The auto industry has grown up as a really dynamic industry in the past few decennaries. Although the primary intent of this industry has been to fulfill the consumer ‘s demand to go from one topographic point to another with comfort, the continuously altering market, has easy altered consumer ‘s demands into desires which have cleared the manner for intense competition in the car industry.
Bayerische Motoren Werke Group ( BMW ) is one of the universe ‘s prima luxury car manufacturers. Founded and based in the Germany. BMW group employed over 100,000 people, in 2009, doing and administering a series of successful, premium-priced rider autos and motorcycles*34. In add-on to its fabrication operations, BMW besides provides fiscal services to back up its worldwide gross revenues and distribution of autos and bikes. But in this study, we will be merely concentrating on the autos, which accounted for about three quarters of BMW group ‘s gross revenues.
BMW was ab initio established to construct aero engines during the First World War. By 1945, company was still state ‘s prima aero engine maker. But by 1928, BMW has besides started doing autos, when it got the licence. It was subsequently when BMW became one the biggest cars shaper in Germany. But after the Second World War, company was laid into ruins. The demand for aero engines later disappeared. Its mills and other capital equipment, which were located in country now controlled by Soviets, were under serious menace. At this point of clip company was non certain about its hereafter and started concentrating on cars production. But in 1959, company went into fiscal convulsion, when it faced bankruptcy. In this difficult clip, company found a Jesus in the face of Herbert Quandt, who emerged as a powerful portion holder by taking over the 50 % portion of the company ( Anon, 2007 ) . In BMW group ‘s history the turning point was 1961, when it launched BMW 1500, which shortly got BMW trade name, the repute of an first-class technology company. Now a twenty-four hours, BMW enjoys the ownership of three quality trade names, BMW, MINI and Rolls-Royce motor autos.
This study consists of two parts. In portion 1, we will be first discoursing BMW ‘s schemes from 2002 boulder clay 2004. We will so be measuring those schemes with the aid of different tools. In portion 2 of this study, we will be looking at BMW ‘s chief schemes from 2005 to 2009. We will so be measuring those schemes. We will besides be concentrating on the issues which BMW had to confront because of the recession and how it managed to undertake them and still remain as a one of the lone few profitable car companies in the current economic clime.
BMW ‘s Schemes for 2002-2004
In this portion of the study, we will be looking at the schemes from 2002 to 2004. Rational behind this is assignment of Helmut Panke, who took over as BMW group ‘s new CEO in 2002. So it will be rather sensible for us to see what policies he made out and how did they execute.
Before we start discoursing BMW ‘s schemes, we must cognize what scheme is. “ Strategy is the way and range of an organisation over the long-run, which achieves advantage for the organisation through its constellation of resources within a ambitious environment, to run into the demands of markets and to carry through stakeholder outlooks ” ( Johnson, G. , Scholes, K. & A ; Whittington, R. , 2006 ) . BMW ‘s schemes can be categorized as multi-leveled schemes, which are discussed below.
Corporate schemes are companywide and they detail actions which guide about deriving competitory advantage and adding value, through choice and direction of a mix of concern determinations while viing in several industries and markets. In other words, corporate scheme ushers in which sector house should be working and how the corporate parent should pull off its groups of concern units. This is normally achieved by efficaciously utilizing resources, capablenesss and nucleus competencies that create value. We will be look intoing BMW ‘s attack towards development of corporate scheme utilizing Ansoff Matrix.
Like all other organisations, BMW followed some strategic development waies in order to spread out them and to increase their gross revenues. Ansoff matrix is a tool which helps organisations, like BMW, to develop scheme waies that they can follow, sing the merchandises range and markets, while sing the capablenesss and stakeholder ‘s outlooks of the organisation. As it can be seen in the figure # 1, there are four scheme development waies. BMW followed about all of them. We will be discoursing them one by one.
Figure # 1
( Beginning: tutor2u.net/business/strategy/ansoff_matrix.htm )
Market incursion involves increasing market portion by accomplishing growing with bing merchandises in bing markets. BMW ‘s scheme for this was on-going growing and enlargement. One such enlargement was opening of new gross revenues subordinate in Malaysia “ BMW Malaysia Sdn Bhd ” . This was a joint venture with BMW ‘s local spouse Sime Derby. BMW ‘s mark was to farther escalate their presence in the market so that it can to the full work the growing in the market*1. As portion of its enlargement to better its international presence BMW farther expanded its gross revenues organisations in Greece, Ireland, Luxembourg and Denmark*2. In 2003, BMW group besides signed a contract for joint production and gross revenues venture in China, which was aggressive market for BMW*3. BMW was careful at this phase because it had to sell off its old confederation Rover in 2000.
