Introduction

BMW Group manufactures products under three brands: BMW, MINI and Rolls-Royce Motor Cars. As a worldwide organisation, BMW Group has a long and established heritage of manufacturing premium products. This section offers an overview of the Company.

BMW Group headquarters is located in Munich at D-80778, Munich, Germany .

In 1973, the Viennese architect Karl Schwanzer revealed his design for BMW Group's head office the 'Four-Cylinder'. The building located next to Munich's Olympic Park, is considered an architectural masterpiece.

The corporate logo of BMW

The famous white and blue symbol of BMW stems from the company's origins as aeroplane engine manufacturers.

Many aircraft were painted in regional colours and those of the Bavarian Luftwaffe were the Bayern white and blue.

It is said that the pilot's view through the propeller was one of white and bluealternating segments.

Through the years this image has become stylised into solid quarters of blue and white to declare the identity of today's BMW cars and motorcycles. Since the end of the 1970s BMW has worked to create a standardised international image in terms of statement and presentation so that today whenever people encounter the company's symbols they recognise BMW.

Bayerische Motoren Werke AG  pronunciation (help·info) (English: Bavarian Motor Works), commonly known as BMW, is a German automobile, motorcycle and engine manufacturing company founded in 1917. BMW is headquartered in Munich, Bavaria, Germany. It also owns and produces Mini cars, and is the parent company of Rolls-Royce Motor Cars. BMW produces motorcycles under BMW Motorrad. In 2010, the BMW group produced 1,481,253 automobiles and 112,271 motorcycles across all its brands. BMW is part of the "German Big 3" luxury automakers, along with Audi and Mercedes-Benz, which are the three best selling luxury automakers in the world.

The BMW Group strategy?

At the end of September 2007, BMW Group took on a new strategic direction. Up to the year 2020, BMW Group intends to strengthen its position within the global motor vehicle market by increasing sales to more than two million automobiles per year.

In addition to striving to grow its existing business, the BMW Group will develop new and profitable areas of activity. At the same time, the BMW Group will invest in future technologies, new vehicle concepts and pioneering drive systems.

The new strategy has been given the name Number ONE, standing for 'New Opportunities' and 'New Efficiency'. This means making the best use of new opportunities and becoming more efficient in order to ensure BMW Group's lead over competitors and to actively shape the company's future.

BMW Group's worldwide mission statement is:

"The mission statement up to the year 2020 is clearly defined: the BMW Group is the world's leading provider of premium products and premium services for individual mobility."

There are seven BMW Group sites in the UK:

UK Distribution Centre, Thorne, Lincolnshire BMW (UK) Ltd, Bracknell, Berkshire BMW Financial Services (GB) Limited, Hook, Hampshire Rolls-Royce Motor Cars, Goodwood, West Sussex BMW Plant Hams Hall, near Birmingham BMW Group Plant Oxford, Oxford BMW Group Plant Swindon, Swindon What are BMW Group brands? BMW Group manufactures automobiles and motorcycles worldwide to premium

standards and outstanding quality for all its brands. BMW Group is committed to the very highest in quality for everything it is involved with.

BMWThe BMW brand stands for one thing: sheer driving pleasure. Sporting and dynamic performance combined with superb design and exclusive quality.

MINIThe MINI brand wins hearts and turns heads. MINI is refreshingly different: extroverted, spontaneous and in every respect something out of the ordinary. Ideal for a society that was young, unconventional and ready for change, the MINI Classic became a cult vehicle in the sixties and seventies. Since then the brand has lost none of its youthful charm. MINI is part of a lifestyle that is cosmopolitan and confident, ready for everything.

Rolls–Royce Motor Cars Rolls-Royce Motor Cars has been part of the BMW Group since 1998 and trading

started on January 1, 2003.

Rolls-Royce is one of the most fascinating and well-known brands in the world, the luxury motor car par excellence. For over 100 years, motor cars of the Rolls-Royce brand have stood for truly outstanding engineering, quality and reliability.BMW Group comprises:

23 production and assembly plants in 13 countries 41 sales subsidiaries all over the world 10 locations in the Research & Development network in five countries

BMW Group is one of the ten largest car manufacturers in the world.

Company Profile

Founded in 1917, the BMW Group is now one of the ten largest car manufacturers in the world and, with its BMW, MINI and Rolls-Royce brands, possesses three of the strongest premium brands in the car industry. The group also has a strong market position in the motorcycle sector and operates a successful financial services business. The company aims to generate profitable growth and above-average returns by focusing on the premium segments of the international automobile markets. With this in mind, a wide-ranging product and market offensive was initiated in 2001, which has resulted in the BMW Group expanding its product range considerably and strengthening its worldwide market position. The company’s brand is extremely strong and is associated with high performance, engineering excellence and innovation. Indeed, the BMW brand is often cited as one of the ‘best’ in the world, and the company continues to launch a stream of innovative products as part of its battle with German peer Mercedes to be the world’s largest luxury car maker.

B

BMW’s focus on engineering excellence allied to leading-edge design continues to drive successful, profitable expansion. In 2007 BMW sales increased by 8%, Mini by 18% and Rolls-Royce by 26% with, for the first time ever, over 1000 of the super luxury cars being produced in one year. To further this growth, a host of new models is being launched, including the Mini Clubman and the new sport utility vehicle, the BMW X6 - the world’s first SUV coupe. While the Clubman reinvents views on vehicle access, the X6 is an excellent example of BMW innovation at work. It combines the safety and convenience of a four-wheel-drive with the on-road performance of a sports car and is designed to appeal to the driver who enjoys a commanding driving position, but also savours the characteristics of a sports car. With its stretched coupé silhouette and pronounced performance design, underpinned by hybrid engine options, as previously achieved with the X5 and the X3 in allied markets, the X6 is the latest instance of BMW changing perceptions of what a car should provide – for its passengers and its driver alike. At its heart, it restates an aspiration for driving that is both exclusive and yet also available to the mass market.

BMW has also been at the forefront of introducing new IT options to enhance the driving experience. Starting with the iDrive first introduced in the 7-series, BMW ConnectedDrive is now available across most models and is adding greater functionaility. After being one of the first to offer the capability for MP3 connectivity and incorporate RSS feeds including weather information, in 2007 BMW teamed up with Google to offer a PC driven route

planning service. Of course this level of innovation does not come cheaply and a key challenge going forward will be to keep research and development costs under control. During the last five years, BMW’s average annual R&D investment has been around €2,300 per car, compared with €1,700 spent by arch-rival Mercedes. Alongside the examples above, much of the money has gone into the car maker's Efficient Dynamics programme aimed at making engines more efficient, improving aerodynamics, reducing weight and capturing energy during braking. As the numbers clearly show, BMW is a mass market player but one that successfully uses focused innovation to build and maintain the aspirational driving experience for many. Through a constant stream of consumer informed innovations, the company has moved ahead of its peers and future sustained and profitable growth is widely predicted.

History

BMW was established as a business entity following a restructuring of the Rapp Motorenwerke aircraft manufacturing firm in 1917. After the end of World War I in 1918, BMW was forced to cease aircraft engine production by the terms of the Versailles Armistice Treaty.[6] The company consequently shifted to motorcycle production in 1923, once the restrictions of the treaty started to be lifted,[7] followed by automobiles in 1928–29.[8][9][10]

The first car which BMW successfully produced and the car which launched BMW on the road to automobile production was the Dixi, it was based on the Austin 7 and licensed from the Austin Motor Company in Birmingham, England.

BMW's first significant aircraft engine was the BMW IIIa inline-six liquid-cooled engine of 1918, much preferred for its high-altitude performance.[11] With German rearmament in the 1930s, the company again began producing aircraft engines for the Luftwaffe. Among its successful World War II engine designs were the BMW 132 and BMW 801 air-cooled radial engines, and the pioneering BMW 003 axial-flow turbojet, which powered the tiny, 1944–1945–era jet-powered "emergency fighter", the Heinkel He 162 Spatz. The BMW 003 jet engine was tested in the A-1b version of the world's first jet fighter, the Messerschmitt Me 262, but BMW engines failed on takeoff, a major setback for the jet fighter program until successful testing with Junkers engines.[12][13]

By the year 1959, the automotive division of BMW was in financial difficulties and a shareholders meeting was held to decide whether to go into liquidation or find a way of carrying on. It was decided to carry on and to try to cash in on the current economy car boom enjoyed so successfully by some of Germany's ex-aircraft manufacturers such as Messerschmitt and Heinkel. The rights to manufacture the Italian Iso Isetta were bought; the tiny cars themselves were to be powered by a modified form of BMW's own motorcycle engine. This was moderately successful and helped the company get back on its feet. The controlling majority shareholder of the BMW Aktiengesellschaft since 1959 is the Quandt family, which owns about 46% of the stock. The rest is in public float.

What are the key dates in the history of BMW?

Year Historic Information

1916 BMW formed under name Bayerische Flugzeug-Werke (BFW).

1917

Adopted BMW name and stylised propeller in blue / white segments, the colours of the Bavarian coat of arms.

As a result of war, the small company appreciated rapid growth.

1919 BMW IV six cylinder engine achieved a world record altitude of 9,760m (32,000 ft).

1923 First BMW motorcycle, the R32 twin, is launched.

1928 BMW starts car manufacture.  The first car was an Austin Seven built under licence.

1929

Ernst Henne achieved a world motorcycle speed record of 134 mph on a BMW R37 (pictured).

1933

The 303 (pictured) was BMW's first car powered by a ‘six cylinder’ engine (1.2 litres!). It also had the ‘kidney shaped’ radiator grill - still a typical BMW motif.

1936 The legendary BMW 328 was presented and up to 1940 revolutionised the two litre sport car.

1939 Schorsch Meier won the 1939 Senior TT with the Kompressor BMW.

1939/45 BMW produced the 132 and 801 radial engines for the Focke-Wulf 190 and the BMW 003 gas turbine engine - the first jet to fly in a combat aircraft (Arado 234 and Messerschmitt 262).

1945 BMW lost its Eisenach car plant to the Russian sector. Its Munich plant was heavily damaged (with all worthwhile machinery taken as war reparation).  The company ‘survived’ making pots and pans, spades and bicycles.

1947 Designs for the first post-war BMW motorcycle were ready.

1948 BMW built its first post-war car - BMW 501 six cylinder.

1954

BMW built the 502 V8 (pictured) - Germany's first post-war V8 and takes a licence to build the Isetta 'bubble car'.

1956

BMW launches the 507 (pictured) and 503 four seat convertible and coupe.

1959 BMW in financial crisis.  On the brink of being taken over by Daimler-Benz, small shareholder opposition resisted a 'yes' vote.

1962

The ‘New Class’ BMW 1500 (pictured) 're-launched' BMW as a maker of high quality, sport compact saloons.

1966 A smaller two door range - the 02 - was launched together with a large six cylinder BMW 2500. BMW took over Hans Glas GmbH of Dingolfing - this remains BMW's largest plant and is today run by the son of the founder, Hans Glas.

1969 Redesigned flat-twin BMW motorcycles built at new plant in Spandau, Berlin.

1970 Eberhard V. Kuenheim becomes Chairman of the Board of Management. In his time in this role, BMW developed into a brand of global standing.

1972

Munich HQ four cylinder building opened (pictured).

Second Dingolfing plant opened.

BMW assembly started at Rosslyn, South Africa.

BMW Motorsport GmbH founded.

Start of production of the 5 Series (E12). Electrically powered 2002s led the Munich Olympic marathon.

1973 BMW win European Touring Car Championship and European Championship for F2 cars.

1974

The first European production turbocharged car, BMW 2002 Turbo, is launched (pictured).

1975

The first 3 Series (E21) and the first Art Car byAlexander Calder, is unveiled (pictured).

1976 The 6 Series (E24) and the R100RS Motorcycle, are launched.

1977

The first 7 Series (E23), is launched (pictured).

1978

The BMW M1 is unveiled (pictured).

1980 BMW (GB) Ltd. Formed (renamed BMW (UK) Ltd. In 2005).

1981 The BMW Enduro motorcycle, R80G/S is launched and wins the Paris-Dakar rally.

1983

BMW wins the F1 World Championship. Road engine block M12 engine powering Nelson Piquet's Brabham BT52-BMW is the first turbocharged engine to win the title.

K Series four cylinder bikes launched.

1985 BMW Technik GmbH was set up as a think tank to realise ideas and concepts for the future.

1986 BMW M3 launched, becoming the most successful touring car racer ever.

1987

BMW Z1 - first car developed by BMW Technik GmbH (pictured here).

New BMW Research & Innovation centre - FIZ - officially opened to house 6,000 engineers under one roof.

New 750i powered by first German V12 engine to be produced since 1930s.

1990 BMW 850i launched.

BMW Rolls-Royce GmbH aero engine company founded.

1991 BMW car recycling initiative begins.

BMW E1 electric concept car unveiled.

1992 Construction of plant in Spartanburg, South Carolina begins.

1993

Eberhard von Kuenheim retires after 25 years at the helm of BMW.

Bernd Pichestrieder is new Chairman.

New Boxer R1100RS and F650 motorcycles launched.

1994

BMW acquire Rover Group from BAE.

Introduction of 3 Series Compact.

With the purchase of Rover, BMW take over Oxford plant.

1995 New 5 Series (E39), is launched.

1996

Integration of Rover.

Joint venture with Chrysler to build engines in Brazil.

BMW Z3 Roadster born.

1998 Rover 75 launched. BMW acquires the right to the name Rolls-Royce for cars.

1999

BMW X5, Z8 Roadster and Z9 coupe (pictured) launched.

BMW win Le Mans with V12LMR.

2000

Rover sold to The Phoenix Consortium and Land Rover sold to Ford.

