Professional Documents
Culture Documents
ACKNOWLEDGEMENT
The project that I have undertaken required a lot of information gathering and guidance which has been provided by various people at various stages of the project. For this purpose I would like to thank the following people: Mr. Ameet Sao, who gave me an opportunity and freedom to work on this project and study the style of operation and work culture of BMW India Pvt. Ltd. Ms. Pooja Wadhwa, an intern in BMW India at the Chennai plant, who provided me with information about the company, let me understand the working pattern of managers at the Chennai plant. Mr. Bill Gates, Chairman, Microsoft, without whose advanced software this project would have not been possible. Mr. Page and Mr. Brin, Founders, Google corp. whose web portal allowed me to search for relevant information for my study on the chosen company.
Contents
1) Company Profile
3) Strategic Objective
4) Visions
5) Mission
6) Marketing strategy
Company Profile
Headquartered in Chennai BMW India Private Limited is a 100% subsidiary of the BMW Initial investment in India is 1.1 billion Indian Rupees Employed around 200 people
BMW 3 Series (330i, 320i, 320d Corporate Edition and 320d Highline) BMW 5 Series (523i, 520d, 525d and 530d) BMW X1 (To be launched soon)
Imported
BMW 5 Series (535i CBU) BMW 5 Series Gran Turismo (Limited Edition) BMW 6 Series (650i Coup and 650i Convertible) BMW 7 Series (740Li, 750Li, 760Li and 730Ld) BMW X3 (X3 xDrive25i, X3 xDrive20d) BMW X5 (X5 xDrive50i and X5 xDrive30d) BMW X6 (X6 xDrive50i and X6 xDrive30d) BMW X6 M BMW M3 (Coup and Convertible) BMW M5 BMW M6 (Coup and Convertible) BMW Z4 (sDrive35i Roadster).
13 potential production locations were analyzed for setting up the production plant in India. Chennai was chosen as the most feasible option because of the following reasons: Automobile manufacturers Automotive suppliers Qualified labor Cost balance for production location Infrastructure International Airport, Sea Port, Road Network
Strategic objective
The BMW Group is the leading provider of premium products and premium services for individual mobility.
Vision
Uniqueness through diversity, Leadership, taking Risk, courteous
Mission
"To become most successful premium manufacturer in the car industry"
Marketing Strategy BMW India studied the Indian markets and found it to portray immense dynamism and this is how BMW formulated its marketing strategy.
BMW India decided to stand their ground in a fiercely competitive environment with new ideas and the strength to promote our new products. In absolute terms, India cannot compete with other highvolume single markets yet. But, the future belongs to India. If you want to benefit from the dynamics of the Indian market later, you need to act today. This is what they did. They were prepared to meet the challenges head-on to ensure their company's success. These qualities enabled them to weather stormy conditions and continue to invest in our future. They were able to anticipate trends and that gave them an edge. Their strategy has been to embark on an aggressive product offensive with rapid market expansion through greater customer intimacy. They have addressed these through competency-enhancement across all levels seeking new business opportunities. As pioneers in bringing luxurious dealerships to India, they set a decisive course by setting up BMW dealerships of international standards across all metros. They have set very high standards in service quality and customer care in India, which meet the expectations of their customers.
And this is exactly how they position themselves to redefine luxury, focusing on individuals, recognizing future challenges, promoting creativity, and being the leading supplier of luxury products and services for individual mobility. They always concentrate on their strengths and thus on the Implementation of the luxury claim which they convey with each of their vehicles. They do not make compromises. This has been their strategy in India, where they currently have 16 BMW dealer facilities. As we embark on the next phase of our dealer network strategy, BMW India will further expand operations by establishing its presence in 10 more cities.
Owing to an exuberant growth potential, BMW India has further chalked out Phase II of its dealer development strategy to support its plans Phase II In Phase II, BMW India will further expand operations in 10 additional cities in India.
