MANAGEMENT CONCEPTS

BAYERISCHE MOTOREN WERKE AG

Harshika Mahipal 1011273

ACKNOWLEDGEMENT
I owe a great many thanks to a great many people who helped and supported me during the writing of this project. My deepest thanks to Lecturer, Mr. Sona George , the guide of the project for guiding and motivating me throughout this project. I would also thank my Institution, Christ University and my faculty members without whom this project would have been a distant reality. I also extend my heartfelt thanks to my family and well-wishers. THANK YOU ALL !!

AGENDA
Mission, Vision & Values Introduction History Taglines of BMW Long Term Plans Short Term Plans Conclusion References

CONTENTS
Sl. No. 1. 2. 3. 4. 5. 6. 7. 8. Topic Mission, Vision & Values Introduction History Taglines of BMW Long Term Plans Short Term plans Conclusion References Pages 1 2-4 5-6 7 8-9 10-12 13-14 15

MISSION, VISION & VALUES

BMW Group supports the sale of products through financial products and services offered to consumers , BMW centers and BMW Motorcycle centers throughout North America. In addition, BMWenhances customer relationship by offering comprehensive banking and insurance services tailored for the BMW driver. values are very important to BMW because they shape the personality of the organization. They affect the thier work, the services and products they provide, and support of the people and their communities. The core values of BMW are:

Uniqueness through diversity Leadership Teamwork Involvement in community Mutual respect Associate growth & development Taking risks Excellence through quality & innovation Courteous FAir Responsive Efficient ACRONYM: Ultimate Care

INTRODUCTION
BMW is the acronym for Bayerische Motoren Werke AG or in English, Bavarian Motor Works. It's an independent German company and manufacturer of automobiles and motorcycles. It's the world's largest premium car-maker and is the parent company of the BMW Mini, and Rolls-Royce car brands, and, formerly, Rover. It was founded in 1913 by Karl Friedrich Rapp in Munich (Germany). BMW produces motorcycles under BMW Motorrad and Husqvarna brands. BMW is known for its performance and luxury vehicles.

Organization and Locations: BMW Financial Services is one of 26 worldwide subsidiaries of the Financial Services Division of BMW AG, headquartered in Munich, Germany. We serve our customers in the U.S. and Canada from our National Customer Service Center in Hilliard, Ohio, and our administrative offices in Woodcliff Lake, New Jersey. Our four regional offices are located in Montvale, New Jersey, Schaumburg, Illinois, Ontario, California, and Atlanta, Georgia. In addition, the BMW Bank of North America (an Industrial Bank) is located in Salt Lake City, Utah.

Bayerische Motoren Werke AG

Type Industry Founded Founder(s) Headquarters Area served Key people

Aktiengesellschaft (FWB:BMW) Automotive industry 1916 Franz Josef Popp Munich, Germany Worldwide Norbert Reithofer (CEO), Joachim Milberg (Chairman of the supervisory board) Automobiles, motorcycles,bicycles 50.68 billion (2009) 289 million (2009)

Products Revenue Operating income Profit Employees

204 million (2009) 96,230 (2009)

Subsidiaries Website

Rolls-Royce Motor Cars www.bmw.com

HISTORY
Company History: The BMW story starts way back in 1913 with the formation of the Rapp-Motorenwerke company by Karl Rapp. The firm were engaged in the production of aircraft engines from a former bicycle factory located near Munich. It was close to this plant that Gustav Otto established the Bayerische Flugzeugwerke AG aircraft factory and in 1922 these two organisations merged to form BMW. The letters stand for: Bayerische Motoren Werke. In their early years BMW produced mainly aircraft engines, but also some motorcycle engines. In fact the BMW badge is supposed to resemble a spinning aircraft propeller. It wasn't until 1928 when BMW bought a car factory at Eisenach/Thuringia that BMW began producing cars. Along with the factory they bought the license to produce a small car called the Dixi. The first cars produced by BMW at the plant were badged BMW Dixi, but the word Dixi was soon dropped. They introduced a new model called the BMW 3/15 DA-2 and the success of this car enabled them to survive the great depression. It was in 1936 that BMW introduced the type 328 roadster which quickly became the most successful sports car of the time. The 328, designed by Fritz Fiedler, featured a number of innovative features including a stylish, aerodynamic body shape. It used an inline 6-cylinder engine which gave the car excellent performance and it was renowned for its excellent handling. The type 328 roadster accumulated a number of prestigious wins on the racing circuit and was nominated as car of the century in 1999. BMW's involvement in aircraft engine production during WWII led to a 3 year ban on production at the end of the war. It wasn't until 1949 that they were able to return to production which they did with the 250cc R24 motorcycle. It was in 1951 that BMW introduced a spacious, 6-cylinder sedan called the 501. This was followed by the 502 which featured a lightweight alloy V8 engine. Later in the 1950s they began producing the BMW 507, a lightweight, V8 propelled sports car. This was the vehicle they hoped would revive the sporting success they'd achieved with the 328 roadster. But this wasn't to be. They were losing money on every 507 that was produced and so production stopped in 1960. Also during the 1950s BMW bought the design and manufacturing rights to the Isetta which was to become one of the most successful microcars in the post WWII years. It was a time when cheap, short distance transportation was much needed and the 2-seater, with an economical 250cc engine, fit the requirements nicely. Manufacturing rights for the Isetta were sold to various production companies around the world and these included the British Railways works in Brighton, UK. The 1960s saw BMW enjoying a number of notable successes including the BMW 1500 which was a 1499cc, four cylinder touring sedan introduced in 1961. This was the first of the modern BMW sports sedans. They went on to produce a series of popular sedans including the famous BMW 2002. This was a 2-door sedan that had been based upon the 4-door 1600. The 2002 was to be the forerunner of the BMW 3 series and production of this successful model continued until 1976. By the 1970s BMW had cemented their reputation as an innovative automobile manufacturing company. The 70s saw the introduction of the 3-tier sports sedan range consisting of the 3-series, 5-series and the 7-series. Between 1970 and 1993 BMW car production quadrupled and turnover increased by 1700%.