BMW keep MINI brand. BMW C1 offered for sale.

BMW re-enter F1 with BMW WilliamsF1 team (BMW Williams F1 car pictured).

New M3 launched.

CleanEnergy concept accelerated at EXPO 2000.

2001

MINI is launched.

MINI One (pictured) and MINI Cooper go on sale.

New 7 Series revealed.

Opening of Hams Hall.

2002

MINI Cooper S launched. New 7 Series on sale in the UK.

Hydrogen World Tour visits the UK (BMW CleanEnergy hydrogen-powered car pictured).

2003

Assumed marque responsibility for Rolls-Royce Motor Cars.

Launch of Rolls-Royce Phantom (pictured).

Goodwood plant is opened. The MINI One D is launched.

2004

The MINI Convertible, 1 Series, 6 Series Convertible and X3 Sport Activity are launched (BMW 1 Series pictured).

BMW celebrate 3 significant milestones, the 75th anniversary of the BMW badge appearing on a car, the 80th

anniversary of the first BMW sports motorcycle and the 50th anniversary of the BMW light-alloy V8 engine.

2005

The new 3 Series (pictured), 7 Series and M5 are launched.

2006

£17 million BMW Group Academy UK opens (pictured).

BMW manufacturing produces one millionth vehicle.

Second generation MINI launched.

2007

The millionth MINI is delivered (MINI One pictured).

BMW Hydrogen 7 available to selected customers.

The Rolls-Royce Phantom Drophead Coupe is released from Plant Goodwood.

The second generation MINI One and MINI Cooper D are launched.

MINI Clubman goes on sale (from November). 

2008

BMW 118d wins World Green Car of the Year.

BMW EfficientDynamics honoured with environmental awards from What Car? and Fleet News.

Ofsted awards its highest accolade to BMW Group Academy UK.

BMW awarded first prize for Group Sustainable Value Report at the Corporate Responsibility Reporting Awards 2007.

BMW wins International Engine of the Year for fourth consecutive year.

The new X6 is launched.

The new Electric MINI E is unveiled at the Los Angeles Autoshow.

2009 The new BMW Z4 (pictured), X1, 730Ld (7 Series) and the new MINI Convertible is launched.

The new 116d BMW’s most fuel efficient and least polluting vehicle is launched.

BMW Group named as ‘greenest premium manufacturer by Clean Green Cars website and wins accolades at Fleet News Awards 2009 for fuel saving and emission reducing technologies.

BMW scoops honours from Business Car magazine including ‘Manufacturer of the Year’, ‘Green Manufacturer of the Year’, ‘Green Initiative of the Year’ and

‘Executive Car of the Year’ for the BMW 5 Series.

Rolls Royce announces new model series the Rolls Royce Ghost.

MINI celebrates 50 years of production.

BMW launches the New BMW S 1000 RR and the new BMW M3 Coupé.

BMW announces new Concept 5 Series Gran Turismo.

BMW 3 Series is proclaimed Best Fleet Car in the annual Fleet World honours.

BMW Group receives a host of honours at the What Car? Green Car Awards and the Which? Awards 2009.

BMW wins triple victory in the Engine of the Year Awards 2009.

BMW acquired the Hans Glas company based in Dingolfing, Germany, in 1966. It was reputed that the acquisition was mainly to gain access to Glas' development of the timing belt with an overhead camshaft in automotive applications.[14] Glas vehicles were briefly badged as BMW until the company was fully absorbed.

BMW 3-Series (F30)

In 1992, BMW acquired a large stake in California based industrial design studio DesignworksUSA, which they fully acquired in 1995. In 1994, BMW bought the British Rover Group [15] (which at the time consisted of the Rover, Land Rover and MG brands as well as the rights to defunct brands including Austin and Morris), and owned it for six years. By 2000, Rover was incurring huge losses and BMW decided to sell the combine. The MG and Rover brands were sold to the Phoenix Consortium to form MG Rover, while Land Rover was taken over by Ford. BMW, meanwhile, retained the rights to build the new Mini, which was launched in 2001.

Chief designer Chris Bangle announced his departure from BMW in February 2009, after serving on the design team for nearly seventeen years.[16] He was replaced by Adrian van Hooydonk, Bangle's former right hand man. Bangle was known for his radical designs such as the 2002 7-Series and the 2002 Z4. In July 2007, the production rights for Husqvarna

Motorcycles was purchased by BMW for a reported 93 million euros. BMW Motorrad plans to continue operating Husqvarna Motorcycles as a separate enterprise. All development, sales and production activities, as well as the current workforce, have remained in place at its present location at Varese.

In June 2012, BMW was listed as the #1 most reputable company in the world by Forbes.com.[17] Rankings are based upon aspects such as “people’s willingness to buy, recommend, work for, and invest in a company is driven 60% by their perceptions of the company and only 40% by their perceptions of their products.”

BMW AG originated with three other manufacturing companies, Rapp Motorenwerke and Bayerische Flugzeugwerke (BFw) in Bavaria, and Fahrzeugfabrik Eisenach in Thuringia. Aircraft engine manufacturer Rapp Motorenwerke became Bayerische Motorenwerke in 1916. The engine manufacturer, which built proprietary industrial engines after World War I, was then bought by the owner of BFw who then merged BFw into BMW and moved the engine works onto BFw's premises. BFw's motorcycle sideline was improved upon by BMW and became an integral part of their business.

BMW became an automobile manufacturer in 1929 when it purchased Fahrzeugfabrik Eisenach, which, at the time, built Austin Sevens under licence under the Dixi marque. BMW's team of engineers progressively developed their cars from small Seven-based cars into six-cylinder luxury cars and, in 1936, began production of the BMW 328 sports car. Aircraft engines, motorcycles, and automobiles would be BMW's main products until World War II. During the war, against the wishes of its director Franz Josef Popp, BMW concentrated on aircraft engine production, with motorcycles as a side line and automobile manufacture stopped altogether.

After the war, BMW survived by making pots, pans, and bicycles until 1948, when it restarted motorcycle production. Meanwhile, BMW's factory in Eisenach fell in the Soviet occupation zone and the Soviets restarted production of pre-war BMW motorcycles and automobiles there. This continued until 1955, after which they concentrated on cars based on pre-war DKW designs. BMW began building cars in Bavaria in 1952 with the BMW 501 luxury saloon. Sales of their luxury saloons were too small to be profitable, so BMW supplemented this with building Isettas under licence. Slow sales of luxury cars and small profit margins from microcars caused the BMW board to consider selling the operation to Daimler-Benz. However, Herbert Quandt was convinced to purchase a controlling interest in BMW and to invest in its future.

Quandt's investment, along with profits from the BMW 700, brought about the BMW New Class and BMW New Six. These new products, along with the absorption of Hans Glas GmbH, gave BMW a sure footing on which to expand. BMW grew in strength, eventually acquiring the Rover Group (most of which was later divested), and the license to build automobiles under the Rolls-Royce marque.

In 1913 Karl Rapp established Rapp Motorenwerke near the Oberwiesenfeld.[1] Rapp had chosen the site because it was close to Gustav Otto Flugmaschinenfabrik, with whom he had contracts to supply his four-cylinder aircraft engines.[1]

Rapp was sub-contracted by Austro-Daimler to manufacture their V12 aircraft engines. Austro-Daimler at the time was unable to meet its own demands to build V12 Aero engines. The officer supervising aero-engine building at Austro-Daimler on behalf of the Austrian government was Franz Josef Popp. When it was decided to produce Austro-Daimler engines at Rapp Motorenwerke, Popp was delegated to Munich from Vienna to supervise engine quality.[1]

Popp did not restrict himself to the role of observer, becoming actively involved in the overall management of the company. On 7 March 1916, Rapp Motorenwerke became Bayerische Motoren Werke GmbH.[2] Popp convinced Karl Rapp to accept the application of Max Friz, a young aircraft engine designer and engineer at Daimler. At first Rapp was going to turn down Friz’s request; however, Popp successfully intervened on Friz’s behalf, because he recognized that Rapp Motorenwerke lacked an able designer. Within a few weeks Friz designed a new aircraft engine which, with an innovative carburettor and a variety of other technical details, was superior to any other German aero-engine. Later, this engine would gain world renown under the designation “BMW IIIa”.[citation needed]

Bayerische Motoren Werke GmbH 1917

The departure of Karl Rapp in 1917 enabled a fundamental restructuring of BMW GmbH, formerly Rapp Motorenwerke. While the development side was placed under Max Friz, Franz Josef Popp took over the post of Managing Director. Popp held this key position until his retirement in 1942, and was instrumental in shaping the future of BMW.

For the small BMW business, the large orders received from the Reichswehr for the BMW IIIa engine were overwhelming. Under Karl Rapp only a small number of engines had been produced and the manufacturing facilities were not in any way adequate to handle the mass production now required. Not only did BMW lack suitable machine tools but, to a very large degree, skilled manpower as well. However, the most serious drawback was in the small and aging workshops. Nevertheless, under the state-controlled war economy, officials in the relevant ministries were able to give BMW extensive practical support.[3] So in a short time BMW got the skilled workers and machinery it needed. In addition, the Munich company received a high level of financial assistance, which enabled it to build a completely new factory from the ground up, in the immediate vicinity of the old workshops. Due to the share capital being too small, both the building of the new plant and the working capital needed for materials and wages had to be financed with external funds, i.e. bank loans or state assistance. The war ministries of Bavaria and Prussia (then both separate kingdoms within the Kaiser’s Empire) did not, however, wish to go on supporting BMW with loans and guarantees, and therefore urged the flotation of a public limited company.

The name-change to Bayerische Motoren Werke compelled management to devise a new logo for the company, therefore the famous BMW trademark is designed and patented at this time. However, they remained true to the imagery of the previous Rapp Motorenwerke emblem (which was designed by Karl's brother, Ottmar Rapp). Thus, both the old and the new logo were built up in the same way: the company name was placed in a black circle, which was once again given a pictorial form by placing a symbol within it. By analogy with this, the blue and white panels of the Bavarian national flag were placed at the center of the BMW logo. Not until the late 1920s was the logo lent a new interpretation as representing a rotating propeller.[5] The BMW Trademark, called a "roundel", was submitted for registration

on the rolls of the Imperial Patent Office, and registered there with no. 221388 on 10 Dec 1917.[citation needed]

BMW AG

In 1917 Julius Auspitzer’s son-in-law, Max Wiedmann, held about 80 percent of the shares in Rapp Motorenwerke. He had obtained most of these shares from his father-in- law in 1914 and had thus become a figure of great influence in the business. Even after the name-change to Bayerische Motoren Werke GmbH, Wiedmann remained the principal shareholder in the company. Wiedmann’s capitulation in July 1918 opened the way for the founding of a public limited company. On 13 August 1918 BMW AG was entered as a new company in the Commercial Register and took over from BMW GmbH all its manufacturing assets, order book and workforce.[6] The old BMW GmbH was renamed "Maschinenwerke Schleißheimerstrasse" and was wound up on 12 November 1918. The share capital of BMW AG amounting to 12 million reichsmarks was subscribed by three groups of investors. One third of the shares was taken up in equal parts by the Bayerische Bank and the Norddeutsche Bank. A further third of the shares (worth 4 million reichsmarks) was acquired by the Nuremberg industrialist, Fritz Neumeyer. This ensured that 50 percent of the capital (6 million reichsmarks) was in the hands of Bavarian businesses or banks. The Bavarian government placed the highest value on this strong local shareholding. The final one-third of the BMW shares were taken up by a Viennese financier, Camillo Castiglioni.[3]

Castiglioni

Main article: Camillo Castiglioni

During the war, Castiglioni had been one of the principal players in the Austro-Hungarian aircraft industry, and for a long time had had links with Rapp Motorenwerke. So he had probably already been influential in negotiating the major order from Austro-Daimler Motoren to Rapp Motorenwerke in 1916 and would have received a large commission on this. However, Castiglioni’s interests were not restricted to Austria. As early as 1915, by merging a number of companies, he had founded Brandenburgische Flugzeugwerke in the Berlin area, which supplied aircraft to the German navy. It seemed only logical that he would want to extend his network of companies by adding a German aero-engine manufacturer.

First crisis for BMW AG – WWI aftermath

Winter 1918 factory closure

This section does not cite any references or sources. Please help improve this section by adding citations to reliable sources. Unsourced material may be challenged and removed. (June 2010)

The end of the war in November 1918 had a huge impact on the entire German aircraft industry. Since 1914 the military had been placing lucrative orders with aircraft and aero-engine firms. But now, military demand collapsed completely. Civil aviation was still in its infancy, and no substitute business could be expected from that quarter. The end of the war

hit BMW particularly hard, since the BMW IIIa aero-engine was the only product the company was building in 1918, and suddenly there was no more demand for aircraft engines.

In order to enable companies to resume civil production as rapidly as possible, a central demobilization office was set up as soon as the war was over, and branches opened right across Germany. The Commissioner for Demobilization with responsibility for Bavaria ordered the closure of BMW’s Munich plant with effect from 6 December 1918.[3] The employees of the fledgling company faced locked factory gates and a future that was far from certain. The reason given by the civil servants for this factory closure was the general shortage of raw materials such as coal and metals. The small supplies of coal that were still on hand had to be made available for the freezing population, and such supplies of metals as remained were diverted to consumer industries. As a former armaments manufacturer, BMW was sent away empty-handed.

