The BMW Business Model

Introduction: Bayerische Motoren Werke (BMW), the world’s 16 largest car maker and a leading player in the luxury car segment where approximately one out of every 10 of the five million cars sold annually was BMW. There were limited companies in the world that could compete with BMW’s performance, handling, and safety. Automotive Critics regularly voted BMW’s models the best car in the world in their respective class. Approximately, 70 % of BMW’s sale came from Europe with the remaining 30% coming from the United States and Japan.

By the late 1980’s, Japanese car producers began to challenge the European high end producers. European producers didn’t take Japanese competitors as a potential threat. However, between 1986 and 1989 Japanese

Initially, only one new models came down the assembly line in between 10 of the old models, this continued over time until the old model was phased out. This mixed model ramp up permitted better utilization of fixed assets, however created a lot of confusion among workers and made the logistics even more complicated. Parts that did not consistently fit or had frequent changes in the production process added to the confusion and made it more difficult for production worker to settle into a routine.

Lack of attention to minor problems:

Further complicating ramp up process, many problems arose during pilot production and much focus was shifted to solve major problems leaving minor problems unresolved. After putting all the efforts and resources in fixing major problems there was no time left to solve minor problems. This affected the quality of new model being produced. Currently, it took BMW an average of six months to achieve full production volume. Some within manufacturing organization felt that this time could be cut in half, if more of the many minor production and quality problems were solved earlier.

Customer

This will help improve quality and minimize defect earlier in the process. BMW should reduce the parts the parts that being used to help reduce the time it takes to assemble a vehicle. BMW can release new models more quickly and frequently by producing new models on separate assembly line. This will avoid confusion and speed up the process to achieve full volume production capacity. BMW can keep both current process of hand-made design and the use of pre-production process. This will allow BMW to keep flexibility in design and help ensure customer satisfaction while reducing prototype cost and lead