Future of the Autonomous Automobile: A Strategy for BMW

1. Describe the competitive landscape and explain how globalization and technological
changes shape it.

BMW is a well known automobile brand which has been around for more than a 100 years now.
Through the years it has formulated numerous plans and strategies using which it transferred
from an aircraft engine manufacturer to a car and motorcycle manufacturer in 1928. Since then
this industry has come a long way and now is in a phase of pushing it to new boundaries through
fully autonomous vehicles. The company or brand to be able to achieve this feat will have a huge
competitive advantage and will likely to become a leading company in this industry with a global
market to capture. For such a position, many well known brands like BMW, Audi,
Mercedes-Benz, Chevrolet and even Google have been investing into this research. Though there
are many uncertainties and obstacles in this path, these companies are envisioning the future and
striving towards it, creating high competition in the market.

The technological advancement of the world has made it such that the companies and brands are
no longer competing in the products that already exist, but instead everyone is looking to stay
one step ahead of all competitors and competing in being the first one to bring the future into the
present. While having such high goals set for themselves, globalization has allowed these
companies to gather information, technological resources as well as capable human resources
which have aided them in working towards their goals. However, the fierce competition means
that all available resources are scattered among the rivals, which is why companies are now
acquiring and formulating alliances to combine available information and resources in order to
progress at a higher rate. For instance, currently, ​Google is looking for a prospective automotive
partner, GM acquired the creator of a self-driving accessory and BMW is working with Chinese
search engine giant Baidu.

The current rate of technological advancement is so high that all fields, sectors and industries are
growing faster than ever. The same is the case with the automobile industry, where if any
company is unable to grow, change and adapt at the same rate, they will be left behind. Thus, all
capable brands and companies are competing rigorously to become the first company to release
fully automated vehicles.
2. Use the industrial organization (I/O) model to explain how firms can earn
above-average returns.

The Industrial Organization model explains how the external environment affects the
profitability potential of any firm rather than the firm’s own resources and capabilities. For a
firm to earn above-average returns using this model, the firm should study the general economic,
industry and competitor environment to locate an industry with high potential for returns.
Moving forward, the firm should then work towards formulating strategy best suited for the
industry and acquire and develop assets and skills needed within the firm required to implement
the strategies. ​Firms employing the industrial organization model usually earn above average
returns either by standardizing their products to achieve economies of scale or by differentiating
products which could then be sold at premium prices to the customers.

In the automotive industry, BMW and its competitors usually have similar resources especially
in the technological aspect. So what exactly helps the firms achieve above average returns is the
way they choose to formulate their strategies in respect to the changes in their external
environment including changes in the government policies, BMW along with its competitors are
working towards developing fully autonomous vehicles, so for BMW to achieve greater return
than its competitors is to develop the vehicles faster and selecting a proper market segment for
the automated vehicles. ​Another benefit of the industrial organization model is the prevalent
sociological, economical, political or technological barriers which can keep new competitors out
of the segmented market. BMW’s work with the Chinese search engine can help them in
strengthening their position in the market because of their ties with firms outside of their
industry, which can also add up to their profitability potential.
3. Describe vision and mission and discuss their value.

The vision of a company identifies the future potential of a business and sets it as a primary goal
for the company. It determines what it wants to ultimately achieve.
The mission statement of the company describes the needs of their customers and which firms it
intends to compete with.

Vision : To be the most successful premium manufacturer in the industry

Mission: To be the world’s leading provider of premium products and premium services for
individual mobility.

The company’s vision statement clearly states that the primary goal it has set for itself is to rank
as the No.1 premium manufacturer in the automobile industry. ​BMW’s vision statement shows
that the company is all about the leadership it can depict in the manufacturing industry.

The company’s mission focuses more on providing premium products and services. BMW
focuses on bringing about satisfactory products with unique features by considering the needs of
their customers. Their products being both user friendly and excellent performance reflects the
lifestyle of their customers on how much they enjoy premium products with technology of
autonomous cars in their products.

BMW’s core values comprise “responsibility, trust,appreciation,openness and transparency.” The

core values of the company agree with the belief of the founder of this company. Despite the
business model shifted from aircraft manufacturer to motorcycles and cars, the company has kept
up its principles.