Critical Analysis Of BMW's Business Management Process: Internal And External Challenges

Business Management Process

Appropriate Business management refers to a key initiative in ensuring continued success and business growth rates. Management procedures refer to the entire strategic approach of the business based on which a company can expand its active regions in an ethically concerned and focused area. In other words, business management is the process of ensuring all of the working protocols of the business are working most effectively so that productivity and quality-oriented product or service quality can also be maintained in the topmost dimension of the business area (Golandaj, and Kallihal, 2020). Through an effective business management procedure, the workers in multinational brands can effectively produce high-quality work and ensure positive follow-up over the working protocols and legislative framework.

Every successful business entity requires strong resilience and support both in terms of internal and external environment based on which they can initiate their business actions efficiently and emerge as one of the most successful global leaders within a particular industry or business arena. At present times sustainability and ethics are two essential functions that every successful business entity like BMW must consider to create better trust and reputation within the market (Wang et al., 2021). Sustainable leadership is one of those approaches of business that delivers long term values to any company and conjures up better images in front of the stakeholders or the target customers of the company.

Having relevant knowledge from the macroeconomic point of view enables the management of any company to instil the provisions and principles related to sustainable and ethical business standards. The low-cost thinking approach related to BMW allows its management to to invest in such areas that cultivate successful leadership attributes. The purpose behind the development of this research paper is to discuss different types of internal and external challenges that the company needs to face daily to succeed as one of the most prestigious and globally accredited business establishments within the car industry. Discussions will be made about the market rivalry, how value creation is made by BMW, the internal and external challenges and the globalisation and consultation platforms of BMW in this section of the research paper. Lastly, China's automotive market will also be discussed vividly as an essential part of the discussion in this particular research paper.

The purpose of the study is to critically analyse the business management procedure of the business operations of BMW Corporation. BMW is one of the largest automobile corporations in the Germany Munich region. Following the purpose of the study, different sections have been included in the discussion, such as survival measures of BMW, high-level management practices adapted by BMW, and ethically working procedures of BMW (Rajadurai, M., Chawla, S. and Satheesh, 2021). The study will be concluded by summarising the critical discussion of the paper.

Survival Measures

The business management process refers to the formulated framework by business authorities to ensure high production and inclusion of the workforce within the active region. A detailed discussion of the entire business management procedure adapted by the BMW Corporation is below,

BMW's entire business management procedure has been established on the four core principles, including quality-oriented production, efficient client handling measurement, continued product innovation, and lastly, a high consumer satisfaction rate. Based on these four core principles, BMW manages the working procedure of the entire business. In terms of quality-oriented production, it reflects upon car manufacturing services to the clients. The manufactured cars need to be maintained in the most effective format from the safety, comfort, and high running efficiency perspectives. Thus, by offering these quality printed products and services to the consumers of BMW, the total consumer satisfaction rate of the organisation can be maintained in a compelling format. In terms of continuous innovation measurement, the corporation has included an entirely new department for the R&D initiatives (Goswami et al., 2021). The sole purpose of the R&D sector is to ensure continuous innovation in an ethical and environmentally friendly manner.

Through these environmentally friendly operational procedures, the car manufacturing corporation will be able to ensure a positive growth rate of the business by attracting environmental concern consumers (Goswami et al., 2021). The corporation has confirmed positive recruitment of human resources to manage the clients positively. After the recruitment process, the human resources are offered quality training to ensure a high client involvement ratio and positive satisfaction. Thus, it is being concluded that the four core principles of the business management process have supported BMW to enhance the active regions in the global environment. Alongside also ensures positive turnover ratios and ROI to the investors' investments made to the corporation.  

The corporation operates in a highly competitive marketing landscape where significant players like Audi, and Mercedes are already present. Thus, it is being stated that a proper survival strategy is highly required for BMW to ensure a positive turnover ratio. Following this requirement, the corporation has invested a considerable portion in the R&D sector to reduce the carbon footprint from the vehicles during operation and also taken initiatives to offer eye-catchy product segments. These two corporation measurements have mainly been considered the most significant survival measures (Golandaj and Kallihal, 2020).

Regarding improving the product design, the corporation has taken the initiative to maintain refined design-based car products and eye-catching excellent design-based car products. As per the upper management of BMW, Cars are one of the most significant fashion accessories required to be maintained in a classy and eye-catching format. Following these specifications, the corporation has included eye-catching cool designs in their two-wheeler segments and offers an elegant and glossy design in the four-wheeler segment. Reports state that this innovative strategy of the corporation has ultimately offered them benefits of acquiring a considerable amount of market share in the global region and enhancing the earning profit.

High-Level Management Practice with Honeybee Principles

Honeybee principle has six significant dimensions that offer business to ensure earning products positively along with the increasing customer satisfaction rate. Under this honeybee principle, the included dimensions are taking a long-term perspective, investing in. people, adapting the organisational culture, being innovative, and exhibiting social and environmental. Responsibility and behaving ethically (Ramaa et al., 2020). These principles support businesses to effectively manage the workforce and the client, producing high-quality products and offering them to the clients. Thus, it can be stated that the maintenance of the honeybee principle ultimately supports businesses to expand the active regions in the global direction (Lechner, 2020).

