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SUMMARY
Executive Summary
The motive of this essay is to give clear information about BMW ag’s entry
into the luxury and premium automobile sector. The flow of the essay would
start with the background and introduction about the company, then coming
over to the mark et factors that led company to enter INDIA, also about the
entry strategy in ter ms of corporate decisions they took for doing business
in INDIA and what compani es’ present strategy in INDIA is to gain the
market share.
Bayerische Motoren Werke G. m. b. H. Started operations in 1918, the
BMW g roup and even possess the brands like MINI and Rolls-Royce, the
trio being the c ore heart of super luxury brands in the worlds industry.
The BMW GROUP’S financial services also have a boosted stand in market
flagship of BMW brand In 2006 BMW focussed on one of the biggest and
fastest growing market of luxury and niche car sector which is INDIA and
also looking at the fate of the competit or Daimler Benz, grounded their
tents in INDIA. Also allowing space for more inv estments in INDIA
following financial year for over 30 million again in addition the initial
investment done. This is all for the premium automobile sector mark et in
INDIA which consist of about 1.3% which is in percent a small figure but w
INDIA a nd with the current market and economy this figure will certainly
go up at the r apid speed Now coming up to the factors which led BMW AG
Company Profile
BMW
• Company Potrait
• Company Management
• Business Intrest
• Corporate Facts
Mercedes-Benz
• Introduction
• Social Involvement
• SWOT Analysis
Hypothesis
Reseaarch Methodology
Data Analysis
Findings
Bibliography
Annexure
• Questionnare
COMPANY
PROFILE
BMW Motoren
Company Potrait
• Strategy
Identifying potential and encouraging growth. Knowing what we represent.
Recognising where our strengths lie and making the best use of every
essence the point of departure for new challenges. This is the philosophy
that inspires every individual at the BMW Group. It influences the
world and which win legions of new admirers every day. And a degree of
Group has its sights set firmly on the premium sector of the international
automobile market. To achieve its aims, the company knows how to deploy
The board of management consists of six members plus the chairman of the board.
Relations Director
Ian Robertson
Bertin Eichler*
Susanne Klatten
Horst Lischka*
Willibald Löw*
Wolfgang Mayrhuber
Werner Neugebauer*
Franz Oberländer*
Anton Ruf*
Maria Schmidt*
Werner Zierer*
*employee representatives
• Business Intrest
Along with its automotive concerns, the BMW Group's activities comprise
With BMW, MINI and Rolls-Royce Motor Cars, the BMW Group is the
world's only car maker to pursue a purely premium strategy for all market
Motorcycles.
Premium is the key word for BMW Group motorcycles as well. We have
enjoyed great success with our strategy: to develop and build the best
protection and safety, and provide outstanding customer service in the pre-
Olympic park is the nerve centre for an organisation which covers over 150
countries.
Our research and development centres are: BMW Group Research and
Group Engineering and Emissions Test Center, Oxnard, USA; BMW Group
Technology Office, Palo Alto, USA; BMW Motoren GmbH Steyr, Austria;
BMW Group Technology Office, Tokyo, Japan; BMW Group Development
Produktion.
The worldwide production network of the BMW Group is the backbone for
growth in all our global markets. Thanks to the close cooperation between
all of the plants, manufacturing takes place quickly and flexibly. This
(Austria), Goodwood plant (GB), Hams Hall plant (GB), Landshut plant,
Leipzig plant, Munich plant, Oxford plant (GB), Regensburg plant, Rosslyn
Assembly.
• Compliance
The BMW Group's corporate culture is shaped by clear responsibility,
mutual respect and trust. However, the risk of violations arising from
individual misconduct can never be completely ruled out. The BMW Group
makes every effort to minimize these risks wherever possible. For this
purpose, a Compliance Organization has been created and equipped with
measures and instruments to help employees and managers avoid legal risks.
• CORPORATE STRATEGY
Identifying potential and encouraging growth. Knowing what we represent.
