420003175000880009408795muna jumaa al makheeti – H00324068450000muna jumaa al makheeti – H00324068420003175000175001870710A case Study on the Stakeholder and Customer Service Issues of BMW450000A case Study on the Stakeholder and Customer Service Issues of BMW
Table of Contents
TOC o “1-3” h z u INTRODUCTION PAGEREF _Toc512350831 h 1Company’s Background PAGEREF _Toc512350832 h 1ISSUES REGARDING CUSTOMER SERVICE AND STAKEHOLDERS PAGEREF _Toc512350833 h 1Customer’s Service PAGEREF _Toc512350834 h 2Customer Relationship Management PAGEREF _Toc512350835 h 3Stockholder’s Issues PAGEREF _Toc512350836 h 3Stakeholder’s Issues PAGEREF _Toc512350837 h 4AREAS FOR IMPROVEMENT PAGEREF _Toc512350838 h 5Summary PAGEREF _Toc512350839 h 6References PAGEREF _Toc512350840 h 7
INTRODUCTIONAny of the multinational company runs primarily on the basis of its products and services but it’s not only that. Besides excellent performance of the products and services, there are other matters that requires great attention to detail as well. Maters like making sure that the customer is always satisfied and his preferences should be the top most priority of the business. There are many departments of people that come before and after the customer and those are suppliers and stockholders. Any Multinational Corporation is composed of many smaller units that combine together and form a business that can operate globally.
Company’s BackgroundBayerische Motoren Werke (BMW) was founded as a result of the amalgamation of three different companies in Munich, Germany in the year of 1917 CITATION BMW18 l 2057 (BMW, 2018). The business model and products of BMW has transformed greatly over the period of time. BMW has come a long way from producing aircrafts engines to one of the most coveted and luxurious Car and motorcycle brands of the world. The company aided the German militants with the war materials in the World War 2 and their productions plants were absolutely dismantled by the Nazis when they took over Germany. This was one of the darkest time in the history of the company CITATION Ana15 l 2057 (Anastasia, 2015). The company’s financial position went down drastically and the company started producing pots and pans to keep up with the company’s image. However, BMW came out of the dark times stronger and becoming better. They found that the key to adversity is diversity. Currently, BMW has manufacturing units is over 30 countries and is spread across four different continents CITATION BMW18 l 2057 (BMW, 2018).
ISSUES REGARDING CUSTOMER SERVICE AND STAKEHOLDERSThis section of the paper will highlight the prevailing and previous issues for different stakeholders of the company.
Customer’s ServiceCustomers are the biggest asset of any organization. They have the ability to influence the company’s performance greatly. In the words of MendelowCITATION Eil15
l 2057 (2015), BMW places great respect in the decisions of their customers. Their vision and mission statement is customer oriented. The company makes its utmost best efforts to keep up with the preferences of customers and keep them updated with the latest trends of the industry. The customers of BMW belong to the upper classes of the society CITATION YeL14 l 2057 (Ye Lu, 2014). They might be insensitive to prices but they expect high quality and excellent after sales service. The reason behind their business with BMW is the pre conceived high class quality of the cars of BMW and they expect nothing but the best irrelevant of the cost that is associated with the brand CITATION Eil15 l 2057 (Quek, 2015). BMW has been working on seeking new ways to meet customers’ requirements and providing them with value added services that will keep the customers locked with the brand. The delivery time is minimized to a standard time of 2-6 weeks with extra care provided to the post sales service and woo the customers exactly how they have been promised by the brand CITATION Eil15 l 2057 (Quek, 2015). The added feature of customizing your car by BMW has created many benefits for the company and the customers. From customer’s point of view, they can actually design the car with the features they want to make a part of their dream car and eliminate the features that cost extra bucks to them CITATION BMW18 l 2057 (BMW, 2018). Now, with the perspective of BMW, the company gets to minimize the cost of holding inventory, take slack from the production processes and the cost of non-selling items is being saved. According to MorganCITATION Eil15
l 2057 (2015), this creates a deep level of satisfaction among the customers and they are highly satisfied with their brand. It also reduces the chances of customers switching over to competitors. Custom made cars provides a competitive advantage to BMW and it also generates 40% of extra profit than the sales of their pre designed cars.
Customer Relationship Management
The customers of the car manufacturer, BMW are reported to be highly loyal to their brand. The fact that the customers of the brand belong to the upper class of the society makes the pricing strategy easier for the company CITATION Ait13 l 2057 (Cardenal & Garcia, 2013). All their customers want is nothing but quality service and product. There can be no compromises made on the quality of the service. There are no major differences between the cost of products among the competitors and BMW so there are very high chances of brand switching if the customers are kept highly satisfied CITATION Fra01 l 2057 (Figge, Hahn, & Schaltegger, 2001). To overcome that threat and maintain the bonds with their customer, BMW came up with a special Customer relationship management program which provides extra services to their clients and maintain the customer loyalty. This program also enables customer who own i3 to rent out fuel powered cars for vacations and road trips CITATION Ken12 l 2057 (Philips, 2012). As per the study conducted by Abubakrag CITATION Eil15
l 2057 (2015), BMW has the highest number of satisfied customers and the ratio of satisfied customers is of 65%. To foster the relationship and retain customer loyalty, BMW offers extended services to their loyal customers of long term service contracts and loyalty programs. SchmidtCITATION Eil15
l 2057 (2015) also mentioned that a higher rate of retention and customer loyalty will increase the customer base of BMW and the switching cost for the buyers will be risen. This will prevent the loyal customers and new customers to switch their brands to competitors.