Following the operational measurements of BMW, the honeybee principle was also obtained for the workforce and client management procedures of BMW (Rajadurai, M., Chawla, S. and Satheesh, 2021). The corporation has identified the importance of maintaining an inclusive and diverse work culture. Thus, by following the cultural segment of the honeybee principle, it has maintained an inclusive and diverse work environment by hiring talent from different parts of the world. Additionally, a tremendous amount of investment in the R&D sector has also been made by the corporation for enhancing customer satisfaction alongside earning profit.

Critical analysis of internal challenges

BMW Group has always remained one of the most customer-friendly companies that have successfully identified to consistently focus on conserving the resources and maintaining sustainability with long-term thinking and accomplishment of proper strategies that support the thinking process of the company. But even after accommodating different types of steps to uplift sustainability and ethics in the operations of BMW presently faces a few critical internal challenges that are very important to identify to enable the users of this research paper to go through them and develop relevant recommendations that are efficient in mitigating those challenges (Wang et al., 2021). Usage of the SWOT analysis has been made to discuss the internal environmental drawbacks of BMW. This will identify the weakness and threats that BMW has been facing in recent times to promote sustainable and ethical practices.

Speaking about the perspectives that the BMW group considers to maintain sustainability and ethics at the highest possible standards is commendable (Liu and Liu, 2021). The company plans to responsibly fight against any adverse scenario that might affect the global environment and strictly take actions or initiatives to manage different social issues related to society and the employees. BMW has taken various initiatives that focus the company to drive in the future with different types of sustainable and ethical approaches on the line and transform itself as one of the best globally reputed organisations in terms of sustainability and ethics. Some of those initiatives are:

• The infrastructure of BMW will be upgraded with the help of initiatives that focus on expanding the H2 mobility and the “fuel cell hydrogen joint” with an electric line-up and refuelling technologies (Thun and Hoenig, 2018). With Electric gaining importance and reputation within the market, the company has plans to launch different electrically powered vehicles that would be a 20% higher efficiency than the fuel variant vehicles.
• Other vital perspectives that BMW focuses on can be found in using fuel cell technology as an alternative to the previous technological advancement. The company has plans to install several charging points at essential locations to assure the owners of the electric vehicles and make them competent enough to ply the road without any tension and fear of a breakdown in the middle of the road.

Critical Analysis of Internal and External Challenges

Speaking about the Value creation and production cycle that BMW follows, it can be found that the company emphasises more on sustainability in the form of dismantling and recycling the vehicles from time to time in the most environmentally friendly way possible. BMW follows the recycling process to the supply chain in a very holistic way and remains more optimised and focused on reducing the carbon footprints from the atmosphere. The CO2 emissions made by the company are still one of the most concerning areas that BMW must address effectively (Moreno and Terwiesch, 2015). Focus is given to guiding the principles that would allow the company to consider different renewable and recycled ways to secure the raw material and perform the interior trims by keeping the emissions as low as possible.

BMW successfully and, of course, every type of sustainable strategy by keeping in mind public transparency and ethical aspects. The company has strategized different methods for reducing carbon disclosure into the atmosphere and has also illustrated the necessity to upgrade its sustainability rating rank by achieving every climate goal by the end of 2023 (Thun and Hoenig, 2018). The revolution of the concept that BMW has planned to launch in the market will enable the company to develop its product by becoming a responsible citizen towards the environment and acting as a sustainable and ethically responsible organisation. Considering the evaluative measures that BMW needs to take, it can be said that the preparation of the sustainability report and environmental audit will serve the purpose behalf of BMW to meet up with global standards associated with sustainability and ethics.

BMW is plagued with different managerial issues. Speaking about the problems of reliability and after-sales support comes at the top of the list for BMW, which also depicts BMW as an ethically unresponsive company. Continuous market pressures and stringent profitability options make BMW reluctant to grab more business in this uncertain and fabulous global economy. The global automatic market is facing high competition and increased governmental regulations are also imposing serious threats in front of the company (Moreno and Terwiesch, 2015). Poor automotive branding portfolio is another weakness that the company's management needs to face. Lastly, high debt levels are often considered a bit risky for BMW.

Figure: Debt levels of BMW

(Source: Annual Reports)

Speaking about the external challenges that BMW faces, some of the most common among them are:

• BMW needs to incorporate its actions and operations according to the rules and regulations related to emissions. Constant adherence to the changing regulations and policies often creates intense pressure in front of BMW and affects the organisation's growth.
• Constant fluctuations in currency and increased tariff rates or some other external challenges in front of Amazon might affect the GDP of the country they are operating. BMW's speculative profits might also get hampered due to this kind of external challenge.
• Increased costs related to research and development create pressure in front of BMW to deliver its services efficiently and focus on other essential aspects like sustainability and ethics in a broader context.
• Abiding the ecological factors remains one of the most critical external challenges that the company needs to deal with regularly (Thun and Hoenig, 2018). Presently, it is essential for the company to guarantee that the CO2 emissions released by the vehicles produced by the company remain pretty low and utilise the resources to develop Electric models that might become one of the most challenging problematic factors.
• Usage of new technological versions and upgrades is essential for BMW to incorporate within their operational area. It would allow them to attain a better competitive advantage and focus more on making the services more muscular and more effective. Different business dynamics can be easily handled by the company efficiently and effectively.