Recognising where our strengths lie and making the best use of every
essence the point of departure for new challenges. This is the philosophy
that inspires every individual at the BMW Group. It influences the
world and which win legions of new admirers every day. And a degree of
Group has its sights set firmly on the premium sector of the international
automobile market. To achieve its aims, the company knows how to deploy
• Financial Overview
2005 2006 2007 2008 2009
Capital expenditure as a percentage
8.6 8.8 7.6 7.9 6.8
of revenues
Operating Cash Flow as a percentage 161.3 125.8 152.4 108.7 144.4
of capital expenditures in
Automobiles Segment*
Return of sales before taxes 7 8.4 6.9 0.7 0.8
Equity ratio
Industrial operations* 39.1 40.6 41.2 42.3 41.7
Financial operations** 10.4 10.4 6.9 5.4 6.0
Equity as a percentage of non- 35.7 37.9 38.4 32.5 32.1
current assets
Non-current provisions and liabilities
62.1 62.1 59.1 66.5 72.8
as a percentage of non-current assets
required by law (§161 German Stock Corporation Act) to report once a year
whether the German Corporate Governance Code (in the relevant version)
has been, and is being, complied with. Companies affected are also required
to state which of the recommendations of the Code have not been, or are not
being, applied.
Corporate governance in the BMW Group.
commonly shared trust and responsibility, has long been the basis for
managing the affairs of the BMW Group. The underlying corporate culture
at BMW is founded upon the principles of transparency, placing trust in
corporate governance code for the BMW Group, taking account of the
Group.
A coordinator responsible for all corporate governance issues reports
Board
• Sustainablity
order to achieve this goal the company is carrying out the largest product
and market offensive in its history. In doing so the company consequently
economical, but also ecological and social factors into all decisions and
processes.
It is the claim of BMW Group to substantiate the proposition of
sustainability and integrate it in to daily business life. The targets are clearly
underpins that companies can also reap financial benefits through active
1. BMW¶s product life cycle is similar to the product life cycle on 11-
1 because the overall shape is the same and so are the first two stages.
keep sales high. The maturity and decline stages have lower sales, so
their seven-year product life cycle, BMW adds a new model each
year. This repositions them back in the introductory stage. They also
stage, which is where the 3 and X series are currently. By adding new
possible.
and modifying the market. BMW modifies its product by adding new
features and other capabilities to the car. They modify their market by
owns Rolls Royce and Mini as well. They also use multiproduct
branding. The automobiles of BMW are named differently. BMW
strategically named it cars under the brand. All of the design names
are clear and easy. For example, a 328 is a 3 series car with a 2.8-liter
was easy to see the various options and what each package included.
This is good because personally I don¶t exactly know all the
automobile terms.
MERCEDES – BENZ
Mercedes-Benz has been associated with India for more than 50 years.
domains:
like:
Company Profile
Mercedes-Benz India has been delighting customers with strong brands and
The company has been the pioneer of the luxury car segment in India with
its inception way back in 1995. It is the only luxury car maker in India to
have such a wide range of cars. The different ranges available today are the
Class and the Maybach. We have also already introduced our high
petrol and diesel engines. The time difference between the global and Indian
launch of its latest models is constantly optimized. We strive to make them
automobile and represents quality and safety on roads throughout the world.
employees.
Based in Germany, Daimler AG with its business units Mercedes-Benz
of the life-cycle.
Japan and the USA. To prepare our employees for an effective collaboration
130g/km by 2015.
Competition - legal restraints on competition within the EU car industry
Taxes and Duty- MOT, price increased. Road tax directly linked to
amount of emissions
Subsidies- The Government has today met the automotive sector to
Frost,
other car manufacturers are finding it increasing difficult to sell cars and
UK
SOCIAL
The social factors can be broken down according to the following
demographics:
Age
Gender
Income
are not very popular with youngsters as the brand is expensive and
is very hard to get insurance on at such a young age.
cars ?
Age
Gender
Income
Which age group are interested in the Mercedes company?
are not very popular with youngsters as the brand is expensive and
cars ?
TECHNOLOGICAL
Safety- Advances in technologies such as shatter-proof windscreens, air-
bags, crumple zones and collapsible steering columns have made it possible
Safety sells
Plant Efficiency- New Production methods that
improve efficiency.
