For added help I have enclosed my class notes to help create the pp slides.
APA format, and plag checker.
Slide 1: Provide an overview of BMW including history, including why BMW is a good (global)company.
slide 2: National Differences in Political Economy and Economic Development at BMW
slide 3: Differences in Culture and Ethics in International Business
slide 4: International entry strategies, Outsourcing, and Logistics used at BMW
Slide 1 : Introduction
Bayerische Motoren Werke AG, commonly known as Bavarian Motor Works, BMW or BMW AG, is a German automobile, motorcycle and engine manufacturing company founded in 1916 (www.bmwartcarcollection.com). BMW most commonly known for their luxurious cars was not always what we know of it today. Did you know that BMW first started out as an airplane company struggling to make ends meet? In order to prove that their engineering was the best the world had to offer they decided to produce luxurious automobiles. Since its incorporation over the last ten decades, BMW has transitioned from a struggling airplane engine manufacturing to be the most highly admired luxury vehicles throughout the world. According to Madden, Roth, & Dillon, (2012), despite being subjected to the darkest times in the European history, the company still re-emerged as a stable and strong representative of high-quality German engineering and design. Therefore, the following paper provides an assessment of the ethical issues in the history of BMW, explains its code of ethics, and commitment to social responsibility as follows.
Firstly, BMW has often stood for passion, pleasure, and sustainable mobility solutions that are forward looking across the world. As affirmed by Gazzola, (2014), enthusiasm has driven the company to make unique visions, and ideas a reality for both its employees and customers. As a result, by recognizing exciting opportunities, BMW offers exciting careers. For example, it has always provided a motivating and an inspiring working environment. In addition, apart from offering competitive compensation packages, it appreciates every worker with several benefits such as paid leave. Regardless of whether one is a professional or school dropout, graduate or student, Gazzola explains that BMW has always created chances for individuals with strong passion to help reinvent the future’s mobility.
Fair work environment and conditions and respect for human rights form an integral part of BMW’s culture. As such, the company has always represented the interests of its workers and BMW Works Council takes human rights as their primary mission. BMW offers exciting careers. For example, it has always provided a motivating and an inspiring working environment. In addition, apart from offering competitive compensation packages, it appreciates every worker with several benefits such as paid leave. Fair work environment and conditions and respect for human rights form an integral part of BMW’s culture. As such, the company has always represented the interests of its workers and BMW Works Council takes human rights as their primary mission. As we are already aware, BMW is known worldwide to be a stronghold, successful company that has always delivered absolute satisfaction to their clients and employees thanks to their strong work ethics. It couldn’t have been accomplished if it wasn’t for the dedicated workers, loyal clients, and the highly organized structure that the company performs under. For decades, BMW has grown and adapted to become a world class organization that many have praised for their wonderful dedication. The organization deeply values the passions of their individual employees and takes teamwork to the next level. BMW operates under a strong, rich culture which ensures the opportunity for talented individuals to succeed and how the industry enhances its cultural foundations. And for many decades, the company has been credited for being a successful firm that has been built within a strong structure and gifted employees, thus ensuring customer satisfaction is met and promises growth for more in the future.
Slide 2: National Differences in Political and Economic Development at BMW,
Political instability affects BMW in a few ways. First being that BMW has investments with countries with political instability which could end badly for BMW by putting the company at risk. BMW has also allocated their funds to influence political factors in favor of the company. One instance was when BMW slowed down European motives to increase fuel efficiency in cars by putting a stricter limit on carbon emissions. BMW’s legal system abides by a host of copyright laws related to its vehicles, as well as the technology incorporated, including Wi-Fi and Bluetooth. BMW has a huge influence on culture in the region. The corporation has about 100 projects worldwide. They have made a cultural commitment standing as part of corporate communications for over 40 years.
One of the cultural activities that BMW offers to the country is the Rolls-Royce Art Program. This program is a celebration of new contemporary art. They invite leading artists as well as new to create works of art that push the limits of what is possible. Another activity that BMW provides for the community is the Opera for all. Opera for all is a collaboration BMW does with the Bavarian State Opera. This Opera has been held every year since 1997 and is open to everyone and allows people to win numerous awards.
