Bmw Ag: the Digital Car Project
This case is about a firm that needs to change radically its new product development process. The company has been successful throughout its history by developing high quality new products in a traditional way that extended back for decades. Customer demands are pushing for greater variety of products in shorter times. Competitors are responding to these demands and are on the way to cut their NPD process times by 20-30%. For the Company to get ahead of competitors and put itself as a leader, it needs to drastically redesign its new product development process. As Gilvan C Souza mentioned,1 the speed to market of new products need to match that of the industry category so the company can be successful.
1. What are the competitive challenges of the automotive industry in 1997 and beyond? How is BMW affected? In general, in the last decade the market has witnessed a power shift from manufacturers to consumers. The automotive industry did not escape this trend. Customers wanted to have more variety of cars, and more affordable ones without sacrificing quality. In order to meet this demand, automakers started focusing heavily on speeding up their process development as a competitive strategy. Many American and Japanese companies cut the speed to market considerably and were waiting to get into the European market. BMW was lagging behind competitor since its NPD process was very traditional and slow. The company had a very artistic way to develop new products and there was internal resistance to change it. The threat was clear: either speed up NPD or struggle with competition.
2. How would you evaluate the evolution of NPD at BMW? Although BMW started to change the old process by introducing computer aid technologies at the beginning of 1990s, and even though the NPD process had improved (see page 8 in the case), the engineering lead time didn’t show major improvements. The competition had much shorter development times than BMW. More
1. What are the competitive challenges of the automotive industry in 1997 and beyond? How is BMW affected? In general, in the last decade the market has witnessed a power shift from manufacturers to consumers. The automotive industry did not escape this trend. Customers wanted to have more variety of cars, and more affordable ones without sacrificing quality. In order to meet this demand, automakers started focusing heavily on speeding up their process development as a competitive strategy. Many American and Japanese companies cut the speed to market considerably and were waiting to get into the European market. BMW was lagging behind competitor since its NPD process was very traditional and slow. The company had a very artistic way to develop new products and there was internal resistance to change it. The threat was clear: either speed up NPD or struggle with competition.
2. How would you evaluate the evolution of NPD at BMW? Although BMW started to change the old process by introducing computer aid technologies at the beginning of 1990s, and even though the NPD process had improved (see page 8 in the case), the engineering lead time didn’t show major improvements. The competition had much shorter development times than BMW. More