Factory reopened

BMW’s top management was not discouraged by the compulsory closure decreed by the government. When permission was given for the gates to re-open on 1 February 1919, Managing Director Franz Josef Popp got the design department working constantly in order to have new products ready to sell to the peacetime market. Engines were designed for boats, cars, trucks and motorcycles. From the outset, BMW tried to remain an engine manufacturer. At the same time it also supplied industrial customers with products from its aluminum foundry.[citation needed]

In 1919 BMW was forced to give up building aircraft engines completely, which it had initially continued on a modest scale. The Allies had banned Germany from building aircraft and aircraft engines, and in addition had demanded that all aviation assets manufactured up to that date should be handed over or destroyed.[7] While the new BMW engines for civilian use were technically advanced, they could not provide the company with long-term security in a highly competitive market. The top management therefore began looking for alternatives.[citation needed]

On 18 June 1919, BMW obtained a license agreement for the production of brake assemblies with the Berlin-based company Knorr-Bremse AG. The contract was to run for ten years and was intended to provide BMW with employment and profits until 1930. At that time, Knorr-Bremse manufactured state-of-the-art pneumatic brakes for trains and had the benefit of large, long-term contracts, which it could not, however, handle at its own factory. For this reason the Berlin company was looking for a manufacturer to license – and found it in Munich. One advantage BMW had in negotiating the contract was the announcement by the Bavarian government that they would be prepared to fit Bavarian trains with Knorr brakes provided they were manufactured in Bavaria.[citation needed]

Company sold to Knorr-Bremse

This section does not cite any references or sources. Please help improve this section by adding citations to reliable sources. Unsourced material may be challenged and removed. (June 2010)

From the summer of 1919 onward, the manufacture of pneumatic brakes increasingly overshadowed engine production. The brake business occupied the majority of the BMW workforce, which was once again being expanded. This reorientation of the BMW product range had an effect on the ownership structure. As soon as the war ended, most of the BMW shareholders had lost interest in the company. Only the major shareholder Camillo Castiglioni still believed at first that BMW had a future, and took up all the company shares himself. However, Castiglioni was not an entrepreneur who took the long view; he was an astute financier in search of a quick return. The manufacture of railway brakes provided an opportunity to build up a solid business with sure profits, albeit small ones – too small for Castiglioni. In August 1920, when the chairman of Knorr-Bremse AG, Johannes Vielmetter, offered to buy all of Castiglioni's shares in BMW, the Viennese speculator accepted. BMW was now wholly owned by the Knorr-Bremse company of Berlin. The new proprietors made only minor alterations to the structure of BMW, since they wished neither to change the management nor to get involved in the production process.

Return of Castiglioni and merger with BFw

Under the leadership of Knorr-Bremse, BMW’s growth was considerable. Between the end of 1918 and 1921 the workforce grew from 800 to 1,800. In addition, the company set up its own training program with classes at the factory. In this way, in 1921 alone, BMW was able to offer solid technical training to some 200 young people. However, the price for this comfortable commercial situation was dependence on Knorr-Bremse and the abandonment of its core business of building aircraft engines.[citation needed]

In 1922, Castiglioni offered to buy BMW's engine-building division, aluminum foundry, name, and trademark from Knorr-Bremse. Castiglioni declared that he intended to set up an engine manufacturing plant of his own, and so he asked for the drawings, patents and machine tools needed for manufacturing the engines. He also wanted to take with him to his new company several key figures such as the chief designer, Max Friz, and the chief executive, Franz Josef Popp. The remainder of the company, including the premises, would remain under Knorr-Bremse's ownership and would be renamed. His offer of 75 million reichsmarks was accepted by Knorr-Bremse and, upon the contract being signed on 20 May 1922, the BMW engine-building business was once again in Castiglioni’s hands, while the remainder of the company became a subsidiary of Knorr-Bremse and was renamed Südbremse AG.[citation needed]

Castiglioni did not purchase BMW's premises in its transaction with Knorr-Bremse. Instead, he merged his Bayerische Flugzeugwerke (BFw) into BMW and established BMW's factory and headquarters at BFw's premises. BMW was moved into the same buildings of Gustav Otto's former Otto-Flugzeugwerke on Lerchenauer Strasse 76. BMW's headquarters have been at that address ever since.[1][8][9][10]

BMW, with some 200 workers housed in the former BFw's old wooden sheds, began production on a modest scale. Initially its output was BFw motorcycles, proprietary engines, and spare parts for aircraft engines. To begin with, business for the “new” BMW AG did not go particularly well. The market for proprietary engines was still as hotly contested in 1921 as it had been in 1919 when BMW had gone into brake manufacture to secure its long-term future.[citation needed]

In 1923, while Germany suffered through a year of runaway inflation and numerous attempted coups, BMW made a successful new start: the company resumed production of aviation engines, selling them mainly to the Soviet Union, and it launched the first motorcycle of its own design, the R32.[citation needed]

R32 motorcycleMain article: History of BMW motorcycles

R32: the first BMW motorcycle

At the German Motor Show in Berlin (September 28 – October 7, 1923) BMW exhibited the R32 to the public for the first time. The first motorcycle from BMW convinced the experts immediately, and was an instantly popular product with consumers. A comment in the magazine DER MOTORWAGEN read: "And finally, the culmination of the exhibition, the new BMW motorcycle (494 cc) with the cylinders arranged transversely. Despite its youth it is a remarkably fast and successful motorcycle."

In 1924 BMW built its first model motorcycle, the R32. This had a 500 cc air-cooled horizontally opposed engine, a feature that would resonate among their various models for decades to come, albeit with displacement increases and newer technology. The major innovation was the use of a driveshaft instead of a chain to drive the rear wheel. To this day the driveshaft and boxer engine are still used on BMW motorcycles.

Automobiles

Austin-licensed BMW Dixi

BMW's first automobile, the BMW Dixi

BMW’s automobile history had begun much earlier than 1924, if only in the form of proposals and prototypes. Correspondence dating back to 1918 shows the first use of the term “automobile” in BMW history. But no details, let alone images have come down to us regarding this fourwheeled primogenitor. Subsequently, BMW manufactured various built-in motors with four and two cylinders that powered a wide variety of agricultural vehicles in the early 1920s. The spectrum of machinery driven across the land by BMW units ranged from single-track cars to huge farm tractors. Around 1925 two specially hired BMW designers, Max Friz and Gotthilf Dürrwächter, both former employees of Daimler-Benz in Stuttgart, were commissioned by BMW’s Managing Director Franz Josef Popp to design a BMW production car. From this first, demonstrably operational BMW car – though as yet lacking any bodywork, BMW laid the groundwork for one of the world's most respected manufacturer of automobiles.

Success for BMW in this industry came from an already proven source-the Seven. In 1927 the tiny Dixi, an Austin Seven produced under license, began production in Eisenach. BMW bought the Dixi Company the following year, and this became the company's first car, the BMW 3/15.

BMW designs its own cars

Towards the end of 1930, BMW attempted to introduce a new front axle with independent wheel suspension for both their models, the BMW 'Dixi' 3/15 DA4 and BMW 'Wartburg' DA3, but this resulted in accidents with the prototypes because of construction faults.[11] However, as the license with Austin would end in 1932, BMW decided upon the development of a completely new model and called in the help of German engineer Josef Ganz. He was hired as a consultant engineer at BMW in July 1931. At first, Josef Ganz negotiated with BMW about possible manufacture of his innovative rear-engined Maikäfer prototype at BMW. However, BMW decided for a different model, more along the lines of the previous Dixi model. Therefore, with the assistance of Ganz, work started on the development of the BMW AM1 (Automobilkonstruktion München 1), a small car with a front-mounted engine, rear-wheel drive, and independent wheel suspension with swing-axles.

Six-cylinder cars

BMW 303

In 1933, BMW introduced the 303.[12][13] Larger and more conventional than the AM-series 3/20, the 303 used BMW's new M78 engine, making it the first BMW automobile to use a straight-six engine.[13][14] The 303 was also the first BMW to use the "kidney grille" that would become a characteristic of BMW styling.[15] The 303 formed the basis for the four-cylinder 309 and the larger-engined 315 and 319,[16][17] while the 303 chassis supported the 315/1 and 319/1 roadsters [16] [18] and the restyled 329.[19]

The 303 platform was supplemented and later supplanted by the 326, a larger car with a more rigid frame. Introduced in 1936, the 326 was BMW's first four-door sedan.[20][21] A shortened version of the 326 frame was used in the 320, which replaced the 303-framed 329, in the 321, which replaced the 320, and in the 327 coupé.[22][23]

BMW 328 Brescia Grand Prix coupé

The 328 replaced the 315/1 and 319/1 roadsters in 1936. Unlike the 303-based 315/1 and 319/1, the 328 had a purpose-built frame.[19] While the 315/1 and 319/1 had M78 engines in a higher state of tune than in the respective 315 and 319 sedans,[24] the 328's M328 engine had a specially-designed hemispheric cylidner head and other modifications that brought its power to 80 PS (59 kW).[25] From its introduction at the Eifelrennen race at the Nurburgring in 1936, where Ernst Henne drove it to win the 2.0 litre class,[19][26] to the overall victory of Fritz Huschke von Hanstein at the 1940 Brescia Grand Prix during World War II,[27][28] the 328 was a legendary performer, with more than 100 class wins in 1937 alone.[29]

An extended version of the 326's frame was used in the 335, a luxury car with the 3.5   litre M335 engine.[30] The 335 was built from 1939 to 1941.[31]

World War II

BMW 801 radial engine

The German invasion of Poland and commencement of hostilities meant that manufacturing facilities in Germany were directed by the Nazi regime to re-focus on the manufacture of products required to support the war effort. For BMW, that meant an emphasis on production of aero (airplane) engines. Josef Popp argued against this, contending that, although financially lucrative, the change in focus would mean that the BMW AG would be heavily dependent on decisions made by the Nazi regime. In June 1940, he wrote to the Chairman of the Supervisory Board, Emil Georg von Stauss, explaining that the situation could “threaten the very existence of BMW AG if there were any setback to aero engine production”.[4] This change in focus did in fact lead to a significant increase in external control from political and military agencies, weakening the position of the BMW management and eroding the position of Franz Josef Popp, whose leadership of BMW had been relatively autonomous and autocratic to that point. Statutes enacted on October 1, 1940 required all subsidiaries to transfer profit and loss responsibility to BMW AG. Expansion of the aero engine business required several injections of capital to Flugmotorenbau GmbH, with the total capitalization of BMW AG increasing in stages to RM 100 million by 1944. Further restructuring was carried out in 1944, with centralization of sales in BMW AG and the GmbHs acting only as property companies.

BMW R75 military sidecar outfit

The emphasis on aero engines caused significant changes in BMW AG's business. Motorcycle production located at the Munich manufacturing facility abandoned production of non-military motorcycles by 1940, producing only the R12 and the R75, which were supplied to the Wehrmacht. At the beginning of 1942, motorcycle production was transferred to Eisenach so that the Munich plant could be dedicated to aero engine fabrication, and in 1942, BMW abandoned motorcycle production altogether. BMW also ceased production of automobiles in 1940, since cars were not being produced for the military. Only automobile repair facilities were retained, along with a development department.

BMW 003 jet engine

A wide range of aero engines was ultimately produced for the Luftwaffe, including one of the most powerful engines of the time – the BMW 801. Over 30,000 aero engines were manufactured through 1945, as well as over 500 jet engines such as the BMW 003. To enable this massive production effort, forced labor was utilized, consisting primarily of prisoners from concentration camps such as Dachau.[32] By the end of the war, almost 50% of the 50,000-person workforce at BMW AG consisted of prisoners from concentration camps.

BMW AG plants were confiscated by Allied troops at the end of the war, and production of aero and jet engines for the Luftwaffe was shut down.

Second crisis for BMW AG – WWII aftermath

1954 BMW 502 V8 Super

The acclaimed 1956 BMW 507

BMW AG was heavily bombed towards the end of the war, reducing most of the company's production facilities to rubble. In fact, by the end of the war, the Munich plant was completely destroyed.[33] Of its sites, those in eastern Germany (Eisenach-Dürrerhof, Wandlitz-Basdorf and Zühlsdorf) were seized by the Soviets. After the war the Munich factory took some time to restart production in any volume. BMW was banned from manufacturing for three years by the Allies and did not produce a motorcycle, the R24, until 1948, and a car model until 1952. During the three-year ban BMW used scraps and what resources they had available to manufacture bicycles and kitchen supplies.

In the east, the company's factory at Eisenach was taken over by the Soviet Awtowelo group which formed finally the Eisenacher Motor-Werke. That company offered "BMWs" for sale until 1951, when the Bavarian company prevented use of the trademarks: the name, the logo and the "double-kidney" radiator grille.

The cars and motorcycles were then branded EMW (Eisenacher Motoren-Werke), production continuing until 1955.

BMW Isetta- sales of this car saved the company in post WWII Germany

In the west, the BAC, Bristol Aeroplane Company, inspected the factory, and returned to Britain with plans for the 326, 327 and 328 models. These plans, which became official war reparations, along with BMW engineer Fritz Fiedler allowed the newly formed Bristol Cars to produce a new, high-quality sports saloon (sedan), the 400 by 1947, a car so similar to the BMW 327 that it even kept the famous BMW grille.

In 1948 BMW produced its first postwar motorcycle and in 1952 it produced its first passenger car since the war. However, its car models were not commercially successful; models such as the acclaimed BMW 507 and 503 were too expensive to build profitably and were low volume.

By the late 1950s, it was also making bubble-cars such as the Isetta.

