CORPORATE STRATEGY - BMW

Corporate Strategy - BMW



Corporate Strategy - BMW

Corporate strategy can be defined as a pattern of decisions made by a company that determines and reveals the objective, purposes of it's goals, where by it will produce the principal policies and plans for achieving those goals and defines the range of business the corporation is to pursue (Andrews 1997).Many companies will only change or adapt their corporate strategy when market and economic patterns change. However, to keep at the top a corporation has to keep re visiting its corporate strategy to avoid failure. Mintzberg, W.(1985) argues, “Strategic choice requires that kind of awareness, a high degree of it is likely to characterize effective managers and effective organizations”.

This essay will be based on the Corporate Strategy and will use BMW the car manufacturer to help further expand this concept. The essay will be complimented theoretical concepts to help fully understand the company's corporate strategy and how this is formed and is constantly improved according to market behavior and the economic environment including market trends.

"The ultimate driving machine." This catchphrase, which in many words depicts the BMW brand name, having a strong brand icon has been the foundation of BMW's triumph; known to focus on premium segments of the motoring industry has allowed it to be at the forefront. Since its birth in 1929 (Lencioni 2003).

BMW is not the only luxury carmaker in the automotive market, it has always faced stiff competition from brands like Mercedes and Volkswagen, yet BMW have managed to maintain a competitive advantage year after year. Every company whether small or large it's main goal is to maintain profitability and growth. This can only be maintained with a successful strategy. However, the ever increase in competition has made a successful strategy making harder.

Recently BMW Group's main aim has been to capitalize on profitability and increase value over long term like any other multi national corporation. However the recent change in market trend towards more environmentally friendly cars and corporate responsibility has made BMW bring a change in strategy while maintaining a competitive advantage.

According to a report by the BBC(2007), the markets mostly in the developed world are changing and consumers are now focused towards more efficient and environmentally friendly cars as supposed to the old-fashioned gas-guzzlers. Where this brings into focus the need for more environmentally friendly cars. Simultaneously many companies, including BMW, have also seen the rise in demand for high-end cars in emerging markets. (BBC 2007 Fig. 1)

(BBC News, 2007 Fig. 1)

Subsequently BMW created the Efficiency range, unlike conventional hybrids BMW adapted its cars to run more efficiently with out any battery operated aids. This has resulted in maintaining the thrill in the products yet simultaneously being environmentally cautious. The BMW Group is the most successful premium manufacturer in the automotive industry. One of the key fundamentals for this success was and is the ongoing leadership and innovation in the construction of cars perceived and acknowledged as leaders by their ...