Prof. Edward Rogoff
Mr. Partha Mitra
BMW AG: The Digital Car Project (A)
This case study presents how BMW, a German automobile, motorcycle and engine manufacturing company, is trying to reduce development turnaround time using new technologies. To build new development capability three areas of opportunities are emphasized, managing automotive development including exterior styling; process/organizational changes; and adapting new computer-aided technologies. This strategic move is responsible for BMW historically strategic product positioning in automotive industry in 1990’s.
Most important facts
1>History of BMW – In 1916, Gustav Otto founded Bayerische Motoren Werke which is better known worldwide by BMW. In
1923 it set a world speed record of 134 mph. The legendary BMW 328 sports car, debuted in 1936, won numerous international race events. In 1951, when the firm started car production in Munich, it made egregious marketing errors. In 1959, the company’s weak financial position almost led to a takeover by its traditional rival Mercedes-Benz in Stuttgart. By the 1970s, BMW exported two-thirds of all its cars and three-fourths of all its motorcycles and had established subsidiaries on six continents. In 1996, BMW employed more than 116,000 persons worldwide and sold its products in 140 nations ranging from the United States to the Fiji
Islands, total turnover of DM 52.3 billion. In mid-1990s BMW had a world market share of only 1.5%, company acquired the British
Rover Group in the 1990s and made several major series of automobiles which, following European tradition - 7-Series(totaled about 51,000 cars), 5-Series(totaled about 190,000 cars), 3-Serie (totaled about 400,000 cars).
2>Automotive environment in 1990s - In 1996, the European market sported some 50 car brand names, with about 300 different base models and virtually thousands of derivatives. The European market