Third crisis for BMW AG – a company for sale

BMW 1602

By 1959, BMW was in debt and losing money.[34] The Isetta was selling well but with small profit margins.[35] Their 501-based luxury sedans were not selling well enough to be profitable and were becoming increasingly outdated.[36] Their 503 coupé and 507 roadster were too expensive to be profitable.[36] Their 600, a four seater based on the Isetta, was selling poorly.[37] The motorcycle market imploded in the mid-1950s with increased affluence turning Germans away from motorcycles and toward cars.[38] BMW had sold their Allach plant to MAN in 1954.[39] American Motors and the Rootes Group had both tried to acquire BMW.[40]

At BMW's annual general meeting on 9 December 1959, Dr. Hans Feith, chairman of BMW's supervisory board, proposed a merger with Daimler-Benz. The dealers and small shareholders opposed this suggestion and rallied around a counter-proposal by Dr. Friedrich Mathern, which gained enough support to stop the merger.[35][40] At that time, the Quandt Group, led by half-brothers Herbert and Harald Quandt, had recently increased their holdings in BMW and had become their largest shareholder.[40] By the end of November 1960, the Quandts owned two-thirds of BMW's stock between them.[34]

By this time BMW had launched the 700, a small car with an air-cooled, rear-mounted 697 cc boxer engine derived from the engine powering the R67 motorcycle. It was available as a 2-door sedan and as a coupe, both versions having been designed by Giovanni Michelotti.[41] There was also a more powerful RS model for racing.[42]

At the Frankfurt Motor Show in 1961, BMW launched the 1500, a compact sedan with front disc brakes and four-wheel independent suspension.[43] This modern specification further cemented BMW's reputation for sporting cars. It was the first BMW to officially feature the "Hofmeister kink", the rear window line that has been the hallmark of all BMWs since then.[citation needed]

The "New Class" 1500 was developed into 1600 and 1800 models.[44] In 1966, the two-door version of the 1600 was launched, along with a convertible in 1967. These models began the '02' series, of which the 2002 was the best known, and which was continued until 1976 when it was replaced by the BMW 3 Series.[45]

By 1963, with the company back on its feet, BMW offered dividends to its shareholders for the first time since World War II.[46]

Expansion- Hans Glas GmbH

München, BMW Autowerk, 1968

By 1966, the Munich plant had reached the limits of its production capacity. Although BMW had initially planned to build an entirely new factory, the company bought the crisis-ridden Hans Glas GmbH with its factories in Dingolfing and Landshut. Both plants were restructured, and in the following decades BMW's largest plant took shape in Dingolfing.

BMW 5 series (E12)

In 1968, BMW launched its large "New Six" sedans, the 2500, 2800, and American Bavaria, and coupés, the 2.5 CS and 2800 CS.

Of major importance to BMW was the arrival of Eberhard von Kuenheim from Daimler-Benz AG. Just 40 years old, he presided over the company's transformation from a national firm with a European-focused reputation into a global brand with international prestige.

Already commercially successful by the mid 60s, in December 1971, BMW moved to the new HQ present in Munich, architecturally modeled after four cylinders.

In 1972, the 5 Series was launched to replace the New Six sedans, with a body styled by Bertone. The new class coupes were replaced by the 3 Series in 1975, and newly introduced larger sedans became the 7 Series in 1977. Thus the three-tier sports sedan range was formed, and BMW essentially followed this formula into the 1990s. Other cars, like the 6 Series coupes that replaced the CS and the M1, were also added to the mix as the market demanded.

From 1970 to 1993, under von Kuenheim, turnover increased 18-fold, car production quadrupled and motorcycle production tripled.

Rover

The Rover 75, the only new Rover released under BMW

Between 1994 and 2000, under the leadership of Bernd Pischetsrieder, BMW owned the Rover Group in an attempt to get into mass market production, buying it from British Aerospace. This brought the active Rover, Mini and Land Rover brands as well as rights to many dormant marques such as Austin, Morris, Riley, Triumph and Wolseley under BMW ownership.

The venture was not successful. For years, Rover tried to rival BMW, if not in product, then in market positioning and "snob appeal". BMW found it difficult to reposition the English automaker alongside its own products and the Rover division was faced with endless changes in its marketing strategy. In the six years under BMW, Rover was positioned as a premium automaker, a mass-market automaker, a division of BMW and an independent unit. A five part BBC documentary, When Rover Met BMW (1996), gave some insight into the difficulties faced by the two firms.[47]

BMW was more successful with the Mini, MG and Land Rover brands, which did not have parallels in its own range at the time.

In 2000, BMW disposed of Rover after years of losses, with Rover cars going to the Phoenix Venture Holdings for a nominal £10 and Land Rover going to the Ford Motor Company. The German press ridiculed the English firm as "The English Patient", after the film. BMW itself, protected by its product range's image, was largely spared the blame. Even the British press was not particularly sympathetic towards Rover.

BMW retained the rights to Mini, Triumph and other marques. MINI has been a highly successful business, though the other names have not been used yet. Following the bankruptcy of MG Rover in 2005, the Rover name was sold to Ford in 2006 after BMW gave it a first refusal offer in 2000. However, Ford did not release any Rover-badged cars before selling the name to Tata Group, while the MG brand has been relaunched by Nanjing Automobile of China.

Redesign controversy

In the early 2000s, BMW undertook another of its periodic cycles of redoing the design language of its various series of vehicles, under the auspices of newly promoted design chief Christopher Bangle. These controversial[who?] designs often featured unconventional proportions with complex concave and convex curved surfaces combined with sharp panel creases and slashes, a design cue called "flame surfacing".[this quote needs a citation] Much of the new language did not rest well with BMW enthusiasts or the automotive press which referred to the new designs as "Bangled" or "Bangle-ised".[this quote needs a citation] Although Bangle did not pen all of the new designs himself, as the design chief he was ultimately responsible for the direction that the company took and thus received much of the criticism. As Bangle has now been promoted within the company to the BMW Group Head of Design, leaving him in charge of not only BMW but also Rolls-Royce and Mini, some[who?] questioned what long term effect the disaffection of BMW traditionalists[clarification needed] for these designs will have on sales, and on the company's future. Sales at BMW have increased every year since some of his most debated designs have gone into production.[citation needed]

Many aspects of the "controversial" designs are now beginning to surface in other auto manufacturer's designs.[citation needed] Though the design debuted and was popularized by BMW's 7-Series, Hyundai incorporated this design cue in 1999, three years before the 7-Series was released, and Maybach incorporated it since its first showing in 1997.

Bangle was also responsible for many 'conservative' BMW designs and has worked at BMW for almost a decade. The first X5 sketches (which closely resembled the production car), were designed by him, and under his tenure the E46 3 Series came to be. Despite much of the scorn heaped on Chris Bangle, his design selections were approved by the entire executive board of BMW AG, including the majority owners, the Quandt family.[citation needed] BMW's design team has won numerous awards with him at the helm.

Production outside Germany

BMW's Rosslyn, South Africa, plant was the first BMW assembly line established outside Germany, with production starting in 1973.[48] The wholly owned subsidiary now exports over 70% of its output.[citation needed] In the mid-1990s, BMW invested R1bn to upgrade the Rosslyn factory. The plant now exports over 50,000 3 Series cars a year[citation needed], mostly to the USA, Japan, Australia, Africa and the Middle East.

BMW started producing automobiles at its Spartanburg, South Carolina, plant in 1994. Today, the plant manufactures the BMW X5 and the BMW X6. The production of the BMW X3 will be moving to Spartanburg from Europe after the completion of a major expansion of the U.S. facility.

The Spartanburg plant is open six days a week, producing automobiles approximately 110 hours a week. It employs about 4,700 people and manufactures over 600 vehicles daily. Recently, the plant has undergone a major renovation switching from 2 production lines down to one. Both the X5 and the X6 are produced in the same line, one right after the other.

Outside Germany, the largest output of the BMW Group comes from British factories. The Hams Hall plant manufactures four-cylinder BMW engines for use around the world in 3-

Series, 1-Series and Z4 vehicles. This is in addition to MINIs and Rolls-Royces made in Oxford and Goodwood.

BMW signed agreement in 1999 with Avtotor to produce cars in Kaliningrad, Russia. Factory has been assembling 3 and 5 -series cars.[49]

Starting from October 2004, BMWs intended for the Chinese market are produced in Shenyang, China.[50] BMW has established a joint venture with Chinese manufacturer Brilliance to build BMW 3 Series and 5 Series that have been modified for the needs of local markets.

The BMW X3 was manufactured in Graz, Austria between 2004 and 2007 by Magna Steyr with mainly German components. The X3 production will be moved to the Spartanburg plant due in part to high production and transportation costs of what was meant to be the "more affordable" SUV. North American pricing, after said costs, were nearly on par with the larger, American-built X5.[51]

In 2005, BMW Group built a new manufacturing facility in Egypt. This plant builds 3 Series, 5 Series, 7 Series, and X3 vehicles for the African and Middle East markets.

BMW opened its first assembly plant in Chennai, India in March 2007 to assemble 3-series and 5-series vehicles. The 20 Million Euro plant aims to produce 1,700 cars per year in the medium term, though this could rise to up to 10,000 cars if demand grows.[52] The new factory may also be used to help boost the production of BMW’s super-successful MINI.[53] BMW India headquarters is located in Gurgaon outside Delhi.

Rolls-Royce

In the early 1990s, BMW and Rolls-Royce Motors began a joint venture that would see the new Rolls-Royce Silver Seraph and Bentley Arnage adopt BMW engines.

In 1998, both BMW and Volkswagen tried to purchase Rolls-Royce Motors. Volkswagen outbid BMW and bought the company for £430 million, but BMW outflanked its German rival. Although Volkswagen had bought rights to the "Spirit of Ecstasy" mascot and the shape of the radiator grille, it lacked rights to the Rolls-Royce name. Rolls-Royce plc (the aero-engine business) retained the rights over the Rolls-Royce trademark and wished to strengthen its existing business partnership with BMW which extended to the BMW Rolls-Royce joint venture. Consequently, BMW was later in 1998 allowed to acquire the rights to use the name "Rolls-Royce and "RR" logo on cars for £40 million.

In a separate deal BMW agreed to let Volkswagen use the name "Rolls-Royce and "RR" logo on cars until 2003 on condition that BMW would get the right to the grille and mascot from 2003, onwards.

BMW supplied the engines to the current Seraph/Arnage range and their supply contract had a clause that allowed BMW to stop the supply of engines the day another owner, (than then Vickers plc), took over the company. BMW could effectively stop Volkswagens Seraph/Arnage production. This might have biased the deal.

Anyway, Volkswagen was permitted to build Rolls-Royces with all three trademarks at its Crewe factory only until 2003, but quickly shifted its emphasis to the Bentley brand. BMW would have all the three key trademarks in 2003.

In the meantime, BMW was faced with the need to build a new factory and develop a new model. The new factory at Goodwood produced the new Rolls-Royce Phantom, unveiled on January 2, 2003, and officially launched at the Detroit Auto Show on January 5, 2003. The model, priced around US$330,000, has experienced record sales worldwide of 796 Phantoms sold in 2005.

Current Position

BMW becomes No. 1 luxury car maker in India

It's time for the iconic Mercedes Benz to bow out as the number one luxury car brand in India. BMW is the new market leader in the luxury segment, as it has achieved leadership position in the country by increasing its market share to over 40 per cent.

BMW India increased its market share in the luxury segment of the Indian automotive market to over 40% in 2009 (from 9% at the end of 2006). With 3,619 cars delivered to customers in the calendar year 2009, BMW India has achieved the "highest sales by a manufacturer in the luxury car segment in a year" till date.

The company's top selling model in 2009 has been the BMW 3 Series at 1,155 units, while the second best seller has been the 5 Series at 1,590 units. Despite the initial challenges, no other country has shown the kind of growth that India has shown for the German carmaker.

Commenting on the occasion, Peter Kronschnabl, president, BMW India said, "We made great strides in implementing our strategy, and this gave us a significant competitive edge that provided us with a clearly formulated vision. Our goals were clear, and we had to be consistent to realize them. Our business activities are, and will remain, focused on the long term.  The main trends that are relevant to our business - such as the demand for mobility and the desire for differentiation - will remain unchanged."

2009 was not an easy year for the automotive industry - and that applies equally to BMW India. It stood its ground in a fiercely competitive environment with new ideas and the strength to promote new products. BMW India was prepared to meet the challenges head on to ensure the company's success. These qualities enabled BMW India to effectively weather the stormy conditions, continue to invest in its future, anticipate trends and be prepared for the future. Despite all challenges, BMW India delivered strong operating performance in 2009.

With a carefully planned and successfully executed market entry strategy, and consistent sales performance, BMW India achieved market leadership in the luxury car segment in India. Kronschnabl further added, "Now more than ever, we see that the number one position in the market is not everything. But, the future belongs to India and if you want to benefit from the dynamics of the Indian market later, you need to act today. This is what we did. Our commitment to India was among the strategic decisions that had to be taken right away."

BMW group took a bold step in its Asia strategy in 2007 by establishing the BMW India headquarters in Gurgaon (National Capital Region), a Central Parts Warehouse in Mumbai, and the BMW Plant Chennai in Tamil Nadu. Presently, the BMW Plant Chennai produces the BMW 3 Series and BMW 5 Series sedans in petrol and diesel variants and has a capacity to produce 3,000 units per year on a single shift basis. In medium term, BMW India has employed around 200 people; up to 600 additional jobs have been created in the dealer and service network. Presently, BMW India is present at 16 locations in the Indian market.

Market Share

About Us.

The UK has an important role to play within the BMW Group. It is the only place in the world where all three of BMW Group’s brands – BMW, MINI and Rolls-Royce Motor Cars – are represented by manufacturing operations.

The growth of BMW Group’s UK operations has been significant. MINI Plant Oxford, the heart of MINI production, began producing MINIs in 2001 and has now produced over two million. BMW Plant Hams Hall started producing 4-cylinder petrol engines in 2001. Rolls-Royce Motor Cars Limited began manufacturing vehicles at its Goodwood plant in 2003. MINI Plant Swindon has been the main supplier of MINI body panels since 2005.