This scheme involves about how an organisation can sell new or modified merchandises into its bing markets. BMW ‘s attack towards this was to establish a new theoretical account every three months from 2003 to 2005*4. BMW named it as ” merchandise and market violative ” and pushed itself difficult to accomplish this*5. This can besides be linked with BMW ‘s variegation scheme.
In 2003, BMW launched MINI ONE D which was followed by the bringing of new BMW 5 limousine to the traders and customers*6. In January 2004, with the launch of the BMW X3 this twelvemonth, the company established the compact Premium Sports Activity Vehicle segment*7. In the same twelvemonth, BMW brought premium auto position to the household category with the successful launch of X1 series*8. This smallest BMW was viing against Golf, A3 and Astra theoretical accounts. BMW maintained its high repute for bring forthing dynamic and prosecuting autos by the launch of new X6 series the same twelvemonth. 6 series provides an attractive mix manner, public presentation, modern engineerings and practicality at a monetary value that appears to acclaim from the past decennary. BMW launched this when the international demand for luxury autos is at the high end*9. It is really of import to cognize that many few companies balance themselves between the intersection of art and concern every bit successfully as BMW does, because of the aesthetic sense it brings into its autos ( Bangle, C. , 2001 ) . The cogent evidence of this is the regular award profitss for its designs.
This is a scheme where a concern sells new merchandises in new markets utilizing organisation ‘s bing capablenesss or resources. BMW ‘s attack can be linked to related variegation by developing beyond current merchandises and services with its bing capablenesss. BMW diversified itself by bring forthing smaller 1 series autos. One may reason that BMW was already bring forthing MINI, but it ne’er had little autos with their chief BMW trade name. BMW besides entered the same twelvemonth in the new market section, auto racing, with the launch of X3 Sports Activity Vehicle and the big 6 Series Coupe . *10
This is a scheme where a concern aims to sell its bing merchandises in new markets. While making merchandise development, BMW was following the market growing scheme at the same clip. Main grounds because of which an organisation decides to spread out itself in the new market are its capablenesss and market considerations. While Western Europe, the USA, Japan and the Pacific part have been the chief markets for BMW, new markets were to be exploited every bit good. BMW Z4 reached in Europe and Asia and BMW X3 was besides introduced in these parts, while the demand of high-end theoretical accounts, like 7-series and 5-series was besides turning in emerging China. It was besides of import to work the aggressive UK, the Italian and the Gallic markets. India was besides a new market for BMW where it can present its vehicles*11.
Business Unit Schemes:
This scheme forms the base of the competitory advantage. Basically it deals with the manner a concern competes successfully in a peculiar market. i.e. the strategic determinations about pick of merchandises, run intoing demands of clients, and deriving competitory, development or creative activity of new chances delegated by the corporate degree scheme. ( Johnson, G and Scholes, K. )
To farther illustrate this in item, we will be utilizing a tool, Porter ‘s Generic Strategies, which is shown in figure # 2. BMW followed Cost Leadership and Differentiation schemes, which we will be discoursing one by one.
Figure # 2
Cost Leadership Strategy
This scheme involves deriving competitory advantage being a low cost manufacturer, while seeking to keep the same merchandise or service benefits to those offered by rivals to derive net income and market portion. BMW took different stairss to accomplish this. One of them was to hold fantastic production installations. In fact, BMW was runing some of the most flexible and productive workss in the whole automotive industry. Prime illustration of this was the production installation built in Leipzig ( Germany ) , which was planned to swing from 60 hours per hebdomad to 140 hours per hebdomad, when demand would grew.
Another attack which BMW adopted was to travel production workss in the turning markets, which achieved dual benefits of incorporating the costs along with partial hedge against the currency hazards. Measures were besides taken to increase use of Spartanburg works in the US, where X4 and X5 were being built. A works was besides opened in China. BMW would accomplish dual benefits from this works, one a really qualified labor force and 2nd it would be much cheaper than the West. Another interesting move which BMW adopted was to beginning locally 40 per centum of the parts used in the China plant*12.