The 1990s, after 1994, saw BMW take ownership of the British Rover Group. This was not a successful venture and in 2000 BMW disposed of Rover. Today's 'beemers' have retained their highly prestigious reputation for quality and reliability. The company are taking steps to reduce the impact they and their motor cars have upon the environment so we can expect to see more innovative and exciting developments from the motor car company who have not only survived two world wars and a massive depression, but thrived. Corporate History: BMW Financial Services was established in 1993 to support the U.S. sales and marketing efforts of BMW of North America by offering a wide range of leasing, retail, and wholesale financing services to BMW customers. With total assets in excess of $24 Billion, BMW FS is a leader in innovation and customer service in the automotive industry.

TAGLINES OF BMW
The Ultimate Driving Machine & Sheer Driving Pleasure

LONG TERM PLANS

Long Term Plan:
Exercise aimed at formulating a long-term objective, to meet future needs estimated usually by extrapolation of present or known needs. It begins with the current status and charts out a path to the projected status, and generally includes short-term (operational or tactical plans) for achieving interim goals and long term plans.

BMW and Efficient Dynamics:

The BMW Group long-term energy strategy innovation for lower fuel consumption. The BMW Group supports the Kyoto targets and has been working intensively for years to reduce its fleets fuel consumption. The energy strategy pursued by the BMW Group is sub-divided into three steps. In the short and medium term, the fuel consumption of vehicles will be reduced by new, highly efficient engine generations, active aerodynamics, the use of innovative lightweight materials and intelligent energy management within the vehicle. For the BMW Group, all of these activities fall under the concept of Efficient Dynamcs. In the medium term, the BMW Group is working on achieving additional consumption benefits through various measures such as increasing the electrification of the drivetrain and hybridisation. From the BMW Groups perspective, the most sustainable technology in the long-term is the use of hydrogen in the combustion engine, since hydrogen can be produced from various regenerative energy sources with practically no Carbon-dioxide emission. In November 2006, the BMW Group presented the BMW Hydrogen 7, based on the BMW 7 Series, the first hydrogen-powered vehicle to be offered in the premium segment.

BMW hybrids gear up for greener future

As automakers worldwide gear up to produce alternative-energy vehicles, BMW is on track to fulfill its own commitment to save energy and reduce emissions while enhancing driving pleasure. The company recently held a test drive for its ActiveHybrid 7 Series sedan and X6 sports activity coupe along Thousand Island Lake in eastern China's Zhejiang province. The two models are the company's first hybrid cars in volume production. They went on sale in China after the Beijing auto show in April. Powering the ActiveHybrid 7 Series is a 4.4-liter eight-cylinder petrol engine, an electric motor and a lithiumion battery. The model consumes 9.4 liters of gasoline for every 100 km on average, 17 percent less than conventional 7 Series models. The X6 is a full hybrid car that can be powered solely by electricity when driven at speeds below 60km/h. Under conventional power it offers maximum power of 357kW and a top torque of 780 Nm. The company says both models are milestone products that mark the beginning of a new phase in its "EfficientDynamics" strategy. Long-term strategy BMW began to implement the long-term strategy in 2002 with the aim to reduce fuel consumption and carbon emissions in its full range of products. In its first phase, BMW raised efficiency primarily through the improvements in its internal combustion engines and the use of lightweight body materials and aerodynamics. From 1995 to 2009, average fuel consumption across its entire fleet sold in Europe decreased by 25 percent. The company started the second or mid-term phase of the strategy this year with extensive use of "intelligent energy-flow management" technology on its hybrid and electric models, including the ActiveHybrid 7 Series and X6.While every car manufacturer is going its own way, eventually they will all probably arrive at the same place with the same technology, said Christoph Stark, president and CEO of BMW Group Region China. "The question is who will be there first with a better solution," he said, adding that BMW is well-prepared for the race in future technologies. According to Stark, his confidence stems from the carmaker's ability to think ahead and act early, as the company pushes technological development rather than being pulled along by the tide. BMW will bring 50 Mini E electric cars to China later this year for a field test after trials in the US, the UK and Germany. The company wants to see how people use the cars in their daily lives such as how many miles they drive and where they prefer to charge the battery, said Stark. With the data collected from China and other countries, the company plans to roll out a "megacity vehicle" in 2013, which he said "is a whole new concept, not just an old car with a new drivetrain". Source:China Daily