In addition to our manufacturing sites, BMW Group also has a UK Sales and Marketing subsidiary in Bracknell with a Vehicle Distribution Centre in Thorne, near Doncaster. In 2011, BMW Group UK Ltd. reported sales of 116, 642 BMW and 50,138 MINI vehicles, representing an 8.59 per cent share of the total UK car market.

As BMW Group has grown in the UK, so have our environmental responsibilities. Protecting the environment is an obligation we take very seriously. All our manufacturing plants worldwide are certified to the International Management Standard ISO 14001. To achieve this we have established a series of improvement programmes that we actively develop and monitor.

BMW Group employs around 8,000 people directly in the UK with an additional 11,000 in its 147-strong dealer network representing BMW and MINI brands. The UK is BMW Group’s fourth largest sales market in the world. The company has invested over £1 billion in its UK operations since 2000 and a further £760 million is being invested between 2012 and 2015.

BMW Plant Oxford.

Products: MINI Hatch, MINI Clubman, MINI Convertible, MINI Coupé, MINI Roadster, Clubvan

Employing around 3,700 associates, the plant builds around 900 MINIs per day to individual customer order, five days a week. The site covers over 100 acres and consists of a bodyshop, paintshop and assembly hall. There is also a Quality and Engineering Centre which tests and ensures that vehicle quality meets the highest standards. Since its launch in 2001, over two million MINIs have been built, over 1.6 million of which have been exported to over 100 countries. MINI Plant Oxford is set to benefit from the majority of the company’s £760m 2011-2014 UK manufacturing investment programme as it prepares for production of the next generation of MINI models.

BMW Plant Hams Hall.

Products: Four-cylinder petrol engines

The first BMW engine factory to be built outside Germany and Austria, production began in 2001 following an initial investment of £400 million. More than 3 million four-cylinder petrol engines have now been produced to power the BMW 1 Series, BMW 3 Series, BMW X1 and all petrol derivatives within the MINI range. Over 800 people are employed at the plant supplying engines to factories across the global BMW Group production network in Germany, Austria and South Africa, in addition to BMW CKD plants in Germany for onward dispatch to Thailand, Indonesia, Malaysia, Egypt, Russia and India. BMW Plant Hams Hall has also been selected as the manufacturing site for the new generation of high-tech, three-cylinder petrol engines, including engines to power the exciting BMW i8 plug-in hybrid sportscar, scheduled to reach market in 2014.

BMW Group Plant Hams Hall.

BMW Plant Swindon.

Products: Home of MINI panel production

MINI Plant Swindon employs approximately 900 associates on a site covering 450,000 m². Facilities include 16 press lines and 140 robot cells. The plant has been the main supplier of MINI panels since 2005.

BMW Group Plant Swindon

BMW UK Ltd.

UK sales, marketing and aftersales subsidiary of BMW AG

BMW Group UK is the sales, marketing and aftersales subsidiary of BMW AG. Headquartered in Bracknell, Berkshire, BMW Group UK is responsible for importing BMW vehicles into the UK and supplying them for sale through its independent dealer network. BMW Group UK also has responsibility for all national marketing, advertising and aftersales activities for the BMW and MINI brands. Established in 1980, BMW Group UK currently employs around 500 associates.

BMW Financial Services (GB) Ltd.

Products: Personal finance and insurance cover

Established in 1996 and based in Hook, Hampshire, BMW Financial Services (UK) Ltd offers a range of options for financing both private and corporate purchases of BMW and MINI vehicles, as well as a range of insurance products designed to cover car, home and travel. Around 300 associates are based at Hook, which is also the main hub for Alphabet – a multi-make fleet management company, serving both national and multinational clients. Part of BMW Group UK for over a decade, Alphabet, has further strengthened its European market position through the acquisition of ING Car Lease, a division of ING Groep N.V. Alphabet increasing the number of company car contracts under management to approximately 540,000 in 16 European countries and consolidating its competitive lead in the European fleet management market.

BMW Motorrad UK

The motorcycling division of BMW Group UK based at Bracknell, BMW Motorrad UK has shown significant growth in the UK. BMW continues to dominate the adventuresports and touring sectors; in 2011, combined sales of the BMW R 1200 GS and R 1200 GS Adventure variant made BMW’s class-leading adventure sports machine the UK’s best-selling motorcycle over 125cc.

BMW Motorrad’s strong network of 36 dealerships across the country continue to offer industry-leading service, resulting in BMW Motorrad being voted ‘Best Motorcycle Brand’ in both the 2010 and 2011 RiDER Power survey. BMW Motorrad also organises and runs worldwide riding tours, rider training from novice to advanced and an off-roadriding school, through its activities program – World of BMW.

BMW Motorrad UK

BMW Group Academy UK

Wokefield Park, near Reading is host to the BMW Group Academy UK. This purpose-built training and development facility is responsible for providing all technical and non-technical training to BMW, MINI and Motorrad dealer network across the UK from apprentices to dealer principals. Opened in May 2006, the Academy has been awarded an Ofsted rating of Grade 1 (‘Outstanding’) based on its last three audits.

BMW Group UK Regional Parts Distribution Centre

A new 457,546 sq ft (42,506 sq m) purpose-built warehouse for BMW Group (UK) Ltd. became operational in 2012 at ProLogis Park Pineham in Northampton. The facility serves as BMW Group’s regional distribution centre delivering parts to BMW, MINI, Rolls-Royce Motor Cars and BMW motorcycle dealers throughout the UK and Ireland. The new facility represents a multi-million pound investment for BMW Group UK that is designed to further develop our industry-leading parts logistics operations.

BMW Group UK Vehicle Distribution Centre

Thorne near Doncaster is the location for the BMW Group UK Vehicle Distribution Centre. All vehicles imported through BMW Group UK are sent to Thorne for final preparation before being distributed across the dealer network. Around 50 associates are currently based at this site.

Rolls-Royce Motor Cars Limited.

Products: Phantom, Phantom Extended Wheelbase, Phantom Coupé, Phantom Drophead Coupé, Ghost, Ghost Extended Wheelbase

The modern home of Rolls-Royce Motor Cars is a purpose-built manufacturing plant situated on the Goodwood Estate in West Susex. Here over 1,000 specialists combine precision technology with traditional craftsmanship in the production of all Rolls-Royce Pahntom and Ghost models, continuing the marque’s heritage of hand-built luxury vehicles.

Genuine BMW accessories for your BMW.Go to accessories

Key facts and figures.

Corporate Fact Sheet.

18,000 people directly employed by company and dealer network with over 46,000 UK jobs supported in total

Over 100 apprentices are currently employed across UK manufacturing sites 2000 - 2015 £1.6 billion invested in UK manufacturing operations at Oxford, Hams Hall,

Swindon and Goodwood Almost every fifth car produced in the UK is a MINI More than two million MINIs have driven off the Oxford production line More than 1.6 million MINIs have been exported to over 100 countries 14% of all UK cars produced at MINI Plant Oxford - third largest vehicle producer in 2011 17% of all UK automotive engines produced at Hams Hall - second largest engine producer in

2011 £1.2 billion contribution to UK GDP £2.4 billion worth of cars and exported per annum £1.2 billion annual spend by BMW Group/dealer networkn on goods and services with UK

based suppliers

The new BMW X1Experience now

Sustainability in the UK.

BMW Group in the UK has produced its first sustainable value report. The report reveals that despite significant increases in production at all four plants, the general trend over the past five years has been a reduction in energy consumed per vehicle produced.

The report, which builds on BMW Group's first UK environmental report issued in 2006, also details the company's achievements in the fields of environmental product development, cleaner manufacturing and the company's positive economic and social impact on the areas in which it operates.

The report considers all of BMW Group's four manufacturing locations in the UK, MINI Plant Oxford (MINI), Plant Goodwood (Rolls-Royce), Plant Hams-Hall (4-cylinder engines) and MINI Plant Swindon (pressings and sub-assemblies). Examples of how the manufacturing facilities have improved their processes to reduce their impact on the environment can be found in the report ranging from the introduction of an innovative new paint technology at MINI Plant Oxford that reduces emissions by ten per cent to the locating of suppliers close to the plants to reduce transport miles.

Corporate Social Responsibility is an area that BMW Group in the UK takes very seriously. Since 2001 BMW Group has established a significant presence in the UK employing around 6000 full time associates in its seven business locations around the UK. Engaging with the communities in which it operates has been fundamental to BMW, and it has successfully made a contribution to society over and above an economic one. Examples include encouraging foreign language skills in schools (Hams Hall), supporting cultural activities such as the Cowley Carnival (MINI Plant Oxford) and the regeneration of Lydiard Park coach house to provide an education centre (MINI Plant Swindon).

Is your next car going to be a BMW? Configure your new BMW and discover our flexible finance solutions.

Build your BMW

BMW Education.

BMW has a long established commitment to supporting education across the UK. Launched in the UK over 17 years ago as part of the company's corporate responsibility commitment, BMW Education Programme provides free, curricular-linked and award-winning educational resources. It is BMW's intention for its programmes to be not only informative and engaging but accessible to everyone.

BMW Education

BMW HYDROGEN 7. BMW CleanEnergy

Our charities.

BMW continues to support numerous charities as part of its Corporate Social Responsibility, an area that BMW Group UK take very seriously. Below are some of the fantastic charities that receive regular support from BMW Group UK.

Competitors

Mercedes, Lexus, Acura, and Audianswer

Daimler Chrysler's Mercedes Benz is the biggest competitor of BMW.

BMW battles to retain dominance in luxury market

When Cadillac officials met with reporters during the recent upscale Pebble Beach Concours d’Elegance in California, they spent a surprising amount of time discussing their competition — in particular, BMW. With its new compact sports sedan called the ATS, Cadillac is taking aim at the Bavarian manufacturer, which has become the benchmark of performance luxury. 

“It won’t be easy” to take on BMW, said Cadillac General Marketing Manager Don Butler, but if the company has any hope of regaining credibility in the luxury market, General Motors’ flagship brand has no other choice. And it’s not alone. 

Last year, the BMW logo adorned more luxury cars than any other brand sold in the U.S., and BMW’s formidable reputation for making its self-proclaimed “ultimate performance machines” establishes it as the king of the hill that virtually every high-end automaker targets, from German rival Mercedes-Benz to Toyota's Lexus.

Time and again, that has proven easier to say than do, and BMW has continued to gain ground in recent years. But it certainly doesn’t mean competitors are backing down. Audi, for instance, is making inroads with products that deliver a mix of solid handling and acceleration along with eye-catching design. Akio Toyoda, president of Toyota, Lexus' parent company, has vowed to put more “passion” and “performance” into new and redesigned products like the LS 460 sedan that will go on sale later this year.

“I would not tell you the truth if I said I did not care” about the challenge the competition is presenting, said Ludwig Willisch, who last year became the CEO of BMW of North America. He added he's also intent on maintaining the position BMW gained in 2011 as the U.S. market’s luxury sales leader.

Being No. 1 “is meaningful to us,” said the German executive, and not just when compared to the likes of Cadillac, Mercedes or Lexus.  Though BMW was the luxury sales leader in the U.S. in 2011, China surged to become BMW’s top market. As of June, however, the U.S. is back in the lead — although BMW of North America is now in a tight race with Mercedes-Benz. And after seeing its sales collapse in 2011 as a result of product shortages stemming from Japan’s March earthquake and tsunami, Lexus is now back in the competition, as well.

BMW has rolled out a number of new models in recent months, including an all-new 3-Series, several high-performance M models, the new X1 compact crossover and, for 2013, it will update its flagship 7-Series.

The new X1 targets a fast-emerging compact crossover segment that Willisch anticipates will bring “new customers we haven’t seen so far.”

Collectively, the German luxury automakers have launched what is considered to be the most aggressive era of product proliferation in automotive history. As soon as some product gaps are identified, BMW or Mercedes or Audi rapidly jumps in — usually with the Teutonic competition quickly following. 

“It’s all about entrepreneurial spirit,” said Willisch, who downplayed concerns that BMW is overdoing things. A few years ago, the automaker saw skeptics abound when it rolled out the X6 Sport-Activity Vehicle, a crossover blending attributes of a conventional SUV and a sports coupe. But demand has been strong enough to persuade the maker to prepare a smaller version, the soon-to-launch X4.

Still, not everyone is convinced. Lexus CEO Mark Templin said he has no interest in adding “100 new models … because I don’t have to,” especially at the lower end of the luxury spectrum. The Japanese marquee brand doesn’t intend to compete with the X1 or the 1-Series passenger car because that, Templin said, is the role of the mainstream Toyota brand.

He has a point. Skeptics dub such miniluxury models as “compliance cars,” which luxury makers like BMW and Mercedes-Benz have to add to their lines in order to meet strict new U.S. mileage mandates and toughened European carbon dioxide rules. Lexus, Cadillac and Audi can turn to down-market sibling brands, such as Toyota, Chevrolet and Volkswagen.

Indeed, while BMW is rolling out a number of new battery-powered cars and plug-in hybrids, such as the new 3-Series-based ActiveE and the upcoming i3 and i8 models, Willisch acknowledged they’re likely to generate collective volumes “in the four digits.”

More conventional hybrids, such as the revised 2013 7-Series version, could do better. A recent study found that the Toyota Prius is frequently found as a companion to luxury models like the 7-Series in the 10 most affluent ZIP codes in America. Willisch said more and more luxury buyers, regardless of their income and net wealth, “are interested in fuel economy,” even if they're just driving something they can brag about to friends and neighbors.