This scheme seeks to supply merchandises or services benefits that are different from those of rivals and are widely valued by purchasers. BMW offered its client powerful, dependable and epicurean vehicles. Its engineering had been really advanced. In premium auto market, cardinal demand from clients and critical success factor is dependability and BMW excels in it. The scarcest beginning for its competitory border is, which is a national advantage every bit good, is its work force. Because of this BMW managed to construct perceptual experience of valuable differences in the head of its purchasers. Another difference was the tight control BMW had on its distribution web, supply concatenation and its dealingss with its providers. All these steps resulted in the benefits of effectual trade name direction, communicating and after gross revenues services*13.
BMW ‘s Strategy Evaluation for 2003-2004
We will make BMW ‘s scheme rating, ab initio, by placing the competitory forces utilizing Porter ‘s 5 forces. The theoretical account would so be used to measure the Feasibility and Suitability of BMW ‘s schemes.
Porter ‘s Competitive Forces
The chief intent of a company explicating a competitory scheme, harmonizing to Porter, is associating it to the environment the company competes in ( beginning of competition ) . Hence the cardinal facet of a company ‘s environment is the industry it competes in. Porter farther suggests that the strength of competition within an industry lies deep down in the underlining economic constructions of this peculiar industry and it goes beyond the behaviour of the current competition, such that it depends upon the five forces, which are shown in the undermentioned figure.
Figure # 3
He farther emphasizes that the corporate strength of these forces decide the ultimate net income potency by placing the cardinal structural characteristics to find the cardinal strength and failings, placement, highlight industry ‘s tendency promise and significance. We will be utilizing this position to measure the grounds behind BMW ‘s strategic moves from 2002 to 2004 and to further lucubrate the company ‘s strategic picks and the degree of competition it faced. *14
We will be discoursing these forces one by one.
Menace of New Entrants
. Menaces of new entrants in an industry normally depend on the extent to which there are barriers to entry. New entrants have to get the better of these barriers if they are to vie successfully with the companies already working in this industry. This component is favourable to BMW due to immense initial operating expenses such as the capital demand for fabrication, R & A ; D, selling and distribution. As mentioned above about BMW ‘s scheme to open a joint production and gross revenues venture in China, would be them about $ 480 million and that excessively in merely one state. Now it is really hard for a new participant to put about half a billion dollars for startup alone*15. The cost of entry, maintaining in head, will change from state to state. Globalization can do capital and labour mobilisation a batch easier. The pure illustration of this is the high-skilled labor with low costs in China and India. As mentioned above, this has been capitalized by BMW as an effort to cut down its cost of production to go market leaders. Another barrier to entry for new comers is the economic systems of graduated table. In car industry and in BMW organisation in peculiar, economic systems of graduated table are really of import in bring forthing mass no of cars to cut down the costs of production. The advantages BMW have, will non use to fledglings in the industry. Besides the trade name trueness of clients and providers which BMW enjoys will be really difficult to get the better of by a new comer. BMW sold one million car Mobiles in 2003. This shows the extremely valued repute which has been built by BMW over the years*16. It will be hard for new entrant to vie with such degree of assurance. Customers can easy swear BMW for their vehicles and providers can swear BMW for the immediate purchases and payment.
Dickering power of Buyers
It is fundamentally linked with purchaser ‘s ability to vie with the industry by coercing down monetary values, dickering for higher quality, with rivals playing against each other. Usually purchasers do n’t present a major menace towards BMW, unless bulk orders ( such as orders from authoritiess with specific demands or from different other companies ) come through. BMW trade name is really of import for purchasers for whom quality is the key. Its clients seek merchandise distinction instead than monetary value sensitiveness, which is one of the schemes adopted by BMW.
Advantages/Disadvantages utilizing Evaluation Standard:
Feasibility is concerned with whether or non an organisation has the necessary capablenesss to present a scheme in footings of fundss, resources deployment, and environmental factors. One of the chief schemes for the BMW was to spread out in order to acquire market incursion. BMW was really successful in accomplishing this. BMW achieved the gross revenues of more than 1 million autos in these old ages. It can besides be seen in figure # 4 that BMW overtook Lexus in USA. Its net income borders were besides up.