E- commerce
Gizmos
SWOT
ANALYSIS
SWOT ANALYSIS
Strengths
Strong brand name
Owners club
Successful F1 team
the government
Weaknesses
Price
Opportunities
Development of new models
BMW
AUDI
JAGUAR
ASTON MARTIN
ALFA ROMEO
Rivalry has led to firms producing similar range of vehicles, as well as
products etc.
THREAT OF NEW ENTRANTS
These include:
Designer Clothing
Expensive/Collector’s Furniture
Holidays
Luxury Homes
Jewellery
Boats/Yatches
factors. These include the position of rival suppliers, the quality of goods
and services supplied; the demand for goods and services; and the supply of
and rubber.
Additionally, since Mercedes-Benz prides its products on their quality,
scale of business they could offer the company and the presence of
alternatives.
means that across the board, the firms market share will
Strategic Strength
Strategic strength looks at the core competency of the business.
'basic' trading roles. Michael Porter (1980) pointed out 3 values that made up successful
core competency:
Provides consumer benefits
Of the core competencies, the two methods that are used are:
Product Differentiation
Product Efficiency
MERCEDES GENERIC STRATEGY
luxurious vehicle, as well as one that is up to par with the latest performance
figures.
STRATEGIC FIT
Strategic fit refers to how a firm adapts its business practices
with the brand. This will stay constant even throughout times of
economic upheaval.
Additionally, the good resale value of their products will mean that
buyers will not be as worried about the depreciation value of the car
Lastly, the businesses good relationship with the government and EU will
mean that they could rely on tax reductions and stimulus packages
On the downside, the price will still be a hindrance when trying to attract
compromise their luxury status), have low running costs and be highly eco-
efficient.
ADVANTAGES
manufacturing costs.
causal correlation among multiple phenomena. The term derives from the
Greek, hypotithenai meaning "to put under" or "to suppose." The scientific
method requires that one can test a scientific hypothesis. Scientists
scientific theories. Even though the words "hypothesis" and "theory" are
often used synonymously in common and informal usage, a scientific
hypothesis testing) that might be falsified on the basis of observed data. The
null hypothesis typically proposes a general or default position, such as that
between a treatment and the control. The term was originally coined by
tested does NOT hold." Often denoted H1. Synonym for 'maintained hypothesis.'
H1 :There is no significant difference in the customer satisfaction
level using cars of BMW Motors & Mercedes - Benz
RESEARCH
METHODOLOGY
Research Methodology
The purpose of methodology is to describe the process involved in research
work. This includes the overall research design, data collection method, the
Primary:
For my survey primary data have been used as a questionnaire to collect the data.
Questionnaire
A questionnaire is a research instrument consisting of a series of questions
and other prompts for the purpose of gathering information from
respondents. Although they are often designed for statistical analysis of the
responses, this is not always the case. The questionnaire was invented by Sir
Francis Galton.
Questionnaires have advantages over some other types of surveys in that
they are cheap, do not require as much effort from the questioner as verbal
or telephone surveys, and often have standardized answers that make it
simple to compile data. However, such standardized answers may frustrate
users. Questionnaires are also sharply limited by the fact that respondents
must be able to read the questions and respond to them. Thus, for some
demographic groups conducting a survey by questionnaire may not be
practical.
SECONDARY:
The secondary data has been collected from the following modes:
· Magazines
· Books
· Newspaper
Research Design is the arrangement for conditioned for data collection &
RESEARCH PLAN
· Type of study: For completing my study I have gone for sample study
because looking at
the size of population & the time limitation it was not convenient for me to
cover entire
population. Hence, I have gone for sample study rather than census study.
Sampling Plan
Sampling Unit
Sampling units are High Class and Educated people , Business Men etc.
Samples are collected via personal interaction or via electronic media.
Steps In Sampling
Sampling Frame:
The list of sampling units from which sample is taken is called sampling
frame.
Delhi City map was studied thoroughly and samples were selected from the
Total sample size is 50. The following sample size according to area wise is
as
follows:
10 Saket
20 Malviya Nagar
20 South Campus
SAMPLING PROCEDURE:
Sampling technique
right time and so the sampling were quite easy to measure, evaluate and co-
operative. It was a randomly area sampling method that attempts to obtain
(Balance sheet, Profit & Loss Account and Cash Flow ) and given by
· This study will be limited to only some areas of New Delhi only..
