads to competitive advantage for

would be required, especially in

cycle using

BMW to compete with other market

manufacturing or assembly line, lads to

competitors such as Mercedes Benz.

additional pressure of maintenance on

Automating the development

management.

CAD/CAS on
7-Series platform

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