Supplying BMW

SupplierBusiness, April 2009, Pages: 67

BMW – The world's largest premium car maker – is struggling to keep its books in the black. Overexposure to the markets which are most severely affected by recession is taking its toll because of the excessive reliance on sales generated through financial services. But nevertheless, the company is very well placed to weather the downturn thanks to a strong cash position, a portfolio of truly globally sellable vehicles and a strong reputation in the eyes of customers for delivering state-of-the-art technology.

BMW's biggest challenge lies in translating the growing sales it achieved over the last decade in tangible profits for its shareholders. An all-round strategy has been set by the management board to achieve this, which hinges on productivity improvements and heavily on cost-cutting steps. The latter measures are focused on purchasing, which is expected to take the lion's share of the cost-reduction, and on R&D. And these two areas are the ones which have the most potential to cause significant risks for the car maker.

On the procurement side BMW could keep losing favour with suppliers because of new business practices accompanying the increased price pressure being exerted on suppliers. On the other hand, less in-house R&D could entail BMW losing one of its core advantages in the premium segment. However, both sectors will be affected by the management's decision to set up appropriate targeted alliances with other OEMs, even Stuttgart archrival Daimler, to share the burden of capital intensive activities such as R&D and to spot synergy savings from joint procurement.

Overview

Production Strategy

Purchasing Strategy
- Supplier Selection
- Pricing Policy
- Approach to Quality
- Research and Development
- Modules & Systems

Oem Survey Results For Bmw
- Negotiations
- Quality
- Technology
- Organisation
- Trust
- Attractiveness

Swot Analysis of Supplying Bmw

Bmw Global Footprint

Major Suppliers by Component Sector
- Chassis/Underbody
- Electrical/Electronic
- Exterior
- Interior
- Powertrain

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