· It is only for short period of time.
· The sample size is only 50 so the sample may not be truly representative of
responses from 50 people in all. I had done my field work in the following
area.
difficulty during my project in the process of explaining and taking there
project, and ask them to co–operate with me. Mostly all the respondent were
aware of this type of surveys. So I didn’t face any type of difficulty in the
questionnaire.
DATA
ANALYSIS
Name: 50 Clients of Luxury Cars
Address:
Pin Code____________
Gender:
Male: 35 ( 70%)
Female: 15 ( 30% )
Age Group
Age:
1
2
1) Below18 : 0 3
4
5
2) 18-25 : 5
3) 26-35 : 20
4) 36-50 : 20
5) 51 and above : 5
Occupation:
1) Service
Occupation
2) Business
1
2
3) Student 3
4
4) Housewife
Q.1) In your Opinion Which car is the Best ?
Mercdes
a) BMW ( 68%) BMW
1 2
Strongly disagree
Disagree
Neither agree Nor disagree
Agree
1 2
3 4
i) Knowledgeable sales person
Agree : 30 %
Disagree : 10%
Neutral : 20%
1 2
3
iii) Display of merchandise is attractive
Agree : 70%
Agree : 50%
Neutral : 20%
Disagree : 30%
v) Variety/selection of merchandise
Agree : 40%
Disagree : 30%
Neutral : 30%
Neutral : 20%
Agree : 40%
Disagree : 30%
Neutral : 10%
Agree : 10%
Neutral : 10%
ix) Décor of the waiting area is pleasing
Agree : 70%
Disagree : 10%
Neutral : 20%
Yes : 90%
No : 10%
xi) Post sales follow ups are done regularly
Yes : 70%
No: 10%
Agree : 90%
Disagree : 5%
Neutral : 5%
xvi) Careful with personal information
Agree : 95%
Cant Say : 5%
Q.3) Are you aware of the following facilities provided by BMW Motors?
FACILITIES Yes No
i) Motors insurance
Yes : 60%
No : 40%
ii) Extended warranty
Yes : 80%
Cant Say : 20 %
iv) finance
Yes : 90%
No : 10%
v) Owner’s Club
Yes : 100%
No : 0%
vi) Genuine accessories
Yes : 100%
No : 0%
Q.4) Which Car Have the best Aftersales Service ?
a) BMW
b) Mercedes Benz
AfterSales Service
Mercede
BMW
1
2
Q.5) What is your overall opinion about BMW over Mercedes Benz?
Very Bad 0
Bad 5
Neither Bad Nor Good 20
Good 15
Very Good 10
Brand Comparison
1
2
3
4
5
Q.6) How likely would you recommend BMW over MERCEDES BENZ ?
Very Very
Unlikely Likely
1 2 3 4 5
1
2
1:0 3
2 : 10 4
5
3 : 25
4 : 15
5:0
Q.7) Which Car provide the Best Value for Money
a) BMW : 25
b) Mercedes Benz : 25
1
2
Q.8) Which Car provides you wide range of Accessories and Add-ons ?
a) BMW : 20
b) Mercedes benz : 30
Accessories
BMW
Mercedes
1
2
Q.9) Which of the following Features of BMW you pefer more over
Mercedes Benz ?
a) Sun Roof : 5
b) Auto Visulaizer : 1
c) Auto Sensors Wipes nd Park : 5
d) Control panel : 4
e) Drive Controls : 10
f) Cruise Controls : 15
g) Convertible Roof : 10
Accessories
1
2
3
4
5
6
7
Q.10) Which Company provides More Powerful and Well Tuned
Engines ?
a) BMW : 15
b) Mercedes benz : 10
c) Both : 25
Engine Preferrence
1
2
3
Q.11) Which Engine make you prefer the Most when you Buy a luxury
car ?