Product Safety is of utmost importance to BMW. BMW wants their products to not only be environmentally friendly but conserve as fewest resources as possible to complete aa project. The use of computer technologies helps to reduce development time with computer technologies helps to reduce development time with computers that help in designing, testing, and simulations offering accurate results as well as virtual examinations. With these computer-based technologies it dramatically cuts production and development times and costs. All while this process enables BMW to respond faster to customer needs and preferences in the future.
In 2017 BMW was the country’s No.1 exporter of luxury automobiles. BMW produced roughly about 272,346 models of cars. There are no disadvantages that affect the U.S. dealing with the BMW but there are many advantages that Europe provides to the United States. One advantage that BMW provides is of course luxury cars. The second advantage is the BMW plant located in South Carolina. This plant is adding jobs for many locals as well as residents from surrounding counties. It should be no surprise that this multinational company has had great success with each passing decade. The work culture of the company is ensuring that the employees are able to offer quality services to the customers. It is as a result of the work culture whereby the market share has been increased hence making it easy for the business to operate in the best way possible. The work culture of the company is again brought about by the ability of the management of the company to analyze the performance of the business in an effective manner. For the work culture to be enhanced, the company has in different cases subjected the employees to a training which enables them to remain controlled by the improved technology in the country. The political economy of the country has played significant roles in ensuring that the sales made in the company are improved. This is due to the fact that favorable environments are provided for the company to carry out the production of quality products which help in ensuring that the needs of the customers are addressed in the best way possible. On the other hand, the global branding and the supply chain management of the company are carried out in a way which ensures that the customers from different parts of the world are provided with quality vehicles. The global branding has been unique for the purposes of ensuring that the customers in the market are able to benefit from the vehicles manufactured in the company.
Slide 3: Differences in Culture and Ethics in International Business
Recognizing and adhering to environmental measures, BMW Company has had a long tradition of reducing its adverse impact on the environment. For since, in 1973, the company emerged as the first automobile company to appoint its environmental officer throughout the world. Therefore, it takes environmental factors into account in different locations with the goal of minimizing pollution by avoiding wastes and lowering emissions. Lastly, the company has been linked with several corruption cases almost every year. For instance, it involved some board members who have been accused of being bribed with offers such as free Viagra. According to Folkens, & Schneider, (2019), one of the recent estimations by an economist indicated that about $50 billion bribe exchanged hands in almost every year within the company. BMW’s board of directors established the code of ethics that was intended to provide guidance to every stakeholder as they performed their duties and obligations.
Germany’s governmental trade policy is currently in a financial crisis. German car makers gathered in Washington D.C. in 2008 to discuss and stop potential tariffs that were put on the import of luxurious automobiles. German car manufacturers are the United States largest exporter for vehicles but what many people may not know is that BMW makes many of their vehicles in US plants. One of those very plants is in Spartanburg, South Carolina. The trade policies that President Donald trump has tried to implement also target Chinese imports which could potentially cause a trade war that could threaten their economy and the world as we know it today. Mercantilism is basically a system that a country does more exports than they do imports for their country. In this case Germany is the same way because they do more exports than they do imports because they are the largest importers of luxury automobiles for the United States. Free Trade is preferred over mercantilism by businesses because people benefit from affordable goods versus how in mercantilism brings many restrictions on the imports and limited choices for consumers in turn means higher prices and less competition. The product life cycle is defined as a cycle in which a product is developed and all the stages in between. The product life cycle is broken down into four stages they are: introduction, growth, maturity, and decline. The first phase in the product life cycle is the introduction phase. This phase normally starts with an idea of a vehicle BMW wants to create and wants to market and advertise to make people aware of their product as well as the product’s features. Second is BMW’s growth phase. In this phase demand grows for the product. Which then increases the production of that specific vehicle and then lastly making it available to consumers across the United States.
The third phase in the product life cycle is maturity. When BMW’s vehicle matures its in its most profitable stage. In the maturity stage production costs as well as marketing decline this is also when other foreign carmakers will try and compete with BMW’s new vehicle by offering some of the very same features to compare with BMW. This is also the stage where BMW’s market share may be lost, and the product takes a decline. The new trade theory determines international patterns of trade and are critical when it comes to economies of scale and how the network effects occurs in key industries.
