Value Chain Analysis of BMW

BMW (Bayerische Motoren Worke) AG is a German automotive manufacturing multinational corporation. Karl Rapp, Camillo Castiglioni, and Franz Josef Popp established the automobile company in 1916. Today, we’ll discuss the value chain analysis of BMW supply chain analysis; primary and supporting activities in the process of value chain analysis Example Company. They are inbound and outbound logistics, operations, marketing, and customer service; infrastructure, HRM, technology, and procurement as an application of the value chain analysis process.

Substitutes of BMW

• Zorya
• Volkswagen
• General Motors
• Hyundai
• Daimler AG
• Toyota
• Renault Nissan
• Ford
• Chevrolet

The Value chain analysis of BMW supply chain analysis would analyze the primary and supporting activities in the process of value chain analysis. They’re inbound and outbound logistics, operations, marketing, and services; infrastructure, HRM, technology, and procurement. Here’s the supply chain analysis of BMW value chain analysis company example as follows;

Value Chain Analysis of BMW

Let’s discuss the primary and supporting activities involved in the process of value chain analysis of BMW supply chain analysis. It is an application of value chain analysis based on Porter’s model; some of the key elements and components of value chain analysis are as follows;

Primary Activities of BMW

Some of the five main primary activities in the value chain analysis of BMW supply chain analysis are as follows;

Inbound Logistics of BMW

I-Large Supplier Network

BMW deals with approximately 13,000 suppliers in various countries across the globe. The supplier’s network plays a key role in the automobile company by sourcing high-quality raw materials and supplies at the optimum cost. However, the automotive brand procures raw materials and components from suppliers in the following countries;

• Germany – 42.6%
• Eastern Europe – 19.7%
• NAFTA – 15.9%
• Western Europe – 15.8%
• Australia and Asia – 4.6%
• Africa – 1.4%

II-Suppliers’ Proximity

Since the production and manufacturing facilities and the assembly lines of the automobile brand BMW are in Eastern Europe and Germany. The company prefers to deal with suppliers that are in close proximity to the production and assembling units. However, it helps the company to make a smooth supply of products and goods and decrease the logistical cost.

Outbound Logistics of BMW

I-Dealership Contracts

Instead of hiring distributors, the company develops dealership contracts with the showrooms to approach the end consumers. The branded authorized showrooms have a worldwide network in urban areas; they earn a percentage of commission on every sale.

• 80% sale – through showrooms, stores, and offline channels
• 20% sale – through personalized and customized cars

Operations of BMW

I-Business Divisions

The automobile brand BMW has segmented its business operations into the following divisions;

• Financial Services – offers financial credits, BMW cars and motorcycle financial leasing for retail customers, and it contributed roundabout 14% profit to the company’s revenue
• Motorcycles – the motorcycle segment contributes roundabout 23% of revenue to the company’s profitability
• Automobiles – The automobile segment generates approximately 18% revenue
• Other Areas – include car-sharing services, insurance, and others that contribute significantly to the company’s revenue and profitability

II-Manufacturing Facilities

According to an estimate, the premium automobile brand BMW has roundabout 31 production and manufacturing facilities in over 15 countries across the globe. The automotive company is running its retail operations in roundabout 150 countries across the globe.

III-Robotic Technology

In order to improve efficiency in its production and manufacturing facilities, BMW employs robotics technology. The robotic work helps the company set up door sealant to keep the water and noise outside of the vehicle once it’s closed. Robots perfectly perform boring repetitive tasks and it decreases the risk of errors and mistakes.

Marketing & Sales of BMW

I-Multiple Media Channels

BMW employs multiple traditional and digital media channels for the promotion of its automobile vehicles. The automotive brand has successfully established a strong brand image on social media platforms and developed a large database of fan following. It is the most cost-efficient method of approaching the mass audience worldwide.

II-Sponsorships

Along with marketing and promotion, BMW sponsors various mega sporting events and it helps the automobile brand to connect with the audience at the emotional level. Some of the events that the company has sponsored are as follows;

• South Africa National Rugby Union Team – 2011 to 2015
• BMW International Open in Munich – since 1989
• BMW Masters in China – 2012 to 2015
• PGA Championship – since 2007

Services of BMW

I-Quality Service

The main competitive advantage of BMW is offering after-sale top-quality service to its automotive customers. In fact, the MINI brands of BMW have earned the membership of the Institute of Customer Service. The company earned the “New Car Retailer of the Year” award in 2015 for its remarkable customer service.

Supporting Activities of BMW

Some of the main supporting activities in the value chain analysis of BMW supply chain analysis are as follows;

Infrastructure of BMW

BMW has established a strong infrastructure for its two main business divisions; automobiles and motorcycles along with financial infrastructure to smoothly conduct transactions. The CEO and Chairman of the board of directors closely collaborate with each other to manage the corporate affairs of the company. However, the company has set up various units and departments like procurement, legal, finance, HR, and others and every unit has a specific director or head of the department.

HRM of BMW

BMW has employed approximately 150,000 employees to manage its global operations and smoothly perform various functions. The HRM department of the automobile brand plays a key role in attracting and recruiting talented employees. In fact, the human resource department helps the company create a favorable workplace environment, creating workplace diversity, gender equality, and equal opportunities for women.

Technological Development of BMW

According to an estimate, BMW invested approximately 7.1 billion USD in research and development. The automobile brand has established 16 research facilities and employed 15000 employees in those facilities. They help the company to innovate and develop new designs, styles, and technology to gain a competitive edge in the market.

Procurement of BMW

BMW deals with multiple suppliers to purchase materials, raw suppliers, spare parts, and components in various countries across the world. The automobile brand is highly cautious about responsible sourcing, procuring, and quality material in its supply chain network.

Conclusion: BMW Value Chain Analysis Example Company | Application of Value Chain Analysis Process 

After an in-depth study of the value chain analysis of BMW; we have realized that BMW is the world’s leading retail automobile brand. If you are learning about the BMW value chain analysis example company; then you should keep in mind the abovementioned primary and supporting activities. They’re inbound and outbound logistics; operations, marketing and sales, and services; infrastructure, procurement, HRM, and technological development as an application of the value chain analysis process.