Last year’s strong showing by BMW in China makes it clear that the automaker will have to adapt to global realities. BMW is developing new products specifically for China, notably a stretched version of the 3-Series designed to appeal to buyers who prefer being chauffeured. But no worries, insisted Willisch. He said his company “will continue to build ‘truthful’ BMWs” that can live up to the ultimate driving machine image.

But expect the manufacturer to also put more emphasis on design, creature comfort and safety, as well as quality and customer service. If competitors like Cadillac want to take a shot at BMW, the Bavarians are more than ready to return fire.

Product offered

BMW: "Newness" and the Product Life Cycle

"We're fortunate right now at BMW in that all of our products are new and competitive," says Jim McDowell, vice president of marketing at BMW, as he explains BMW's product life cycle. "Now, how do you do that? You have to introduce new models over time. You have to logically plan out the introductions over time, so you're not changing a whole model range at the same time you're changing another model range." BMW's strategy is to keep its products in the introduction and growth stages by periodically introducing new models in each of its product lines. In fact, BMW does not like to have any products in the maturity or decline stage of the product life cycle. Explains McDowell, "If a product is declining, we would prefer to withdraw it from the market, as opposed to having a strategy for dealing with the declining product. We're kind of a progressive, go get 'em company, and we don't think it does our brand image any good to have any declining products out there. So that's why we work so hard at managing the growth aspect."

BMW - THE COMPANY AND ITS PRODUCTS

BMW is one of the preeminent luxury car manufacturers in Europe, North America, and the world today. BMW produces several lines of cars, including the 3 series, the 5 series, the 7 series, the Z line (driven by Pierce Brosnan as James Bond in Goldeneye), and the new X line, BMW's "sport activity" vehicle line. In addition, BMW is now selling Rovers, a British car line anchored by the internationally popular Land Rover sport utility vehicle, and will begin selling Rolls Royce vehicles in 2003. Sales of all the BMW, Rover, and Land Rover vehicles have been on the rise globally. High-profile image campaigns (such as the James Bond promotion) and the award-winning BMW website (where users can design their own car) continue to increase the popularity of BMW's products. PRODUCT LIFE CYCLE BMW

cars typically have a product life cycle of seven years.

To keep products in the introductory and growth stages, BMW regularly introduces new models for each of its series to keep the entire series "new." For instance, with the 3 series, it will introduce the new sedan model one year, the new coupe the next year, then the convertible, then the station wagon, and then the sport hatchback. That's a new product introduction for

five of the seven years of the product life cycle. McDowell explains, "So, even though we have seven-year life cycles, we constantly try and make the cars meaningfully different and new about every three years. And that involves adding features and other capabilities to the cars as well." How well does this strategy work? BMW often sees its best sales numbers in either the sixth or seventh year after the product introduction. As global sales have increased, BMW has become aware of some international product life-cycle differences. For example, it has discovered that some competitive products have life cycles that are shorter or longer than seven years.

In Sweden and Britain automotive product life cycles are eight years, while in Japan they are typically only four years long. BRANDING "BMW is fortunate-we don't have too much of a dilemma as to what we're going to call our cars." McDowell is referring to BMW's trademark naming system that consists of the product line number and the motor type. For example, the designation "328" tells you the car is in the 3 series and the engine is 2.8 liters in size. BMW has found this naming system to be clear and logical and can be easily understood around the world.

The Z and X series don't quite fit in with this system. BMW had a tradition of building experimental, open-air cars and calling them Z's, and hence when the prototype for the Z3 was built, BMW decided to continue with the Z name. For the sport activity vehicle, BMW also used a letter name-the X series-since the four-wheel drive vehicle didn't fit with the sedan-oriented 3, 5, and 7 series. Other than the Z3 (the third in the Z series) and the X5 (named 5 to symbolize its mid-sized status within that series), the BMW branding strategy is quite simple, unlike the evocative names many car manufacturers choose to garner excitement for their new models.

MANAGING THE PRODUCT THROUGH THE WEB - REBRANDING FOR THE WAVE OF THE FUTURE

One of the ways BMW is improving its product offering seven further is through its innovative website (www.bmwusa.com). At the site, customers can learn about the particular models, e-mail questions, and request literature or test-drives from their local BMW dealership. What really sets BMW's website apart from other car manufacturers, though, is the ability for customers to configure a car to their own specifications (interior choices, exterior choices, engine, packages, and options) and then transfer that information to their

local dealer. As Carol Burrows, product communications manager for BMW, explains, "The BMW website is an integrated part of the overall marketing strategy for BMW. The full range of products can be seen and interacted with online. We offer pricing options online. Customers can go to their local dealership via the website to further discuss costs for purchase of a car. And it is a distribution channel for information that allows people access to the information 24 hours a day at their convenience."

Swot analysis

SWOT analysis (alternatively SWOT Matrix) is a structured planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. A SWOT analysis can be carried out for a product, place, industry or person. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieving that objective. The technique is credited to Albert Humphrey, who led a convention at the Stanford Research Institute (now SRI International) in the 1960s and 1970s using data from Fortune 500 companies.[1][2] The degree to which the internal environment of the firm matches with the external environment is expressed by the concept of strategic fit.

Setting the objective should be done after the SWOT analysis has been performed. This would allow achievable goals or objectives to be set for the organization.

Strengths: characteristics of the business or project that give it an advantage over others

Weaknesses: are characteristics that place the team at a disadvantage relative to others

Opportunities: elements that the project could exploit to its advantage Threats: elements in the environment that could cause trouble for the business or

project

Identification of SWOTs is important because they can inform later steps in planning to achieve the objective.

First, the decision makers should consider whether the objective is attainable, given the SWOTs. If the objective is not attainable a different objective must be selected and the process repeated.

Users of SWOT analysis need to ask and answer questions that generate meaningful information for each category (strengths, weaknesses, opportunities, and threats) to make the analysis useful and find their competitive advantage.

Matching and converting

One way of utilizing SWOT is matching and converting. Matching is used to find competitive advantage by matching the strengths to opportunities. Converting is to apply conversion strategies to convert weaknesses or threats into strengths or opportunities. An example of conversion strategy is to find new markets. If the threats or weaknesses cannot be converted a company should try to minimize or avoid them.[4]

Internal and external factors

SWOT analyses aim to identify the key internal and external factors seen as important to achieving an objective. The factors come from within a company's unique value chain.[citation

needed] SWOT analysis groups key pieces of information into two main categories:

1. internal factors – the strengths and weaknesses internal to the organization2. external factors – the opportunities and threats presented by the environment

external to the organization

Analysis may view the internal factors as strengths or as weaknesses depending upon their effect on the organization's objectives. What may represent strengths with respect to one objective may be weaknesses (distractions, competition) for another objective. The factors may include all of the 4Ps; as well as personnel, finance, manufacturing capabilities, and so on.

The external factors may include macroeconomic matters, technological change, legislation, and socio-cultural changes, as well as changes in the marketplace or in competitive position. The results are often presented in the form of a matrix.

SWOT analysis is just one method of categorization and has its own weaknesses. For example, it may tend to persuade its users to compile lists rather than to think about actual important factors in achieving objectives. It also presents the resulting lists uncritically and without clear prioritization so that, for example, weak opportunities may appear to balance strong threats.

It is prudent not to eliminate any candidate SWOT entry too quickly. The importance of individual SWOTs will be revealed by the value of the strategies they generate. A SWOT item that produces valuable strategies is important. A SWOT item that generates no strategies is not important.

Use

The usefulness of SWOT analysis is not limited to profit-seeking organizations. SWOT analysis may be used in any decision-making situation when a desired end-state (objective) has been defined. Examples include: non-profit organizations, governmental units, and individuals. SWOT analysis may also be used in pre-crisis planning and preventive crisis management. SWOT analysis may also be used in creating a recommendation during a viability study/survey. The SWOT analysis is very important for any product or services while launching in the market.So, that we can analyse the product or services according to the market and customer requirements.

Criticism

Some findings from Menon et al. (1999) [5] and Hill and Westbrook (1997) [6] have shown that SWOT may harm performance. Other complementary analyses have been proposed, such as the Growth-share matrix.

SWOT - landscape analysis

The SWOT-landscape systematically deploys the relationships between overall objective and underlying SWOT-factors and provides an interactive, query-able 3D landscape.

The SWOT-landscape grabs different managerial situations by visualizing and foreseeing the dynamic performance of comparable objects according to findings by Brendan Kitts, Leif Edvinsson and Tord Beding (2000).[7]

Changes in relative performance are continually identified. Projects (or other units of measurements) that could be potential risk or opportunity objects are highlighted.

SWOT-landscape also indicates which underlying strength/weakness factors that have had or likely will have highest influence in the context of value in use (for ex. capital value fluctuations).

Corporate planning

As part of the development of strategies and plans to enable the organization to achieve its objectives, that organization will use a systematic/rigorous process known as corporate planning. SWOT alongside PEST/PESTLE can be used as a basis for the analysis of business and environmental factors.[8]

Set objectives – defining what the organization is going to do Environmental scanning

o Internal appraisals of the organization's SWOT, this needs to include an assessment of the present situation as well as a portfolio of products/services and an analysis of the product/service life cycle

Analysis of existing strategies, this should determine relevance from the results of an internal/external appraisal. This may include gap analysis which will look at environmental factors

Strategic Issues defined – key factors in the development of a corporate plan which needs to be addressed by the organization

Develop new/revised strategies – revised analysis of strategic issues may mean the objectives need to change

Establish critical success factors – the achievement of objectives and strategy implementation

Preparation of operational, resource, projects plans for strategy implementation Monitoring results – mapping against plans, taking corrective action which may

mean amending objectives/strategies.[9]

Marketing

Main article: Marketing management

In many competitor analyses, marketers build detailed profiles of each competitor in the market, focusing especially on their relative competitive strengths and weaknesses using SWOT analysis. Marketing managers will examine each competitor's cost structure, sources of profits, resources and competencies, competitive positioning and product differentiation, degree of vertical integration, historical responses to industry developments, and other factors.

Marketing management often finds it necessary to invest in research to collect the data required to perform accurate marketing analysis. Accordingly, management often conducts market research (alternately marketing research) to obtain this information. Marketers employ a variety of techniques to conduct market research, but some of the more common include:

Qualitative marketing research, such as focus groups Quantitative marketing research, such as statistical surveys Experimental techniques such as test markets Observational techniques such as ethnographic (on-site) observation Marketing managers may also design and oversee various environmental scanning

and competitive intelligence processes to help identify trends and inform the company's marketing analysis.

Future Strategies

BMW CEO Norbert Reithofer has spilled the beans on the carmaker’s future plans with the release of a document today outlining its official strategy up until 2020. According to the document, BMW hopes to sell up to 1.8 million vehicles by 2012 and sees increased volumes as the key to improved profitability. To help meet its sales goals, BMW has confirmed plans for an X1 crossover, new Gran Turismo, Mini SUV and new Rolls-Royce Coupé over the next five years.

The new Gran Turismo will be a four-door coupe based on the CS concept that was presented at the Shanghai Auto Show. The Rolls Royce brand, meanwhile, will launch not only the new coupe but also an additional model positioned below the Phantom.

A new BMW concept vehicle is also in the works. Dubbed the ‘Progressive Activity Sedan’ (PAS), the concept will highlight efficient packaging methods and intelligent functionalities. BMW will also be focusing on improving its green credentials with the announcement of a further €6 billion investment in its EfficientDynamics program.

More attention will also be paid to currency fluctuations, with plans in place for more natural hedging and the purchasing of U.S. dollars. One avenue is the increasing of production in the U.S. with the Spartanburg plant confirmed to output 240,000 vehicles by 2012 from the current 140,000 level and the Mini factory in Oxford set to expand to a capacity of 260,000 vehicles a year. Chinese production will rise from the current 30,000 units per year to 44,000.

As for any acquisitions, Reithofer acknowledged that they are still under consideration but all the carmakers researched thus far do not meet the criteria BMW is looking for in a subsidiary so it looks like there won't be a fourth brand for BMW any time soon.

BMW Group Sets Course for the Future

* New strategy focuses on increasing value

* New profitability and growth targets approved

* Programme to tap 6 billion Euros in efficiency potential by 2012

* Shareholders to benefit from company success to a greater extent

Munich. The BMW Group has set course for a successful future with its strategic realignment. “We will consistently align the BMW Group to achieve profitability and increase value over the long term,” said Norbert Reithofer, Chairman of the Board of Management of BMW AG, on Thursday when he presented the new corporate strategy in Munich. The Group’s strategic direction up to 2020 is clearly defined: The BMW Group is the world’s leading provider of premium products and premium services for individual mobility.

Return on sales target of 8% to 10% in the Automobile segment

The future strategy focuses on ensuring the company’s long-term success and safeguarding its independence. The BMW Group has set ambitious interim targets for the first five years: Automobile retail is supposed to rise to more than 1.8 million vehicles by 2012. During this period, the company plans to increase deliveries in the motorcycle business by 50% to 150,000 units per annum.

Profitability takes priority over mere volume growth. “We will focus the entire organisation on the return on capital,” Reithofer commented. In the Automobile segment, the company plans to achieve a Return on Capital Employed (RoCE) of 26% and a return on sales of between 8% and 10% as of 2012.

The BMW Group’s strategic targets for the time period until 2020 are equally ambitious: The company intends to increase retail in the automobile business to clearly more than two million vehicles.

Programme launched to tap six billion euros in efficiency potential

The BMW Group will launch a comprehensive efficiency programme that will encompass all of the company’s divisions and will apply to both performance and costs. “It is designed to tap approximately six billion euros in efficiency potential by 2012,” Reithofer emphasised. The new programme is based on the principle of EfficientDynamics, a strategy that is successfully applied to the company’s automobiles as well: More output for less input.