Presently, BMW India is present at 17 locations in the Indian market; BMW Studio (New Delhi), Deutschen Motoren (New Delhi), Deutschen Motoren (West Delhi), Bird Automotive (Gurgaon, NCR), Navnit Motors (Mumbai), Infinity Cars (South Mumbai), Krishna Automobiles (Chandigarh), Navnit Motors (Hosur Road, Bangalore), Navnit Motors (Millers Road, Bangalore), KUN Exclusive (Hyderabad), Kun Exclusive (Chennai), Bavaria Motors (Pune), OSL Prestige (Kolkata), Parsoli Motors (Ahmedabad), Platino Classic (Kochi), Kun Exclusive (Coimbatore) and Sanghi Classic (Jaipur). BMW dealerships presently display the BMW 3 Series and BMW 5 Series that are produced at the BMW Plant Chennai. BMW dealerships also display the BMW 6 Series, BMW 7 Series, BMW X3, the BMW X5, the BMW X6, BMW Z4, and the BMW Gran Turismo which are available in the country as CBUs (Completely Built-Up Units). The BMW M3 Coup, BMW M3 Convertible, BMW M5, BMW M6 Coup, BMW M6 Convertible, BMW X6 M, BMW 6 Series Individual and BMW 7 Series Individual can also be ordered at BMW India dealerships.
3-Series Rs. 27-33 L 5-Series Starting Rs. 39 L 7-Series Rs. 80-90 L Luxury car maker BMW India achieved 100 per cent growth in its car sales this year.BMW India have already sold 2,703 cars till November and aims to sell 2,800 by the end of this year against 1,387 last year, companys president Peter Kronschnabi told reporters.
Market Share and Performance BMW India Ranks as the Number One in the Luxury Car Segment in India
BMW India Achieves Leadership Position by Increasing its Market Share in the Luxury Segment of the Indian Automotive Market to over 40% BMW India is the number one in the luxury car segment in India and portrays a symbol for dynamic and forward striving people. BMW India increased its market share in the luxury segment of the Indian automotive market to over 40% in 2009 (from 9% at the end of 2006). With 3619 cars delivered to customers in the calendar year 2009, BMW India has achieved the highest sales by a manufacturer in the luxury car segment in a year till date. In 2009 BMW India sold -- BMW -- BMW -- BMW -- BMW -- BMW 3 Series 1155 units 5 Series 1590 units 6 Series 28 units 7 Series 350 units X3 101 units
-- BMW X5 287 units -- BMW X6 83 units -- BMW Z4 25 units 2007, 2008 and 2009 were demanding years for BMW India and, at the same time, the most successful market entry for BMW in any country recently. Various activities initiated during this period have provided BMW India with a solid basis to develop a strong foundation.
Future Anticipation We still have three months left in 2010 and the ultimate winner will depend on how well the market receives the new F10 5-series and the upcoming BMW X1. Even the all new X3 and 6-series could come before the end of the year tilting favour towards BMW. In comparison, Mercedes Benz does not have any big launches coming up this year. BMW has just got a new India head and everyone is eagerly looking at him what new strategy it comes up with. Audi has launched their all new A8 this year as well. Their competitor to the X1, the Q3 is under consideration for India as well. So who will eventually win in 2010? We predict that BMW will take over sales as they have a slew of launches in the second half of this year. The new 5-series has also got off to a good start beating the E-class in its first month. Audi are getting to the top and they may give Mercedes and BMW serious threat next year. Audi as a competitor The Audi Q3 will go into serial production in 2011 in Spain and once that happens, the cross coupe crossover from Audi to take on German rival BMW might just make just make it to Indian shores too. Now, plenty of stuff happening at Audi India seems to suggest just this. First things first, Audi India is nowhere near Mercedes Benz India and BMW India when it comes to car sales. This, despite of Audi having an excellent portfolio of world class premium cars in its arsenal. Audi Indias weak links have been its pricing and its brand awareness amongst the Indian premium car buying populace which is way lesser than Mercedes Benz and BMW. Also, Audi India being the latest of the entrant amongst the German car makers is clearly not as aggressive a BMW India, which really has turned the heat on Mercedes Benz with a slew of cheaper and in many cases better products. Audi India however has been content playing a distant number three and so far hasnt done anything really, for it to move up and out of this position. On the other hand, rivals like BMW and Mercedes Benz are chalking out very aggressive plans to get into the INR 20-25 lakh segment with their offerings. BMW India till now did not experience much competition from Audi, but the coming year and beyond might not be the same. Audi, as read above has a better growth rate in terms of sales. This could be the turning point for the luxury car segment in the Indian markets and for Audi as well.