a) V6 : 9
Engine
b) V8 : 10
c) V12 : 15
d) VTVT : 10 CRDi V6
1
e) CRDi : 6VTVT V8 2
V12 3
4
5
FINDINGS
FINDINGS
On an average more than 73% people feel that the prices are affordable
whereas 12% do not agree, 74% believe that attractive discounts are offered
whereas 26% are not satisfied with the discounts offered. 20% said that the
test drives are not offered and 15% said that post sales follow ups are not
done regularly whereas 85% said that they were done regularly but people
excellent, careful with personal information and is value for money . The
overall opinion about Motors is very good. 86% people agreed that the sales
persons are knowledgeable and 14% strongly disagreed that the sales
persons are knowledgeable. 64% people agreed that the sales persons spent
enough time with them before the sales and 36% strongly agreed with this.
spent enough time with them during the sales, while 34% strongly agreed
that the sales persons spent enough time with them during sales and only 4%
disagreed with this. 60% agreed that the sales persons spent enough time
with them after sales, 26% strongly agreed with this and 14% disagreed that
the sales persons spent enough time with them after sales. 94% agreed that
the display of merchandize was attractive and 6% strongly agreed that the
display of merchandize was attractive. 91% agreed that the availability of
the product was there, 5% strongly agreed that the availability was there
strongly agreed that enough variety was there and 6% disagreed with this.
82% agreed that the vehicle was in good condition when delivered, 16%
strongly agreed with this whereas only 2% disagreed with this. 64% strongly
agreed that the prices are affordable, 21% agreed that the prices are
affordable whereas only 15% said that they neither disagreed nor agreed
with this. 55% agreed that the discounts offered are attractive, 34% strongly
agreed with this while 11% disagreed and said that the discounts offered
were not attractive. 80%agreed that the décor of the waiting area was leasing
while 20% strongly agreed that the décor of the waiting area was pleasing
74% agreed that the test drive was offered to them, 6% strongly agreed that
the test drive was offered while 20% disagreed with this. 59% agreed that
the post sales follow ups are done regularly, 26% strongly agreed and
18% strongly agreed, 12% neither agreed nor disagreed and 6% disagreed
with this.
82% said that the service at service station is excellent, 14% strongly agreed
while only 4% disagreed with this. 85% agreed that yes they were careful
nor disagreed. 94% strongly agreed that all the commitments were fulfilled
and 6% agreed with this. 98% said yes that they are aware about insurance
Benz was the market leader but BMW with its features and Design
Mechanism is successful in attracting the youth so the demand for BMW is
increasing.
Books:
MAGAZINES:
3. http://www.docasi.com/ 4. http://www.capitaline.com
6. Scridb.com
7. http://money.rediff.com/companies/
8. htttp://www.moneycontrol/com/
9. http://www.yahoofinance.com/t
10. http://www.carwale.com/research/cars/
ANNEXURE
QUESTIONARE
QUESTIONNARE
Gender:
Male Female
Age:
Below18
18-25
26-35
36-50
51 and above
Occupation:
Service
Business
Student
Housewife
Q.1) In your Opinion Which car is the Best ?
c) BMW
d) Mercedes Benz
Q.2) How long have you been associated with BMW or MERCEDES –
BENZ ? (in years)
a) less than 1
b) 1-5
c) 5-10
d) more than 10
Q.3) How would you rate BMW Motors on the following parameter?
Strongly disagree
Disagree
Neither agree
Nor disagree agree
Strongly agree
v) Variety/selection of merchandise
v) Owner’s Club
Q.5) What is your overall opinion about BMW over Mercedes Benz?
Very Bad
Bad
Neither Bad Nor Good
Good
Very Good
Q.6) How likely would you recommend BMW over MERCEDES BENZ ?
Very Very
Unlikely Likely
1 2 3 4 5
c) BMW
d) Mercedes Benz
Q.8) Which Car provides you wide range of Accessories and Add-ons ?
c) BMW
d) Mercedes benz
Q.9) Which of the following Features of BMW you pefer more over
Mercedes Benz ?
h) Sun Roof
i) Auto Visulaizer
j) Auto Sensors
k) Control panel
l) Drive Controls
m) Cruise Controls
n) Convertible Roof
Q.10) Which Company provides More Powerful and Well Toned Engines ?
d) BMW
e) Mercedes benz
Q.11) Which Engine make you prefer the Most when you Buy a luxury car ?
f) V6
g) V8
h) V12
i) VTVT
j) CRDi
Date:
Customer Sign.