The BMW Group plans to tap additional earnings potential by starting new business activities, among other things. In addition to new products and markets, the BMW Group has identified potential along the vehicle lifecycle and the automotive industry’s value chain. Another positive effect on earnings is to arise from the consistent positioning of the vehicles in the premium segment.

In addition, the BMW Group has adopted a range of measures that will help achieve significant progress in terms of cost. Besides putting all cost structures to the test, the company will continue to standardise processes. Further targets include a reduction in cost, capital expenditure and capital employed per vehicle in development, production, sales and administration. Cooperation is supposed to lead to economies of scale for components, modules and drive systems. The BMW Group aims for a rise in productivity of at least 5% a year.

Thanks to the targeted productivity increase, the BMW Group expects to be able to achieve the growth planned for the period until 2012 with roughly the same level of personnel as today.

Natural hedging and purchasing in US dollars to be expanded

In order to strengthen independence from currency fluctuations, the BMW Group will strategically step up natural hedging as well as purchasing, primarily in US dollars. By 2012, production capacity of the US plant in Spartanburg will be increased from 140,000 at present to 240,000 units. Plans for the expansion are already underway.

The BMW Group will also raise the Oxford MINI plant’s capacity to 260,000 units per annum, without making additional investments. In addition, the company plans to take the first step to increasing capacities in China from 30,000 to 44,000 units a year.

Increase in payout ratio – Significantly higher dividend planned for 2007

The Board of Management is convinced that the strategic realignment will be successful over the long term. Therefore, the company plans to let shareholders benefit from the company’s success to a greater extent by substantially increasing the dividend payout ratio. As a first step, the Board of Management will propose a significantly higher dividend for the financial year 2007 to the Supervisory Board and the Annual General Meeting.

The BMW Group will also keep the option of conducting a share buyback. However, in the next twelve months, the company will concentrate on increasing the dividend payout ratio.

The BMW Group intends to do more for employees as well. In order to safeguard pensions, pension obligations in Germany will gradually be funded out in three phases over the next few years.

X1, Gran Turismo, MINI SAV, Rolls-Royce Coupe to be launched by 2012

The BMW Group will continue its product initiative, making use of modular systems for all new models in order to increase synergy effects. A new X1 model will complement the successful X Sports Activity Vehicle lineup, in addition to the BMW Concept X6 presented at the Frankfurt Motor Show. Furthermore, the company will manufacture a four-door Gran Turismo based on the CS concept study showcased in Shanghai. Another result of the new strategy is that the BMW Group will not build a space-functional concept. Instead, the company plans to introduce a fundamentally altered concept called Progressive Activity Sedan (PAS). This concept will establish an entirely new segment, introducing a unique interpretation of the sedan and offering a wide range of intelligent features.

The next MINI model will be a Sports Activity Vehicle. The Rolls-Royce model portfolio will be expanded as well: A Coupe will be launched as the third variant of the Phantom. An additional Rolls-Royce model is in the pipeline; it will be positioned below the Rolls-Royce Phantom in terms of both price and size. Furthermore, the BMW Group will continue to extend the product portfolios under the BMW Motorrad and Husqvarna Motorcycles brands in the years to come.

Dr. Reithofer: In principle, acquisitions will be kept on the agenda

The BMW Group explored all of the options for future growth during the strategic review, including potential acquisitions or the creation of a fourth brand. However, this would require the new automotive brand to be a perfect fit for the company and its strengths. Moreover, rising unit figures would have to result in a decline in unit costs and thus lead to economies of scale. The new brand would have to at least make the same positive contribution to earnings as the existing automobile business. However, an in-depth analysis found that none of the evaluated automotive brands currently meets these requirements.

Nevertheless, the BMW Group does not generally rule out further acquisitions. Accordingly, the successful acquisition of the tradition-rich Husqvarna brand and its sporty profile have

enabled the BMW Group to attract new and younger target groups in the Motorcycles segment.

“In principle, we will keep acquisitions on our agenda. We defined clear criteria for potential acquisitions within the scope of our strategic review. This will allow us to act swiftly whenever necessary,” according to Reithofer.

As always, the BMW Group will focus on its inherent strengths and thus on the market for premium vehicles and services, a segment that will continue to grow much faster than the mass market. The company expects the premium segment to increase by about 40 percent between 2005 and 2019, compared to an increase just under 20 percent for the mass segment.

The BMW Group will continue to invest heavily in future technologies with a view to developing entirely new individual mobility solutions, thus guaranteeing the company’s innovation leadership for the next decade as well. With its EfficientDynamics development strategy, the BMW Group has gained a significant edge over competitors, for example in reducing carbon emissions.

“I am firmly convinced that this strategy will lead us to continued business success,” Reithofer stated.

es is not always the answer, especially in a poor economy. Many businesses have been lost because they priced

themselves out of the marketplace. On the other hand, many business and sales staff leave "money on the

table". One strategy does not fit all, so adopting a pricing strategy is a learning curve when studying the needs

and behaviors of customers and clients.[1]

Contents

  [hide] 

1   Models of pricing

o 1.1   Cost-plus pricing

o 1.2   Creaming or skimming

o 1.3   Limit pricing

o 1.4   Loss leader

o 1.5   Market-oriented pricing

o 1.6   Penetration pricing

o 1.7   Price discrimination

o 1.8   Premium pricing

o 1.9   Predatory pricing

o 1.10   Contribution margin-based pricing

o 1.11   Psychological pricing

o 1.12   Dynamic pricing

o 1.13   Price leadership

o 1.14   Target pricing

o 1.15   Absorption pricing

o 1.16   High-low pricing

o 1.17   Premium decoy pricing

o 1.18   Marginal-cost pricing

o 1.19   Value-based pricing

o 1.20   Pay what you want

o 1.21   Freemium

o 1.22   Odd pricing

2   Nine laws of price sensitivity and consumer psychology

3   References

Models of pricing [edit]

Cost-plus pricing [edit]

Main article: Cost-plus pricing

Cost-plus pricing is the simplest pricing method. The firm calculates the cost of producing the product and adds

on a percentage (profit) to that price to give the selling price. This method although simple has two flaws; it takes

no account of demand and there is no way of determining if potential customers will purchase the product at the

calculated price.

This appears in two forms, full cost pricing which takes into consideration both variable and fixed costs and adds

a percentage as markup. The other is direct cost pricing which is variable costs plus a percentage as markup.

The latter is only used in periods of high competition as this method usually leads to a loss in the long run.

Creaming or skimming [edit]

In most skimming, goods are sold at higher prices so that fewer sales are needed to break even. Selling a

product at a high price, sacrificing high sales to gain a high profit is therefore "skimming" the market. Skimming is

usually employed to reimburse the cost of investment of the original research into the product: commonly used in

electronic markets when a new range, such as DVDplayers, are firstly dispatched into the market at a high price.

This strategy is often used to target "early adopters" of a product or service. Early adopters generally have a

relatively lower price-sensitivity - this can be attributed to: their need for the product outweighing their need to

economise; a greater understanding of the product's value; or simply having a higher disposable income.

This strategy is employed only for a limited duration to recover most of the investment made to build the product.

To gain further market share, a seller must use other pricing tactics such as economy or penetration. This

method can have some setbacks as it could leave the product at a high price against the competition. [2]

Limit pricing [edit]

Main article: Limit price

A limit price is the price set by a monopolist to discourage economic entry into a market, and is illegal in many

countries. The limit price is the price that the entrant would face upon entering as long as the incumbent firm did

not decrease output. The limit price is often lower than the average cost of production or just low enough to make

entering not profitable. The quantity produced by the incumbent firm to act as a deterrent to entry is usually larger

than would be optimal for a monopolist, but might still produce higher economic profits than would be earned

under perfect competition.

The problem with limit pricing as a strategy is that once the entrant has entered the market, the quantity used as

a threat to deter entry is no longer the incumbent firm's best response. This means that for limit pricing to be an

effective deterrent to entry, the threat must in some way be made credible. A way to achieve this is for the

incumbent firm to constrain itself to produce a certain quantity whether entry occurs or not. An example of this

would be if the firm signed a union contract to employ a certain (high) level of labor for a long period of time. In

this strategy price of the product becomes the limit according to budget.

Loss leader [edit]

Main article: Loss leader

A loss leader or leader is a product sold at a low price (i.e. at cost or below cost) to stimulate other profitable

sales. This would help the companies to expand its market share as a whole.

Market-oriented pricing [edit]

Setting a price based upon analysis and research compiled from the target market. This means that marketers

will set prices depending on the results from the research. For instance if the competitors are pricing their

products at a lower price, then it's up to them to either price their goods at an above price or below, depending on

what the company wants to achieve .

Penetration pricing [edit]

Main article: Penetration pricing

Penetration pricing includes setting the price low with the goals of attracting customers and gaining market share.

The price will be raised later once this market share is gained.[3]

Price discrimination [edit]

Main article: Price discrimination

Price discrimination is the practice of setting a different price for the same product in different segments to the

market. For example, this can be for different classes, such as ages, or for different opening times.

Premium pricing [edit]

Main article: Premium pricing

Premium pricing is the practice of keeping the price of a product or service artificially high in order to encourage

favorable perceptions among buyers, based solely on the price. The practice is intended to exploit the (not

necessarily justifiable) tendency for buyers to assume that expensive items enjoy an exceptional reputation, are

more reliable or desirable, or represent exceptional quality and distinction.

Predatory pricing [edit]

Main article: Predatory pricing

Predatory pricing, also known as aggressive pricing (also known as "undercutting"), intended to drive out

competitors from a market. It is illegal in some countries.

Contribution margin-based pricing [edit]

Main article: Contribution margin-based pricing

Contribution margin-based pricing maximizes the profit derived from an individual product, based on the

difference between the product's price and variable costs (the product's contribution margin per unit), and on

one’s assumptions regarding the relationship between the product’s price and the number of units that can be

sold at that price. The product's contribution to total firm profit (i.e. to operating income) is maximized when a

price is chosen that maximizes the following: (contribution margin per unit) X (number of units sold)..

Psychological pricing [edit]

Main article: Psychological pricing

Pricing designed to have a positive psychological impact. For example, selling a product at $3.95 or $3.99, rather

than $4.00.

Dynamic pricing [edit]

Main article: Dynamic pricing

A flexible pricing mechanism made possible by advances in information technology, and employed mostly by

Internet based companies. By responding to market fluctuations or large amounts of data gathered from

customers - ranging from where they live to what they buy to how much they have spent on past purchases -

dynamic pricing allows online companies to adjust the prices of identical goods to correspond to a customer’s

willingness to pay. The airline industry is often cited as a dynamic pricing success story. In fact, it employs the

technique so artfully that most of the passengers on any given airplane have paid different ticket prices for the

same flight.[4]

Price leadership [edit]

Main article: Price leadership

An observation made of oligopolistic business behavior in which one company, usually the dominant competitor

among several, leads the way in determining prices, the others soon following. The context is a state of limited

competition, in which a market is shared by a small number of producers or sellers.

Target pricing [edit]

Pricing method whereby the selling price of a product is calculated to produce a particular rate of return on

investment for a specific volume of production. The target pricing method is used most often by public utilities,

like electric and gas companies, and companies whose capital investment is high, like automobile manufacturers.

Target pricing is not useful for companies whose capital investment is low because, according to this formula, the

selling price will be understated. Also the target pricing method is not keyed to the demand for the product, and if

the entire volume is not sold, a company might sustain an overall budgetary loss on the product.

Absorption pricing [edit]

Method of pricing in which all costs are recovered. The price of the product includes the variable cost of each

item plus a proportionate amount of the fixed costs and is a form of cost-plus pricing

High-low pricing [edit]

Method of pricing for an organization where the goods or services offered by the organization are regularly priced

higher than competitors, but through promotions, advertisements, and or coupons, lower prices are offered on

key items. The lower promotional prices are designed to bring customers to the organization where the customer

is offered the promotional product as well as the regular higher priced products.[5]

Premium decoy pricing [edit]

Method of pricing where an organization artificially sets one product price high, in order to boost sales of a lower

priced product.

Marginal-cost pricing [edit]

In business, the practice of setting the price of a product to equal the extra cost of producing an extra unit of

output. By this policy, a producer charges, for each product unit sold, only the addition to total cost resulting from

materials and direct labor. Businesses often set prices close to marginal cost during periods of poor sales. If, for

example, an item has a marginal cost of $1.00 and a normal selling price is $2.00, the firm selling the item might

wish to lower the price to $1.10 if demand has waned. The business would choose this approach because the

incremental profit of 10 cents from the transaction is better than no sale at all.

Value-based pricing [edit]

Main article: Value-based pricing

Pricing a product based on the value the product has for the customer and not on its costs of production or any

other factor. This pricing strategy is frequently used where the value to the customer is many times the cost of

producing the item or service. For instance, the cost of producing a software CD is about the same independent

of the software on it, but the prices vary with the perceived value the customers are expected to have. The

perceived value will depend on the alternatives open to the customer. In business these alternatives are using

competitors software, using a manual work around, or not doing an activity. In order to employ value-based

pricing you have to know your customer's business, his business costs, and his perceived alternatives.

Pay what you want [edit]

Main article: Pay what you want

Pay what you want is a pricing system where buyers pay any desired amount for a given commodity, sometimes

including zero. In some cases, a minimum (floor) price may be set, and/or a suggested price may be indicated as

guidance for the buyer. The buyer can also select an amount higher than the standard price for the commodity.

Giving buyers the freedom to pay what they want may seem to not make much sense for a seller, but in some

situations it can be very successful. While most uses of pay what you want have been at the margins of the

economy, or for special promotions, there are emerging efforts to expand its utility to broader and more regular

use.