SHORT TERM PLAN

Short Term Plan:
In general, a plan with a planning horizon of five years or less is called a short term plan. BMW Aims to Take U.S. Luxury-Sales Crown by 2012 : Bayerische Motoren Werke AGs U.S. chief said he wants the BMW brand to overtake Toyota Motor Corp.s Lexus as the top-selling luxury line in the U.S. by 2012. Lexus will lead the category in 2010, extending a 10- year run, ahead of BMW and Daimler AGs MercedesBenz, said Jim ODonnell, president of BMW of North America LLC. Mercedess 30,548 sales through February exceeded Lexuss 29,304 and BMWs 28,263, according to researcher Autodata Corp. The namesake brand of Munich-based BMW will start selling a new 5-Series sedan in June, ODonnell said, and unveil remodeled X1 and X3 sport-utility vehicles early next year. In 2012, that would be my goal, to be No. 1, because of all the new products we have coming in, ODonnell said today at the New York International Auto Show. Sales this month were quite strong and may be at about last years level or maybe slightly above it, he said. Automakers report U.S. March sales tomorrow. Mercedes may report an increase of more than 10 percent for March, Ernst Lieb, president of its U.S. unit, said in an interview. Are we watching each other? Absolutely, he said, without predicting the top seller for any year. We want to see where we might have done really well and where we might have missed a little bit of an opportunity. I think thats just normal. Lexus Outlook: Lexus sales in March rose well over 10 percent from a year earlier, a spokeswoman, Nancy Hubbell, said in a telephone interview. Being the top seller in the luxury segment has never been our goal, she said. BMW-brand sales totaled 196,502 last year, trailing the 215,975 for Lexus, according to Woodcliff Lake, New Jersey-based Autodata. Mercedes was third with 190,538. BMW led Lexus after five months in 2009, prompting ODonnell to say in a June 3 interview that taking the top spot for the year was a good possibility. The Toyota division ended up widening the annual gap.

BMW to Surpass Savings Target as Net Beats Estimates : Bayerische Motoren Werke AG, the worlds largest maker of luxury cars, will significantly surpass its goal of reducing spending on components and supplies by 4 billion euros ($5.2 billion) by 2012, helped by a partnership with Daimler AGs Mercedes-Benz. Talks between BMW and Mercedes have yielded new projects over the past several months that will help each company reduce spending by about 100 million euros a year by 2012, Herbert Diess, BMWs purchasing chief, said in an interview in Munich. The maker of BMW, Mini, and Rolls-Royce vehicles is pushing forward with efforts to cut costs after reporting first-quarter net income today of 324 million euros, beating the 264 million- euro average estimate of eight analysts. BMW is seeking to raise profitability as Mercedes-Benz and Volkswagen AGs Audi luxury unit step up their efforts. Its good news that they were able to beat expectations given the runout of the 5-Series, said Mike Tyndall, a European automotive specialist with Nomura Securities in London. Listening to Mercedes and Audi, it appears pricing pressure has eased somewhat. Audi intends to dethrone Munich-based BMW as the luxury leader by 2015, while Mercedes, which was toppled by BMW in 2005, has vowed to take market share this year by growing at twice the pace of the global car market. BMW is responding by trimming costs and expanding product offerings. Significantly Surpass We can say that from todays perspective we will certainly and easily reach the 4 billion-euro savings goal, and even significantly surpass it, said Diess, the 51-year-old management board member responsible for the cuts. BMWs first-quarter profit compares with a loss of 152 million euros a year earlier, the company said in a statement. Sales rose 8.1 percent to 12.4 billion euros. Deliveries climbed 14 percent to 315,614 vehicles, boosted by a 54 percent surge in sales of the 7-Series. The car shares as much as 70 percent of its parts with the revamped version of the cheaper 5-Series, which went on sale in March in Europe. In addition to rolling out the revamped 5-Series and new Mini Countryman this year, a line of electricpowered city cars is due to be introduced by 2013. The maker of Mini and Rolls- Royce vehicles is also developing front-wheel drive compacts for the namesake brand, as part of a target to boost sales to 2 million vehicles by 2020. Product Proliferation: The strategy that BMW seems to be following is proliferation of product, said Christoph Stuermer, an automotive analyst at IHS Global Insight in Frankfurt. The question is can they still handle that? Or will it come back to bite them? BMW is seeking to lower costs by helping component makers improve efficiency as well as develop systems, such as start- stop technology, that they may be able to sell to other manufacturers. Well never be able to lower costs just through volumes, Diess said in the interview yesterday.