Table # 1 ( Hand Drawn )
In order to sell more BMW had to bring forth more and to bring forth more it required capital investing. BMW was holding all the fiscal spots to make this. As it can be seen in table # 1 that cars grosss of the BMW Group during the fiscal twelvemonth 2004 increased to euro 42544 million compared to twelvemonth 2003, an addition of euro 4227 million or 10 % over the old year*17. The cars concern normally counts for about three quarters of group ‘s gross revenues. As mentioned earlier, BMW was spread outing its production capablenesss in China for better resource development. This will assist them to bring forth more at lower cost. So, financially, it was executable for them to open this. It is besides apparent from figure # 3 that BMW was placed at the 4th place with regard to net income borders. It besides took over the first topographic point from Lexus in the luxury auto market in United States in footings of gross revenues.
Overall, BMW took all steps to carry through its scheme and it was holding all the needed capablenesss to take these actions.
Figure # 3
Suitability is concerned with the expected public presentation results of a scheme and the extent to which these run into the outlooks of stakeholders in footings of returns and hazards. In other words it ‘s about inquiring that would it work. BMW scheme was to go low cost-producer in the premium auto sector. BMW was able to accomplish this by taking different stairss. It was utilizing its production installations with first-class efficiency. It besides expanded its production and gross revenues installations in these old ages to developing economic systems such as China. These steps took BMW ‘s net income further up.
But the negative side was the quality issues. With immense force per unit area on costs, the hazard of quality oversights would adhere to increase. The effects of quality defects in the premium auto industry could be really terrible. Expanding production installations to other states would do quality control more hard.
BMW ‘s Schemes for 2005-till today
The chief way for scheme in footings of both corporate degree and concern degree, for BMW, remained the same in footings of Ansoff matrix and Porter ‘s generic schemes. In other words, we can state that BMW carried on utilizing bing schemes. Though, there were few add-ons which we will be depicting below.
Corporate and Business Level Schemes:
In footings of Market Penetration and Market Development BMW continued its enterprises started in old old ages. BMW set out a growing policy to increase its gross revenues to 1.8million by 2012 to farther increase its dominance*19. As its hereafter strategic re-alignment BMW besides made some confederations and joint ventures. In July 2008, BMW signed a memoranda for a possible strategic confederation with Fiat Group Automobiles. This memoranda was signed to look at the possibilities of co-operation in MINI and ALFA ROMEO vehicles.
In October 2009, BMW established a joint venture with SGL Group for C fibres and semi-finished fabric merchandises to be used in vehicle building. BMW was be aftering to fabricate more and more cars to accomplish its mark of 1.8millions. Although, it was joint-venture but making this will take off some duty from BMW ‘s shoulders*20.
BMW Diversified its merchandises with some technological inventions. In January 2005, BMW introduced dynamic 4-wheel thrust system to some of its vehicles. By 2012, company decided to present basically altered construct called Progress Activity Sedan ( PAS ) . This will present alone characteristics of BMW sedan*21.
As mentioned in old subdivision, BMW was forcing hard in footings of Product Development to present new theoretical accounts after regular intervals. In the past few old ages, BMW has evolved itself from a group of 6 theoretical account households to a group of 11 theoretical account households. It helped company to acquire the gross revenues of grosss of $ 65 billion in 2006 ( Gumbel, P. , 2007 ) . BMW carried on making this in the coming old ages every bit good.
In 2005, BMW introduced the new BMW 3 series Touring. BMW besides introduced revised version of 7 series, BMW M6, BMW 6 series Coupe and Cabrio theoretical accounts in the same year*22.
From April to June 2007, BMW introduced two new theoretical accounts in the market, BMW M5 Touring and the three-door version of BMW 1 series. In 2008, the company besides introduced BMW 1 series and BMW 3 series convertible*23.
BMW was besides forcing hard for X1, Gran Turismo, MINI SAV, Rolls-Royce Coupe to be launched by 2012*24. A 3-series new design was due to look in 2010 ( Kurylko, D. , 2008 ) .
BMW carried on following its Cost-Leadership scheme. But in the epoch of 2005-2009, it took some strong determinations to cut back its costs to be more profitable, to hold a better hard currency flow because of the terrible economic clime. At some 25 billion Euros, the cost of stuffs is clearly the company ‘s biggest cost factor. BMW group made a scheme to better its costs and public presentations by about 6 billion Euros by 2012. This means that if BMW can cut down its costs by 3 % a twelvemonth it will interpret into one-year potency of 750 million Euros p.a.*25. To farther cut down its cost, BMW decided to construct a 2nd joint venture in China with Brilliance Automotive Holdings Ltd. As mentioned in the old subdivision about the lower labor costs in China, BMW will be able to bring forth 100,000 units, which will non merely assist them in acquiring economic systems of graduated table but it will besides assist them to cut down their costs to their set marks as 40 % of the stuff used in China will be produced locally*26.