Freemium [edit]

Main article: Freemium

Freemium is a business model that works by offering a product or service free of charge (typically digital offerings

such as software, content, games, web services or other) while charging a premium for advanced features,

functionality, or related products and services. The word "freemium" is a portmanteau combining the two aspects

of the business model: "free" and "premium". It has become a highly popular model, with notable success.

Odd pricing [edit]

In this type of pricing, the seller tends to fix a price whose last digits are odd numbers. This is done so as to give

the buyers/consumers no gap for bargaining as the prices seem to be less and yet in an actual sense are too

high, and takes advantage of human psychology. A good example of this can be noticed in most supermarkets

where instead of pricing at $10, it would be written as $9.99. This pricing policy is common in economies using

the free market policy.

Nine laws of price sensitivity and consumer psychology [edit]

In their book, The Strategy and Tactics of Pricing, Thomas Nagle and Reed Holden outline nine "laws" or factors

that influence how a consumer perceives a given price and how price-sensitive they are likely to be with respect

to different purchase decisions. [6][7]

They are:

1. Reference Price Effect – buyer’s price sensitivity for a given product increases the higher the product’s

price relative to perceived alternatives. Perceived alternatives can vary by buyer segment, by occasion,

and other factors.

2. Difficult Comparison Effect – buyers are less sensitive to the price of a known or more reputable

product when they have difficulty comparing it to potential alternatives.

3. Switching Costs Effect – the higher the product-specific investment a buyer must make to switch

suppliers, the less price sensitive that buyer is when choosing between alternatives.

4. Price-Quality Effect – buyers are less sensitive to price the more that higher prices signal higher

quality. Products for which this effect is particularly relevant include: image products, exclusive

products, and products with minimal cues for quality.

5. Expenditure Effect – buyers are more price sensitive when the expense accounts for a large

percentage of buyers’ available income or budget.

6. End-Benefit Effect – the effect refers to the relationship a given purchase has to a larger overall

benefit, and is divided into two parts: Derived demand: The more sensitive buyers are to the price of the

end benefit, the more sensitive they will be to the prices of those products that contribute to that

benefit. Price proportion cost: The price proportion cost refers to the percent of the total cost of the end

benefit accounted for by a given component that helps to produce the end benefit (e.g., think CPU and

PCs). The smaller the given components share of the total cost of the end benefit, the less sensitive

buyers will be to the component's price.

7. Shared-cost Effect – the smaller the portion of the purchase price buyers must pay for themselves, the

less price sensitive they will be.

8. Fairness Effect – buyers are more sensitive to the price of a product when the price is outside the

range they perceive as “fair” or “reasonable” given the purchase context.

9. The Framing Effect – buyers are more price sensitive when they perceive the price as a loss rather

than a forgone gain, and they have greater price sensitivity when the price is paid separately rather

than as part of a bundle.

Producer-oriented model [edit]

The marketer E. Jerome McCarthy proposed a four Ps classification in 1960, which has since been used by

marketers throughout the world.[1]

Classification

Category Definition

Product

A product is seen as an item that satisfies what a consumer needs or wants. It is a tangible

good or an intangible service. Intangible products are service based like the tourism industry,

the hotel industry and the financial industry. Tangible products are those that have an

independent physical existence. Typical examples of mass-produced, tangible objects are

the motor car and the disposable razor. A less obvious but ubiquitous mass-produced service

is a computer operating system.[1]

Every product is subject to a life-cycle including a growth phase followed by a maturity phase

and finally an eventual period of decline as sales falls. Marketers must do careful research on

how long the life cycle of the product they are marketing is likely to be and focus their

attention on different challenges that arise as the product moves through each stage.[1]

The marketer must also consider the product mix. Marketers can expand the current product

mix by increasing a certain product line's depth or by increasing the number of product lines.

Marketers should consider how to position the product, how to exploit the brand, how to

exploit the company's resources and how to configure the product mix so that each product

complements the other. The marketer must also consider product development strategies.[1]

Price

the amount a customer pays for the product. The price is very important as it determines the

company's profit and hence, survival. Adjusting the price has a profound impact on the

marketing strategy, and depending on the price elasticity of the product, often it will affect

the demand and sales as well. The marketer should set a price that complements the other

elements of the marketing mix.[1]

When setting a price, the marketer must be aware of the customer perceived value for the

product. Three basic pricing strategies are: market skimming pricing, market penetration

pricing and neutral pricing. The 'reference value' (where the consumer refers to the prices of

competing products) and the 'differential value' (the consumer's view of this product's

attributes versus the attributes of other products) must be taken into account.[1]

Promotion all of the methods of communication that a marketer may use to provide information to

different parties about the product. Promotion comprises elements such as: advertising, public

relations, personal selling and sales promotion.[1]

Advertising covers any communication that is paid for, from cinema commercials, radio and

Internet advertisements through print media and billboards. Public relations is where the

communication is not directly paid for and includes press releases, sponsorship deals,

exhibitions, conferences, seminars or trade fairs and events. Word-of-mouth is any apparently

informal communication about the product by ordinary individuals, satisfied customers or

people specifically engaged to create word of mouth momentum. Sales staff often plays an

important role in word of mouth and public relations (see 'product' above).[1]

distributio

n(Place)

refers to providing the product at a place which is convenient for consumers to access.

Various strategies such as intensive distribution, selective distribution, exclusive distribution

and franchising can be used by the marketer to complement the other aspects of the

marketing mix.[1][4]

The seven Ps is an additional marketing model that refers to the already mentioned four Ps, plus 'Physical

evidence', 'People', and 'Process':[5]

Classifications

Category Definition

Physical

evidence

elements within the store -- the store front, the uniforms employees wear, signboards,

etc.

People the employees of the organization with whom customers come into contact.

Process the processes and systems within the organization that affects its marketing process.

These latter three factors are not cited nearly as often as the first four.

Consumer-oriented model [edit]

Robert F. Lauterborn proposed a four Cs classification in 1993[6] which is a more consumer-oriented version of

the four Ps that attempts to better fit the movement from mass marketing to niche marketing:

"P" category "C" category "C" definition

Product Consumer

shifting the focus to satisfying the consumer needs. By defining offerings as

individual capabilities that are combined and focused to a specific industry,

the result is a custom solution rather than the pigeon-holing of a customer

into a product.

Price Cost reflecting the total cost of ownership. Many factors affect Cost, including but

not limited to the customer's cost to change or implement the new product or

service and the customer's cost for not selecting a competitor's product or

service.

Promotion Communication

represents a broader focus. Communications can include advertising, public

relations, personal selling, viral advertising, and any form of communication

between the organization and the consumer.

distributio

n(Place)Convenience

With the rise of Internet and hybrid models of purchasing, Place is becoming

less relevant. Convenience takes into account the ease of buying the

product, finding the product, finding information about the product, and

several other factors.

Four Cs: in the Seven Cs Compass Model [edit]

(Corporation and consumer -oriented model)

After Koichi Shimizu proposed a four Cs classification in 1973, this was expanded to the Seven Cs Compass

Model to provide a more complete picture of the nature of marketing in 1981. It attempts to explain the success

or failure of a firm within a market and is somewhat analogous to Michael Porter's diamond model, which tries to

explain the success and failure of different countries economically.[7][8][9]

The Seven Cs Compass Model are:

(C1)Corporation – The core of four Cs is corporation ( company and non profit organization). C-O-S

(Organization, Competitor, Stakeholder) within the Corporation. The company has to think

of compliance and accountability as important. The competition in the areas in which the company competes

with other firms in its industry.

The four elements in the Seven Cs Compass Model are:

A formal approach to this customer-focused marketing mix is known as Four

Cs (Commodity, Cost, Communication, Channel) in “the Seven Cs Compass Model. The four Cs Model

provides a demand/customer centric version alternative to the well-known four Ps supply side model

(product, price, promotion, place) of marketing management.[10]

Product  → Commodity

Price  → Cost

Promotion  → Communication

Place  → Channel

"P"

category"C" category "C" definition

Product (C2)Commodity

(Original meaning of Latin: Commodus=convenient) : It is not "product out". The

goods and services for the consumers or citizens. Steve Jobs has been making

the goods with which people are pleased. It will not become commoditization if

a commodity is built from the start.

Price (C3)Cost(Original meaning of Latin: Constare= It makes sacrifices) : There is not only

producing cost and selling cost but purchasing cost and social cost.

Promotion(C4

)Communication

(Original meaning of Latin:Communis=sharing of meaning) : marketing

communication : Not only promotion but communication is important.

Communications can include advertising, sales promotion, public relations,

publicity, personal selling, corporate identity.

place (C5)Channel (Original meaning is a Canal) : marketing channels. Flow of goods.

The compass of consumers and Circumstances (environment) are:

(C6)Consumer – (Needle of compass to Consumer)

The factors related to consumers can be explained by the first character of four directions marked on

the compass model. These can be remembered by the cardinal directions, hence the namecompass model:

N = Needs

W = Wants

S = Security

E = Education:(consumer education)

(C7)Circumstances – (Needle of compass to Circumstances )

In addition to the consumer, there are various uncontrollable external environmental factors encircling the

companies. Here it can also be explained by the first character of the four directions marked on

the compass model:

N = National and International

W = Weather

S = Social and Cultural

E = Economic

These can also be remembered by the cardinal directions marked on a compass. The Seven Cs Compass Model

is a framework in Co-marketing (Symbiotic marketing). It has been criticized for being little more than the four Ps

with different points of emphasis. In particular, the seven Cs inclusion of consumers in the marketing mix is

criticized, since they are a target of marketing, while the other elements of the marketing mix are tactics. The

seven Cs also include numerous strategies for product development, distribution, and pricing, while assuming

that consumers want two-way communications with companies.

A Study of Competitors

LG and Samsung exclusive showrooms were similar in terms of POP and other impressive

grandeur in the outlet and comparable to that of BMW. The plus point that these dealers

enjoyed was that when a customer walked in one of these showrooms, he already had a

good deal of information about these product. These brands have been in the market for

around 9-10 years and their users have acted as a reference point to others through word-

of-mouth influence.

The case why Sony is a little different. When a customer enters a Sony showroom, he has

already made up his mind to buy a Sony or comes to seek information about the product

features. Sony is very highly priced and is synonymous with world –class technology. The

sale people do not need to plus the brand at all as the brand commands that respect

automatically. People are well aware of the prices and thus usually its target segment is

middle-upper and upper class. Sony buyers are also extremely brand loyal; they mostly own

more then one Sony product. This brand loyalty is not yet seen for LG or Samsung as people

see them as very similar but both have captured a large share of Indian market.

Hyundai, a new entrant in consumer durables is also present in many outlets. The plus point

is the familiarity with the name Hyundai. Also the dealers show great faith in the products

and also display the unique features of the range available.

SUGGESTION

The consumer electronics industry spends billion of dollars each year on advertising brand

names in hopes of building awareness, sales, trust, and respect with consumers. New

research suggests much of it in its current form may be a waste of company.

Trust Is An Issue:

The study suggests that consumers are reluctant to trust electronics manufacturers. Instead,

they tend to turn to friends and relatives for information before making purchase decision.

In fact, consumers are least interested in product-related information compared to other

things from manufacturers. Supporting that attitude, consumers who send in their

registration cards do so to activate the warranty, not to receive product information.

New strategy:

Concentrate on developing trusted relationship with previous costumers to maximize brand

loyalty and referral business.

Brand Reputation No Longer King:

Brand reputation is not as defining a factor as it once was for consumer electronics

companies, indicates study results. A product’s features, style, price, warranty, and brand

and retailer reputation are all just as important to a consumer.

New Strategy:

Seek new methods to differentiate products, yet continue to remain competitive using

traditional strategies.

Money Talks:

Research indicates consumers are hungry for anything that will save them a few bucks. They

welcome communications from manufacturers regarding promotions and discounts.

Whereas finding point to lack of trust, it appears consumers will whisk that aside if it will

save them money.

New Strategy:

Construct marketing programs that includes offers and discounts – perhaps a monthly

special offer, e-mail coupon, or alerts to product price drops would be successful.

Rethinking the Whole costumer Experience:

Clearly, the marketing landscape has changed. Consumer opinions, formed by years of ever-

changing communications technologies, marketing messages, product experiences, and

competition for their business, necessitate fresh marketing strategies. Strategies that not

only address such issues as brand reputation, key messages, and communication methods,

but consider that costumer experience as a whole. After all, trust isn’t built from seeing a

single advertisement, but from cumulative experience with a particular brand.

BMW is not in the “Evoked Set” of consumer durables brands

AWARENESS and INTEREST is an issue

BMW is an unknown brand to some consumers.

Consumers who know about BMW, few of them are either overlooking the brand or are

indifferent about it as there as no strong reinforcement by way of advertising or referrals.

It is an unacceptable brand to only those who dose not trust on Chinese technology and

have issues with Chinese origin brand.

For those who consider BMW in their Evoked set, want more re-assurance to be able to

purchase it against established competitors.

Create awareness and interest for BMW products

Increase the number of ads

Increase interest in the brand and dealership visits

Create purchase intention

Drive sales and encourage campaigns and schemes

More self space should be given to BMW products in the multi-brand outlets

More advertising and awareness building exercise is suggested

Some celebrity endorsement can increase the recall and excitement towards the brand

Salesman needs to promote the brand more effectively and with enthusiasm

Check the salesman telling the costumer that BMW is a German product

Full range of products should be available with the dealers

Some promotional schemes in items of special discount etc. should be introduced

The company should try and get associated with events for promotions, e.g. sponsoring

them and gain some good PR reviews.