Essay Case study of BMWs expansion into China - 2015 Words

Why has BMW planned to build its second factory in Shenyang, China? Introduction This case study will investigate the car manufacturer BMW and its recent plans to increase production in the Chinese market. BMW is a Transnational Corporation which can be defined as ‘a firm that has the power to coordinate and control operations in more than one country’ (Dicken, 2011, p.110). The automotive industry for years has been very static, but the automotive power is now shifting. Over the past decade there have been drastic changing patterns of consumption, for example China has experienced rapid changes in their GDP, growing by 10% per annum (World Bank, online). Car production is now shifting to new regions of the world with Japan and†¦show more content†¦For BMW this has meant that they have been able manufacture their vehicles in China without having to train highly skilled workers in Shenyang. BMW are therefore able to manufacture and sell their products in the same country, saving money on exporting the goods fully assembled. 3. Shenyang Shenyang is the 4th largest city in China and has been an important industrial centre for China since the 1930’s. In understanding why BMW have built factories in Shenyang, four aspects need to be addressed; Governance, embeddedness, transport and communication. Shenyang is an attractive place for TNC’s. Shenyang operates under an â€Å"open space† system of governance, which means that the Government has limited influence on its activities. Actors such as the Chinese government offer investment subsidies for companies such as BMW to locate there. One clause of receiving this subsidy is that each foreign company has to strategically couple with a Chinese company. Therefore in 2004 when BMW first moved into China they made a joint venture of â‚ ¬450 Million with Brilliance Automotive, one of China’s leading car manufacturers (BBC, 2003). This has proven a success and BMW are continuing this venture with their expansion, investing $73.5 Million in a new factory (Global Auto Sources, online). The Manufacturing embeddedness of Shenyang is a key reason for why BMW have experienced success and why they are expanding inShow MoreRelatedBmw Brand Analysis Essay3876 Words   |  16 Pagestwin-kidney shaped radiator grills on the 303. Its design can still be found on the manufacture’s cars today. After World War Two, the company was faced with destroyed factories and a three-year ban on producing anything because of an allied mandate for BMW’s participation in the manufacturing of rockets and aircraft engines during the war. In 1951, the manufacturer began producing cars again despite the lack of any solid financial backing, and it wasn’t until 1956 that BMW recovered with its famousRead MoreBavarian Motor Works: Business Analysis and Recommendations2501 Words   |  10 Pagesowning a brand which can be equated to efficiency, quality as well as engineering expertise (Trout,2005).BMW therefore has maintained its position as the be the worlds leading premium car manufacturer in terms of volume and sales (BMW Group,2011).BMWs three automobile brands namely BMW, Rolls-Royce and MINI are noted by the group to have set new individual records. A total of 113,000 clients are noted to have purchased a Husqvarna or BMW motorcycle. BMW Group (2011) also noted that their FinancialRead MoreBmw : Redefining Premium Brand13383 Words   |  54 Pages |4 | |Figures............................................................................................................... | | | BMW Case Study |5 | |.....................................................................................................................Read MoreEnvironmental Analysis Bmw Group5069 Words   |  21 Pagesglobal motor vehicle market by increasing sales to more than two million automobiles per year† (BMW Education, 2007). Since 2007, BMW Group has two future targets: to be profitable and to enhance long-term value in times of change (BMW Group, 2012). BMW’s focus on â€Å"engineering excellence† continues to promote the company’s strong, successful brand image. At the heart of BMW Group is the ambition to produce vehicles that are exclusive yet also available for a mass market. BMW produce and market popularRead MoreBmw Five Forces5073 Words   |  21 PagesTable of contents BMW: case study analysis Q1: Business environment and main trends in 2004 The global car market started decline in 2003, led by market falls in North America and Western Europe. Other regions of the world led by East Asia are seeing further car market expansion in 2003. In 2004, projections for livelier economic growth underpin the resumption of car market growth in Western Europe and North America. (Langley 2004, p691-711) Although the more stringent laws can eat away atRead MoreThe Strategy of International Business7464 Words   |  30 PagesThe Strategy of International Business Chapter Outline OPENING CASE: The Evolving Strategy of Coca-Cola INTRODUCTION STRATEGY AND THE FIRM Value Creation Strategic Positioning Operations: The Firm as a Value Chain Organization: The Implementation of Strategy In Sum: Strategic Fit GLOBAL EXPANSION, PROFITABILITY, AND PROFIT GROWTH Expanding the Market: Leveraging Products and Competencies Location Economies ExperienceRead More Comparison of Supply Chain Management Practices Essay5015 Words   |  21 Pageseffectiveness. These practices ensure production and distribution of merchandise in the right quantities, locations, and time. Efficient supply chain management can provide a source of competitive advantage to an organisation (Christopher, 2012). In the case of Wal-Mart, supply chain management practices are targeted towards lowering cost price, the basis of Wal-Mart’s competitive strategy. This is done by avoiding unnecessary middlemen and seeking to purchase products directly from manufacturers. As aRead MoreManaging the International Value Chain in the Automotive Industry60457 Words   |  242 Pagesenormousconsequenceforthe economy.InGermany,onejobinsevenis dependentontheautomotiveindustry;inthe UnitedStatesitisoneinten,andthisindustry isbecomingincreasinglycrucialintheemergingeconomiesaswell.IndiaandChinaarewell ontheirwaytobecomingleadingcentersof productionandtechnology.Theircompaniesare enteringtheglobalarenaasseriouscompetitors justasAmericanmanufacturersareshowing alarmingweakness,havingrestedfortoolong onRead MoreTesla Motors15249 Words   |  61 Pagesmentioned because it will be a start with the improvement, one’s end i s another one’s beginning. 1. Introduction Chapter To following introduction chaper, we specify to study about the Electric cars industry. Tesla Motor is the electric car company which presented in Denmark not so long time ago. There are challenges to deeply study internal and external in order to answer our research question and sub questions with marketing strategies models, financial analysis and statistics. 2. Motivation TheRead MoreTesla Motors15249 Words   |  61 Pagesmentioned because it will be a start with the improvement, one’s end is another one’s beginning. 1. Introduction Chapter To following introduction chaper, we specify to study about the Electric cars industry. Tesla Motor is the electric car company which presented in Denmark not so long time ago. There are challenges to deeply study internal and external in order to answer our research question and sub questions with marketing strategies models, financial analysis and statistics. 2. Motivation