In the new trade theory is described as when two countries that have no discernible differences in opportunity cost at any specific point in time. But, if one country specializes in a certain industry then it may gain economies of scale and other network benefits from its specialization (www.investopedia.com). This goes for the same with Germany and the United States because Germany specializes in making foreign vehicles whereas the United States is in the gain economies of the scale. Porter’s diamond of national advantage is defined as a model that is designed to help understand the competitive advantage that a nation or a specific group possesses due to certain factors. The porter’s diamond of national advantage explains how the government can improve position of a country and its competitive economic environment. BMW shows how they drive the competitive market over other foreign carmakers by constantly producing new vehicles and innovating new technology making them the forefront of German engineering.
slide 4: International entry strategies, Outsourcing, and Logistics used at BMW
The transitional strategy is the act of constantly maintaining a low cost through location economics, economies of scale and learning effects. This strategy also believes in making products different from other geographic markets that account for local differences. In doing this the product can respond to local demands in different markets geographically in order to raise costs. While location economies and experience effects and leveraging products internationally they also transfer core competencies and skills within the company.
In doing this the company must pay very close attention to the pressure of the locals in the economy. Also stated in our text was modern multinational enterprise, core competencies, as well skills that do not only reside just in the home country but can develop in any of the firm’s worldwide operations. In this strategy it is important that they maintain that the flow of skills and product offerings not only their home country but a foreign subsidiary as well.
BMW uses the localization strategy by trying to boost more sales in China. The localization strategy BMW has adopted greatly will greatly benefit in China because of the local production as well as innovative talent in the country. In doing this BMW plans to introduce two new models exclusively in China before anyone else in the World sees it. The strategy has evolved over time because BMW has used this very same strategy with other countries, and it has worked in their favor every time. In 2021 BMW’s vision iNEXT will debut. The vehicle will combine the latest technology and intelligent design as well as customizable (www.bmwgroup.com).
An example of BMW entering a new national market would be when the rise of demand of luxury cars were needed in Asian markets. What many may not know is that about 70% of BMW’s production is exported. Many of the exports go to European Union countries, Japan, as well as the United States. BMW has also been known to target people in similar target groups. These people are typically similar in a lot of ways. People in these target groups typically have higher education, higher positions, and ultimately different lifestyles than the everyday working American. Aside from efficient and effective marketing skills and strategies are production and supply chain systems, which propel BMW AG automobile to profitability and greater heights of success. Most of its high-quality manufacturing activities takes place in Germany, Munich where the headquarter lies. As mentioned above, it also has foreign subsidiaries, which equally ensure high standards of quality products in line with the parent company. In other words, it remains sensitive and indispensable with matters concerning costs, quality, flexibility, and promptness while manufacturing.
In the automobile industry, manufacturing plants usually apply high technology in the production processes. The manufacturing processes normally takes place in bits where various parts are made through high technology.
Similarly, adoption of modern technology, developments, and advancements in the industry also enables it to compete favorably in the marketplace. In other words, it never lags behind concerning latest technology. With modern technological methods of manufacturing in place, it engages top talented and creative personnel to ensure that the final product appeals to the target market. In short, creativity, innovation, and skilled workmanship, undoubtedly lead to products that clients would like to have, which competitors’ envy in the entire industry.
With enhanced production of high-quality automobiles, the organization has to look for foreign markets. After an extensive market research exercise, it began engaging in vehicle exports both directly as well as indirectly to more lucrative foreign markets. It is true that export business strategies enable the company access different market segments spread widely across the world.
On top of exporting is licensing as a reliable business strategy employed by BMW. It strategically grants production and sales rights to foreign firms on payment of an agreed fee. Moreover, this enabled its reduce perceived business risks to minimal. On the other hand, this strategy has a downside in that the parent organization gets little profit compared to exporting. Aside from licensing, is joint venture as a strategic business entry mode, which this organization applies.
Despite enhancing clientele base, it is a costly venture for this organization. Generally, the success of BMW automobile takes credit from business management skills alongside engagement in strategic and tactical business decisions whenever at the right time with the right people.