BMW ‘s Strategy Evaluation for 2005-till today
Political factors have a great influence on BMW ‘s policies as these factors affect the disbursement power of consumers and other concerns. One such factor was the rise of the VAT from German authorities from 16 % to 19 % , in 2007*27. Now this higher VAT reduces the demand from consumers particularly expensive goods. Initially it did non impact BMW, as it produced record grosss of euro 56,018 million in the twelvemonth 2007, which were the highest in the company ‘s history so far*28.
But as the recession worsened in 2008-2009, like all other industries, car industry went into some serious problems. BMW being in the premium market section was besides affected by it. For 2008, its net income went down to 78.1 % , in like-for-like sale*29. In one-fourth 1 of 2009, its gross revenues volume in USA fell to 25 % . Due to which BMW had to alter its policy of mass production. It decided to cut down its production and increase its prices*30. The state of affairs for car industry went so glooming that German authorities had to step in to protect its whole car industry. The authorities announced that it would supply the fiscal bundle of 1.9 billion Euros to pass the industry*31.
Another factor, which BMW had to see, is the new regulation for CO2 emanation, passed by European parliament in 2008. Harmonizing to this auto shapers had to cut down their fleet mean CO2 emanation to 130 g/km by 2015*32. BMW is one of the innovators in this sphere. Because of the advanced engineering BMW has got, it now focuses on environment friendly engine at the clip of engine design and production*33.
Inflation, income distribution, economic growing and many others economic factors determine the necessities of merchandises and consumer behaviour. BMW had to see these factors both in short and long-run to organize its schemes, because it is really of import for organisations like BMW to accommodate themselves to their ( economic ) environment as no organisation has the ability to alter the universe for its demands ( Wit & A ; Meyer, 2004 ) .
Figure # 4*34
By June 2008, the oil monetary values has reached to its record degree of $ 140 per barrel, puting a immense strain on the universe ‘s economic system, particularly Europe and United States*35. In UK entirely, monetary values reached to ?1.13 per liter, which were the highest since the records began. Harmonizing to the Office of National Statistics, gasoline monetary values were increased by 17 % between twelvemonth 2007-2008, which will be straight passed on to the industries and accordingly to the consumers ( Office for National Statistics, 2009 ) . In malice of the antic recent roar enjoyed by BMW, this affected BMW every bit good. Because like other companies in car sector, its fabrication costs increased. Because of this, as mentioned antecedently, it had to cut down its production and increase its monetary values to acquire a better clasp on the economic system and to accomplish a better liquidness place.
Situation became so worse in UK that Bank of England lowered its involvement rate to 1.5 % in 2009. This was a record lessening since the bank was established in 1694*36. This measure was taken to give assistance to ailing industry. Because this manner, though virtually, clients will experience less hurting while purchasing cars on recognition. Besides, As portion of its stimulus bundle, the German authorities announced that proprietors of autos which are older than 9 old ages could acquire a discount of up to 2,500 Euros if they purchased a new auto which was run intoing certain environmental conditions*37.
BMW have to be careful about societal factors such as life style, instruction, profession etc while doing its policies. BMW trade name is being perceived as high-performance barroom car by the immature and flush European professionals*38, so it has to see above reference factors. BMW did fabulously till 2007. But as the recession worsened, more and more concern went flop, including some major Bankss like Lehman Brothers in America and RBS in UK. As a consequence many people lost their occupations. 5000 people lost their occupations merely in Lehman Brother ‘s London branch*39. Now this is really of import scenario to understand. BMW is a premium auto trade name which is an expensive section of auto industry. If so many high-flyers lose their occupations, it would decidedly bosom premium auto section in general and in peculiar to BMW. This was one of the grounds BMW lost it gross revenues. It was till late 2009, when it saw first addition in its planetary gross revenues.
Besides people now like to purchase green-cars. As mentioned earlier BMW is already maintaining it in consideration while making merchandise development.