Stockholder’s IssuesThe major stockholders of the company are the investors of the company who build up the company. They provide the basic source of working capital to the firm. According to GrinCITATION Eil15
l 2057 (2015) the Quandt family has most of the shares of the company. They hold the most part of the shares of the company. The executives have to keep them in sync with the company’s performance through annual reports and performance summaries. The issue that might arise with one family having most of the shares of the company is the excessive control of that family with the business decisions CITATION YeL14 l 2057 (Ye Lu, 2014). However, the aim of BMW is to keep their stockholders happy and satisfied by outperforming the competition with higher sales targets and achieving higher profits. The stockholder’s support is very important for the business and BMW tries to maximize the stockholders worth through their innovative and creative approach CITATION Eil15 l 2057 (Quek, 2015).
Stakeholder’s IssuesThere are many people who combined together to form their stake in the company. The stake holders can be anybody who has any direct relationship or whom is effected by the business decisions and performance. Customers, employees, suppliers, stockholders, competitors, government and a few more.
There is problematic yet distinctive concern about the supplies of BMW. The supplies that BMW incorporates in its business requires extreme attention to detail and of high quality. These supplies are produced by a very limited number of people are able to produce supplies with these specifications CITATION YeL14 l 2057 (Ye Lu, 2014). The company relies heavily on these suppliers and they possess greater bargain power. An issue that can arise with having a limited number is that with any changes occurring in the field of automobile or any regulations changed will be costly to the company CITATION Büh15 l 2057 (Nicole, Noah, Karina, & Oliver, 2015). BMW uses Just In Time strategy for inventory management. The issue that had been arising with JIT inventory management is the risk of input shortages and disruptions. To overcome this issue, BMW has entered into strategic alliances with the major industry suppliers to enhance the efficiency level of supply chain (BMW, 2014).
The biggest hazard in any automotive industry is the emissions of Co2 and the emission of gasses that harm the environment of the surrounding places. To reduce the emission of Co2 and BMW has become a part of green organizations to some extent CITATION Ken12 l 2057 (Philips, 2012). BMW has also invested in creating cars that fuel efficient and performs in the exact same manner as the other cars would. In the field of product innovation, BMW used renewable energy, resource consumption and resource-efficient supply chain CITATION Ait13 l 2057 (Cardenal & Garcia, 2013).
Another major concern for BMW is the unevenness of the markets. The sales of USA have been rising at a standard ratio but the rest of the countries lack behind in sales. The employees of BMW are taken great care of. BMW constantly invests in the development and skill development of its employeesCITATION Fra01 l 2057 (Figge, Hahn, & Schaltegger, 2001). BMW has extended the workforce quantity and it believes in diversifying the employees. It hires people from the local economies helping the economies of the host countries CITATION Büh15 l 2057 (Nicole, Noah, Karina, & Oliver, 2015). BMW is determined to engage the aging workforce in its company. The company also focusses on employing people with special assistance and disabilities CITATION Ken12 l 2057 (Philips, 2012).
AREAS FOR IMPROVEMENTBMW is a pretty successful business empire and it has been operating in many countries. There are certain areas of improvement for BMW and recommendations
The company operates in the automobile industry which is directly related to the concept of emitting hazardous fuels and poisonous gases. Company should invest more in becoming environmentally friendly.
Different countries have different tax structures, BMW should dedicate a special team for managing the differences among tax structures of different countries.
Constant innovation and research and development is require by the mission of BMW to stay its position of the market leader.
Provide extra post sale services to the customers like engine maintenance and car services to keep customers loyal.
Extend the stockholders base from one family to a set of diverse people.
SummaryBMW is one of the largest car manufacturing luxury brand in the automobile industry. Their customers are absolutely loyal and dedicated to their brand. The company have not been scandalized or involved in any of the shady practises which is superb. For a company who has been operating in more than 30 countries, provision of services and products of excellent quality is a milestone to achieve in itself. The company has been acting quite responsible socially and there are major initiatives taken by the company to overcome the environmental issues like emission of gases or fuel consumption. The company has big missions of maintaining their position as the world’s leader brand in providing premium cars till year 2020 and they are most likely to do so.
References BIBLIOGRAPHY Anastasia. (2015, August 13). The History of BMW. Retrieved from Cleverism: https://www.cleverism.com/the-history-of-bmw/
BMW. (2018). About BMW. Retrieved from BMW: https://www.bmw.com/en/footer/about-bmw-com.html
Cardenal, A. P., ; Garcia, F. C. (2013). QUALITATIVE AND QUANTITATIVE ANALYSIS OF BMW. Barcelona: University of Barcelona.
Figge, F., Hahn, T., ; Schaltegger, S. (2001). Stakeholder Value Added. Center fro Sustainibility Management. Lisbon- Portugal: United Nations.
Nicole, B., Noah, D., Karina, E., ; Oliver, K. (2015). Evaluation of Corporate Responsibility Approach of BMW Group Module Report. Zurich: ZHAW School of Management and Law.
Philips, K. (2012). CSR Analysis BMW. Academia.
Quek, E. (2015). Building ; Sustaining Strategy:Bayerische Motoren Werke (BMW) – Automotive Industry. TMC Academic Journal , 9-18.
Ye Lu. (2014, APRIL 23). Stakeholder Marketing of BMW. Retrieved from Prezi: https://prezi.com/fauhuhdlrqz3/stakeholder-marketing-of-bmw/