The operating market of BMW is highly competitive, which includes corporations like Mercedes-Benz USA, Porsche, Audi, Lexus and Fiat Chrysler Automobiles (FCA). The presence of these top automobile companies in the operating environment of BMW indicates that proper operational measurement is highly required for ensuring success and continued growth. Following reports from the cultural perspective, BMW occupies the top place among all competitors. Mercedes occupies second place, and the rest of the corporations include Porsche, Audi, Lexus, and FCA. So from here, it can be stated that the workforce cultural measurements are highly efficient for BMW. BMW is in third place, right behind Porsche and Mercedes (Wu et al., 2021). Though in current circumstances, the product quality of BM has been enhanced in a considerable format and ensures positive customer satisfaction. BMW has occupied 4th place in the global automobile sector in terms of BPS measurement. These statistics indicate that the net promoter score of BMW is in a good position but still needs to be improved in a quality-oriented manner. In this net promoter scorecard, the top positioned corporation is Porsche, and the right benefits from Porsche are Mercedes and Audi.

Figure: BMW ranking in the cultural and net promoter score perspective

(Source: https://www.comparably.com/companies/bmw/competitors)

Furthermore, in evaluating the pricing score, the BMW Corporation occupies the 3rd position right behind Porsche and Mercedes. So from here, it can be stated that the pricing ranges of BMW products need to be maintained in a more specific manner so that the consumers can enjoy the drive offered by BMW properly. Here, the pricing score indicates the affordability range and the offering quality irrespective of pricing strategy. From this pricing strategy perspective, it can be identified that the topmost corporation is Porsche, and right after that, there is Mercedes. So, from here, it is being concluded that the top two competitors of BMW where the corporation needed to provide more focus are Porsche and Mercedes. Because from any such kind of competitive landscape perspective, there are always two corporations that stay ahead of BMW (Wu et al., 2021). So it is being recommended to BMW that they also provide more focus over these two competitors. The perspective of the employer’s net promoter score has placed BMW in the 3rd position in the global region. This 3rd prosecution from an employer's promoter score perspective indicates that the employee satisfaction rate is being maintained in a massive format in this corporation (Tielung et al., 2021). Though the statistics further need to be improved as the corporation still needs to be occupied the top place as to their cultural perspective. The placement of BMW in the principal position from a cultural standpoint indicates the key reason behind the high innervational measurement. Maintaining this inclusive and diverse work culture has supported the corporation in enhancing operational areas across the global region, just like the topmost competitive concerns.

Unlike its market competitors, as discussed in the previous sections of this research assignment, BMW does not rely much upon its home market to extract better returns from the market. Instead, it depends upon the demands of China (Rajadurai, M., Chawla, S. and Satheesh, 2021). BMW's management is keener to look at the sales figure and revenue extractions from the vehicles primarily sold in the Chinese market (Christiansen and Strobel, 2019). Reports suggest that the company has been doing well in terms of sales and revenue extraction in China, where on average, the company accounts for approximately 21.2% of sales every year. The financial report of BMW suggests that the aggregate revenue extraction of the company has increased by nearly 7.2% compared to the previous year. Market estimates suggest that BMW could sell approximately 27.2 million units only in China – making it one of the most efficient automatic markets in terms of profit and sales for BMW (Moreno and Terwiesch, 2015). The company has also successfully built strong partnerships and business deals with local Chinese automatic organisations. This joint venture of BMW proved to be highly successful and ensures success in the future with every market BMW enters into.

Conclusion 

In conclusion, it is being stated that the management procedures of BMW are desirable. The corporation closely follows the honeybee management principles and maintains inclusive cowl culture within the corporation. The maintenance of inclusive work culture supports generating of more innovative ideas for the work process of the organisation. Also, it assists the R&D sector in taking preventive measures for organisational issues and risks.

Completing this research assignment emphasised the necessity to incorporate ethics and sustainability as essential measures to create a better image in front of the stakeholders and shareholders of the company. Being an environmentally sustainable company alarms the company to incorporate different measures that would help them secure more customers and ultimately enhance sales. Completion of this research assignment paper also concludes the fact that a company like BMW needs to find alternative ways by which they can successfully contribute to making the environment more sustainable and a better place to live for the living creatures and humans. Producing electric vehicles remains one of the most obvious choices in the hands of BMW based on which they can try to keep up the excellent work in terms of sustainability. An ethically responsible company treats its employees as an efficient resource by providing them with all sorts of benefits and advantages so that better work culture can be created and remain focused on rendering their services with the highest efficiency.

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