In these yearss of globalisation, technological leading is really critical for competitory advantage. In these yearss clients can travel online and can do modular alterations to their preferable manners of vehicles. So BMW must look at its merchandises extensively in footings of engineering with regard to the like of Mercedes and Lexus. Technological invention is at the bosom of BMW policy in these yearss. BMW has got a fantastic BMW Group Research and Innovation Centre, besides known as FIZ. It is located near to BMW ‘s Munich central office. This research Centre is one of the universe ‘s most modern automobile-industry development centres. BMW maintains its place as a planetary technological leader in the car industry by making fantastic inventions. One of those inventions is BMW iPod ( R ) Adapter, which is the first seamless integrating between iPod and a auto sound system. The new system developed by Apple and BMW enables drivers to seamlessly utilize their iPod in BMW ‘s 3 Series, Z4 Roadster, X3 and X5 Sports Activity Vehicles and MINI Cooper by merely stop uping their iPod into a overseas telegram located in the auto ‘s baseball mitt compartment. Such is the technological reputation which BMW has maintained throughout these old ages irrespective of economic activity*40. Being technological leader has ever been an border for BMW to keep its place in the premium auto market.
Advantages and Disadvantages utilizing Evaluation Standards:
BMW has created a strong trade name image in the eyes of its clients. Harmonizing to Interbrand, a taking international trade name consultancy, BMW is the universe ‘s fifteenth best brand*41. A strong trade name image provides a distinguishable competitory advantage in car industry and helps in achieving client. BMW ‘s schemes in this period were executable to some extent because of its trade name image. It was traveling in the right manner till economic downswing. Due to which it had to alter some of its policy which we have already mentioned. But BMW carried on developing new theoretical accounts and technological invention, because it was holding all the needed necessities to develop new theoretical account and to convey out some fantastic invention.
Although BMW subsequently decided to draw down its production, but it was really executable for them to open 2nd works in China, as it will cut down its cost production, which will assist it towards being Cost-Leader in the industry.
BMW operates in different competitory section of car industry. The company ‘s rival includes likes of Mercedes and Lexus. In this intensely competitory environment BMW wanted to turn more and more. So its determination of ( Possible ) strategic confederation with Fiat was a good one and leys suited with its scheme. As this manner, both companies can portion a common home base signifier for some of their merchandises and it will be good to both of them.
BMW besides decided to draw back its production and increase its monetary values one time the recession became worse. This measure was besides in line with the policy of them being most profitable in the industry. Because of decrease in gross revenues in early 2008 BMW has to take this measure. Another measure which BMW took and which wholly suited with being profitable was to take down its costs of every bit much as 750 million Euros per twelvemonth for accomplishing some efficiency additions.
As we have seen from above treatments, strategic planning is really of import for any organisation to accomplish its short and long term ends. Particularly, with the roars and flops of the planetary economic systems in the last few decennaries, it has become even more of import for companies to put to death their schemes carefully. A really of import portion of the scheme is to acquire ready for any future alterations and to be good placed to confront the challenges brought by these alterations. This is why ; scheme should be capable of minimising the menaces and maximising the chances which are brought by the alterations.
BMW trade name has earned the repute of great technology excellence over the old ages. It is coupled with the merchandise developments which has been the basis of BMW ‘s scheme for the past few old ages. In this study, we have identified and evaluated the schemes of BMW for two different periods of times. We discussed the schemes which were brought by Helmut Panke, as the new CEO of the company. We evaluated how good his schemes performed with regard to external environment. In the 2nd portion of the study, we discussed the schemes from 2005 boulder clay today. We particularly mentioned the stairss which BMW took due to the recession. We besides talked about the political and economic factors which BMW had to get by with because of the recession. BMW ‘s gross revenues did travel down but as of today they have started to resile back and company sees itself as one of the best and profitable company in the car industry.
BMW group has got the house committedness to be a planetary participant, which is aided by its regular efforts to farther distinguish its merchandise line, because of which it had been able to make to different markets and therefore different clients, as it merchandises provide value for money ( Brand Image ) . But our chief concern is about BMW ‘s scheme of mass production along with its premium trade name. BMW has to be really careful about it because it has already seen the job with the acquisition of the Rover. Apart from this BMW ‘s competitory advantages will maintain enabling them in the luxury market. In the close hereafter, BMW remains on the top of the game in this sector. Although BMW has set a program to bring forth 5.5 million units till 2012 ( MarketWatch, 2008 ) , but it will hold to reexamine its scheme continuously and while making this it has to be really careful because of the economic alterations. It has besides to be careful from the intense competition of Mercedes, Lexus and other luxury trade names. Because the competition in this section of car industry is really high and one smaller error, which may be either in scheme development or in merchandise development, can hold some long term affects.