According to the recent reports of the company and its publications in social media resources, BMW is planning to pursue electric car strategy and transformation of the organizational structure of the company. Since introduction of new series of BMW 2 in the United States and Europe, BMW approached to the realization of the innovative-based strategy (Boeriu, 2016).
Every organization follows its own grand strategy that allows to achieve and follow long-term objectives. At the same time, there is a room for the diversification of the grand strategy as follows:
Product development strategy;
Strategy for the development of the company in the emerging jurisdictions;
Environmentally friendly and sustainable approach.
Coming back to the analysis of the grand strategy of BMW Group, it appears that the organization focuses on the innovation as the main driving force. This implies that innovation should be combined with quality of the products of the organization in pursuit of the association among customers in the ability of BMW Group to produce distinct vehicles. The main objective and essence of the innovative strategy is to develop new product life cycle and ascertain own product from similar category of items. Besides, this strategy is risky enough due to the fact that the identification of the most useful and effective innovation requires significant investments and high level of profitability. In addition, the company should invest resources in marketing services in order to show perspective nature of the product.
Beyond the fact that there is a strong criticism of the innovation strategy of BMW Group, BMW company is successful in the implementation of this approach in business the automobile industry. The brand image of the organization is closely connected to the innovations. The company has already proved its ability to surprise consumers with its achievements in search of new innovative decisions. In fact, BMW Group increased its expenses for R&D activities up to 53% as well as it founded additional factory to be engaged exclusively in the development of innovative solutions.
Grand strategy matrix of BMW Group has several peculiarities. First of all, the company developed vertical integration, while it contains elements of backward and forward vertical integration. Backward vertical integration of the company implies that it is looking for several outsourcing opportunities in order to speed up production of the vehicles on the local basis. In turn, forward approach means that MBW refers to leasing services that are popular among consumers in the United States. General global grand strategy of the company looks as follows in Table 1 below:
The overview of the current strategy of the company shows that this approach is optimal for the achievement of the current goals of the organization. Although, there are also some concerns as to the positive effects of this type of this grand strategy for the growth of the organization. Since 2008 BMW Group was affected with the effects of the financial crisis as sales in premium segment sharply decreased. While the company is too dependent on the rates in this segment of the automobile industry, it should have looked for new sources of profit. Hence, the company is always obliged to keep quality of the products and its status beyond the external factors. The company finds its useful and competitive to follow innovative-based approach as it allows to keep pace with technological developments in the market. Moreover, by the implementation of this strategy, the organization succeeds to warm up interest of the consumers that the company will present new product with relevant distinctiveness of the vehicles from the autos of the other producers. In this respect, this strategy is full of flaws and gaps due to the fact that the organization has no chance to fail. In other case, it may lose its status and position in the market.
The management of the company provides it staff with an opportunity to contribute to the implementation of grand strategy. In fact, every employee of the organization has a right to discuss any solution or option pertaining to the production process. Besides, he or she should have relevant background or experience in order to enter this discussion. Accordingly, there are some recommendations that may be invoked as mean of the adjustment of the grand strategy of BMW Group. In particular, it is highly recommended to BMW Group to diversity its market. This statement should be understood in the manner that BMW is in need for cost-effective products lines that will be present in the automobile industry beyond luxury segment. This approach may bring more financial benefits for the organization. At the same time, the company should consider perspectives in the expansion of its physical presence in the developing countries. It is evident that the developed regions fall within the scope of the targeted audience of the organization, while developing nations are left without attention. However, China and India show outstanding economic indicators that should be attractive for the management of the company in terms of long-standing cooperation. Finally, the company is advised to follow consortia grand strategy as it should help to the organization to develop new relationships and collaborations with global partners. this strategy will reduce productions costs of the company so that it will be able to cut off prices for certain vehicles for the consumers and increase sales.
- Boeriu, H. (2016). New Strategy At BMW: CEO Krueger wants to start an electric offensive. BMW BLOG. Retrieved 5 November 2017, from http://www.bmwblog.com/2016/09/11/new-strategy-bmw-ceo-krueger-wants-start-electric-offensive/