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Published by: projectmaker2010 on May 02, 2010
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Executive SummaryThe motive of this essay is to give clear information about BMW ag’s entry intothe luxury and premium automobile sector. The flow of the essay would start withthe background and introduction about the company, then coming over to the market factors that led company to enter INDIA, also about the entry strategy in terms of corporate decisions they took for doing business in INDIA and what companies’ present strategy in INDIA is to gain the market share.Bayerische Motoren Werke G. m. b. H. Started operations in 1918, the foundationstone was laid as late as 1916 as Bayerische Flugzeugwerke AG (BFW), it then changed into Bayerische Motoren Werke Aktiengesellschaft (BMW AG) in 1918.In today’s date. The list of ten largest automobile manufacturers features BMW group and even possess the brands like MINI and Rolls-Royce, the trio being the core heart of super luxury brands in the worlds industry.The BMW GROUP’S financial services also have a boosted stand in market and alsothe motorcycle sector is doing business successfully.BMW INDIACompany setting up headquarter in gurgaon (the ncr) BMW INDIA is 100% subsidiaryof the BMW group. The investment initially in INDIA is around 1.4 billion INDIAn rupees.BMW INDIA is a German producer of cars and motorcycles marketed under flagship of BMW brandIn 2006 BMW focussed on one of the biggest and fastest growing market of luxuryand niche car sector which is INDIA and also looking at the fate of the competitor Daimler Benz, grounded their tents in INDIA. Also allowing space for more investments in INDIA following financial year for over 30 million again in additionthe initial investment done. This is all for the premium automobile sector market in INDIA which consist of about 1.3% which is in percent a small figure but when it comes to numbers it is around 10 million perspective customers in INDIA and with the current market and economy this figure will certainly go up at the rapid speedNow coming up to the factors which led BMW AG to invest as fdi into INDIA.
1. Infrastructure- this is the aspect where BMW in INDIA checked out that INDIA is really good at infrastructure and is just ready to accept a premiumcar , and also the distribution channel in INDIA attracted them to invest up because dealerships in INDIA to setup was not a difficult task.2. Market attractiveness- Also one of the key factors inviting BMW wasthe market of INDIA which was the huge in number untouched by merely one competitor and the tremendous opportunity to the growth of the same, to play the volumegame3. Political and governmental structures- the structures of political and government of a country plays an important role for companies to decide on foreign investments or not. And if yes then what type of investment and how much and to choose the way of direct or partial mode. Also the behaviour of governmentof country like the country is transparent or not or the red tape governs are there or not are the points was taken care by BMW.4. Profit retention factors- the profit retention factor means the company taken interest in what the government policies are for foreign companies andthe taxation norms for them when BMW launched in INDIA they were facing 9.5 inflation that was very good for them.5. Economic environment- The stability of the economy (National and Local) and its currency in which transactions occur. The cost of land and other facilities, and the extent of free trade in the market.6. Legal and regulatory environment- The legal system and laws being practised by the country and the state on import of FDI and on technology transfer. Laws on Intellectual property rights of the company and extent of other tariffs and trade barriers.7. Human resource factors-In a term, BMW INDIA will employ around 200 people; up to 600Additional jobs will be created in the dealer and service network Also as INDIAn dealerships offered also included the good management and businesspassion here in INDIAn channel, they were sure that they are not going to face the challenge to beat the market.So by the analysis of the factors like their company strategy and internationalfactors and strategic decisions they chooses, we can say that BMW entry strategyis the one high control strategy.As for the following reasons,They are the wholly owned subsidiary of the group, meaning the entry mode is nonequity this is a major criteria for determining the entry strategy of a company, as this undertakes a heavy investment and in terms of serious business companywill overlook for the longer term business in the region, and won’t be much offlexible or in clear words there exit mode will be a major risk and will cost company a fortuneAlso now after an entry mode strategy selected, There is also a strategy known as “timing for entry” that is the successor for entry mode selection here in BMW case the entry timing is the mimetic behaviour which means following competitive behaviour and the rise for the figures too that is 2500 units of last year gone up to 7650 units per financial yearYour browser may not support display of this image.Presently,12 dealers represent BMW in the INDIAn market; Bird Automotive
(Gurgaon, NCR), Deutschen Motoren (New Delhi); Navnit Motors (Mumbai),Infinity Cars (South Mumbai); Krishna Automobiles (Chandigarh); Navnit Motors(Bangalore), Delta Motors (Hyderabad), Kun Exclusive (Chennai), Bavaria Motors(Pune), OSL Prestige (Kolkata), Parsoli Motors (Ahmadabad) and Platino Classic(Kochi) . Owing to an exuberant growth potential, BMW is hopeful of multiplyingits annual sales volume and has already chalked out an extensive dealer strategyto support its plans.This enormous expansion strategy , and total devotion towards the customer satisfaction and the region of business is made out by a naked eye in the form of a corporate strategy by BMW , using the multi domestic strategy type in cultivatingthe management.As for the facts, we can say that BMW undertaking the multi domestic strategy. By fulfilling the following,* BMW appointing andreas schaaf as the delegated country head and given thecomplete authority and responsibility to manage and grow the INDIA operations byfollowing the core strategy and make his own sub strategies by taking care of the market need, customer feedback and the company issues.* As told by peter kashpova the ex INDIA head of BMW , he had to undergo themajor and minor changes in the country wide management practices, following thechanges in the managerial conduct book, to serve the country need as per.* BMW got many of the SUV.s and FAMILY sedans as per the INDIAn roads nad family sizes , this decision also agrees with the characteristics of multi domestic strategy.* It helps spreading the work load over the country and the headquarters staff and is not only delegated to either one.* The product can be better adapted to local markets by using local productssince it is manufacturing in the country thus reducing costs and improving customer satisfaction.* Better able to bring in customers since the management has a better understand of the customers physic. Your browser may not support display of this image.As for the product choice BMW choosen the best of mix from its international market, BMW dealerships presently display the BMW 3 Series (325i, 320i and 320d,320d Highline) and BMW 5 Series (525i, 530i, 520d, 530d and 530d Highline)that areproduced at the BMW Plant Chennai. BMW dealerships also display the BMW 6 Series(650i Coupé and 650i Convertible), BMW 7 Series (750Li), BMWX3 (X3 xDrive25i, X3 xDrive20d) and the BMW X5 (X5 xDrive48i and X5xDrive30d) which are available in the country as CBU’s (completely built-up units). The BMW M3 Coupé, BMW M3 Convertible, BMW M5, BMW M6 Coupé, BMW M6 Convertible, BMW 6 Series Individual andBMW 7 Series Individual can also be ordered at BMW INDIA dealerships.Indeed the chosen strategy is one of the best to go after the trans-global strategy to enter a international market for any firm, but there are limitations withthis strategy too but then also it is the best of choice and option for BMW INDIA, as in INDIA, if u follow the trans-global strategy the firm will have to sta

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