CASE TEACHING NOTES
BMW Automobiles in the mid 2000s
This case explains the elements that make up BMW’s strengths and weaknesses and illustrates the circumstances that surround the group in the mid 2000s. After an outline of the automobile industry, the case examines the product portfolio and the performance of the automobiles division of the BMW group. Students are likely to relate readily to the issues in this case, since the product and brands of the BMW group are well known. Also, as the products in the case are very desirable to most people, many students are likely to own or desire one.
2. Position of the case
The case is best used as part of a strategy course dealing with positioning, branding, product portfolio and corporate strategy. It can also be used as part of courses that deal with strategic marketing issues, specifically brand development and management. The information on the automobile industry is limited, but sufficient for students to attempt some initial industry analysis, before moving on to consider the specific issues of BMW’s capability and positioning. The case may be presented to students in two main ways: • As an initial scenario that students will explore by themselves, with a general brief that requires them to identify and discuss the issues they see as critical in the case. Students who are used to an independent pattern of learning will favour this approach, and arguably they will learn more than in many other ways. This approach may also be extended to involve students in researching further some of the issues in the case, on the basis of an assessment of the existing information. As a self-contained scenario that is used by students as a source of information to answer a number of specific questions set by the tutor.
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3. Learning objectives
The main learning objectives that students should achieve after working through this case study are • • • • • • • Practising the competitive analysis of an industry Assessing the strategic capability of a company Practising the segmentation of a market Relating the factors that are key to the success in a market to the resources and competences that a successful player must possess Identifying positioning options Evaluating the importance of brand management as a competence that is critical to successful differentiation Choosing directions and methods for the strategic development of a company.
4. Questions for discussion
The case supports a number of questions that together will help students to achieve the learning objectives. The following are questions that students should be able to address from the information in the case. The questions also indicate the type of issues that students should be discussing if the more general teaching approach is used. 1. What main trends are identifiable in the business environment in general and in the automobile market in particular in 2004 that might affect BMW strategy? 2. Using Porter’s five-forces framework, attempt an analysis of the competition in the automobile industry in 2004; adopt the BMW perspective. Consider the time horizon of strategic planning, and attempt to identify what future changes are likely for that period in the light of the factors at play in the macro-environment. 3. What were the critical success factors in the market segments in which BMW competed? How do BMW’s competences compare to these? Was BMW able to acquire and maintain a sustainable competitive advantage? 4. Discuss BMW’s sources of competitive advantage. What route(s) does it appear to pursue on the strategy clock? 5. What directions and methods of strategic development does BMW appear to follow? Evaluate their effectiveness in light of your understanding of the market segments in which the group competes.
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