New projects with Mercedes, BMWs closest competitor, will lead to significant savings as well as technical advances, Diess said, adding that there are limits to the cooperation, which currently encompasses a few dozen components. BMW manufactured 4,400 vehicles more than it delivered in the first quarter, as it increased inventories for Chinese growth and the rollout of the new 5-Series. The additional inventory raised working capital by 445 million euros, which in turn decreased free cash flow, the company said today. Back on Course: We increased earnings significantly in the first quarter and are now back on a growth course on almost all car markets, Chief Executive Officer Norbert Reithofer said in the statement. We expect that earnings will grow dynamically over the course of the year. BMW rose 14 cents, or 0.4 percent, to close at 35.98 euros in Frankfurt. The stock has gained 13 percent this year, valuing the company at 23 billion euros. Earnings before interest and tax will rise in 2010, fueled by a solid single-digit percentage increase in deliveries, BMW said today, reiterating an earlier forecast. The automaker is targeting sales of at least 1.3 million cars and sport- utility vehicles this year compared with 1.29 million in 2009, its lowest full-year sales since 2004. BMW aims to make progress this year on a goal of raising Ebit from automaking to 8 percent to 10 percent of sales by 2012. After the unit posted a loss last year, BMWs car- manufacturing business will likely increase its Ebit margin to the low single-digit percentage range, the company said. Currency Fluctuations: Because most of BMWs manufacturing is based in Germany, the carmaker is exposed to currency fluctuations and has sought to limit the risk by increasing purchases of components in currencies other than the euro. The euro today traded below $1.30 for a second day, near the weakest level since April 2009, amid concern that Greeces fiscal crisis will spread, derailing the regions economic recovery. With about 40 percent of parts for cars produced in China locally supplied and more components purchased from American suppliers, BMW will reduce its foreign currency risk by about 1 billion euros by 2012, Diess said. We are in the position to build BMWs in all three geographical regions, he said.

CONCLUSION

BMW has been going on a fast-track to achieve a series of goals which are to be achieved by implementing various long term and short term plans. BMW plans for the future mainly comprise of new models , a fourth brand and achieving a target of 2 million by 2020. BMW CEO Norbert Reithofer revealed the automaker's plans for the future, all the way up to 2020. First off, the company's got a short-term five-year plan of achieving annual sales of 1.8 million vehicles by 2012. After that, it will have another eight years to reach annual sales of 2 million by 2020. Those are big jumps from today, but BMW plans to reach them by increasing production at its Spartanburg plant in the U.S., as well as the MINI plant in Oxford. Of course, the growing Chinese market will also demand more BMWs, and the automaker will be happy to oblige.

Increasing production of what's currently offered in BMW dealerships won't get the automaker all that far, so a slew of new vehicles were also announced by Reithofer. These include expanding BMW's range of SUVs with a small X1 model, as well as producing a four-door Gran Turismo car based off of the CS Concept that debuted in Shanghai this year. The BMW brand will also debut what it calls a Progressive Activity Sedan, or PAS, about which it divulged little, so we'll have to wait for more details on exactly what makes it different from a standard sedan.

In conclusion I would like to say that BMW is trying to achieve new targets like greater production , making automobiles which have low fuel consumption and is gearing up for a greener future by reducing the emissions while enhancing driving pleasure. Hence, we observe that BMW is a company which is giving its best to the company, the environment and most significantly its customers all at the same time with the help of well laid out plans and strategies.

REFERENCES
www.autoblog.com/.../bmw-confirms-plans-for-front-drive-models/ www.accessmylibrary.com/.../strategic-planning-bmw-global.html - Cached - Similar green.autoblog.com/.../bmw-confirms-plans-for-front-wheel-drive-low-emissions-targets/ http://www.fantasycars.com/sedans/column/sedans2_bmwhistory.html http://www.bmwclubs.asn.au/sa/history.html http://english.peopledaily.com.cn/90001/90778/90858/90865/7032170.html http://fs.bmwusa.com/BMWFSPulp/ABOUTU_MissionVisionValues.htm http://www.autoblog.com/2007/09/27/bmw-plans-for-future-2-million-by-2020-new-models-and-fourth-b/