SWOT Analysis
An Internal and corporate analysis in terms of strength, weaknesses, opportunities and threats (SWOT) will assist in gaining an understanding of where BMW is currently in terms of strengths and where improvement is required within the business and what outside environmental threats it may face as well as what new opportunities are available to the company in the short and medium term. STRENGTHS
OPPORTUNITIES
Diverse ranges of Products Strong Cash Flow Position Increase turnover and trading profits Strong Balance Sheet World's leading Premium Quality Automobile Manufacturer Brand Awareness Human resources Capabilities to turn resources into advantages
New Products Innovation & Alliances Customers demand change to more comfortable and relevantly cheap cars Diversification New Technologies in Automobiles
WEAKNESSES
THREATS
Perception of High Prices Customer disinterest Environmental issues: Pollutions Buyer sophistication and knowledge Substitute products or technologies
New & existing competition Volatility in Price of Fuel New legislations Consequences of the oil crisis Economic recession Market shift to globalization Takeover bids Far-East (Japan, Korea, etc.) Automobile companies expansion Extremely high competition for customers and resources
Step 1
The basic body of the vehicle is unloaded Vehicle Identification Number Engraving
Step 2
Light weight plugs, heat insulators, strikers are fitted Rubber stripes are fixed in the door and mirror positions
Step 3
Trim Line Quality Gate Overhead Final Line Wheel alignment Final quality gate
Step 4
E- COS Test Rolling and ABS Test Road Test Sinusodial Test Cobble stone Track ABS Track S- Test Reverse Test Water Test
1. Design of processes
1.1 it essentially means the various choices that we make with respect to the flow of parts in a manufacturing system 1.2 the 3 important aspects that influence process are volume, variety and flow 1.3 volume indicates the average quantity of products produced in a manufacturing system 1.4 variety refers to the number of alternative products and variants of each product that are produced in a manufacturing system 1.5 flow provides an understanding of how the components and material in an operations system get transformed from the raw material stage to finished goods stage 1.6 BMW follows a Continuous Flow System. The reasons for the same are: 1.6.1 The Assembling Process, as explained above, is characterized by streamlined flow of processes in the operating system 1.6.2 The production process is sequential and the required resources are organized in stages 1.7 In the category of Continuous Flow System, BMW follows a Mass Production manufacturing system. The reasons for the same are: 1.7.1 the volume of products is high 1.7.2 the number of variations in the final product is low
1.7.3 each product flows into each department in a streamlined fashion 1.7.4 within each department, there is an orderly flow of raw material and component 1.7.5 in the context of planning and scheduling of activities , this type of structure is called as flow shop 2. Layout 2.1 it deals with physical arrangement of various resources that are available in the system with an objective to improve performance of the operating system thereby providing better customer service 2.2 BMW adopts a Product Layout. The reasons for the same are: 2.2.1 the resources are placed to follow the sequence dictated by the product 2.2.2 the process is standardized 2.2.3 simpler operational control is possible 2.2.4 high volume is achieved
3. Cycle time 3.1 The cycle time for making a BMW is 14 Hours (2 working days) 3.2 The entire assembling process is explained above
Quality at BMW
Garvin had proposed 8 quality dimensions and BMW seems to follow all of them. The 8 dimensions followed by BMW are: 1. Performance 2. Features 3. Reliability 4. Conformance 5. Durability 6. Serviceability 7. Aesthetics 8. Safety The products offered by BMW undoubtedly perform outstandingly on each of the dimensions mentioned above. The Quality Principles followed by the company are: a. Prevention instead of Reaction Forceful redirection of the quality activities from after the fact fault correction to anticipatory fault prevention b. Conserve best practice, safeguard new techniques Assuring best practice by product and process design kits, safeguarding innovation and changes
c. Mature concepts little changes Influence the design of processes and indicators to be able to evaluate the product and process maturity at any time d. Quality adds value Initiation of projects and initiatives to achieve the quality targets while considering cost and return principles e. Our concepts lead to top level customer satisfaction Transfer of customer feedback to concrete product and process measures f. Quality is a leadership task As BMW creates value for money for its customers, it provides them with the best possible services at the time of sale as well as after sale. Before any car is ready to be dispatched for the showroom in different parts of the country, the car is taken through various tests at the plant. A BMW model undergoes the followings tests: Rolling and ABS Test The performance of the vehicle is checked by rotating its wheels at a speed of 120-150 km/hr. the engine performance and gear box performance is evaluated. Lights are checked. The vehicle is put into drive mode as well as manual mode to check performance ABS means Anti lock braking system. The performance of all the 4 brake lines corresponding to 4 wheels is checked while running the engine. The pumps and the pressure levels are also checked. Road Test Before the road test begins, the seat covers are removed, the viper and engine compartment are checked. The vehicle is made to run for the first time to check the parts setting. The vehicle is driven to various test tracks to test its performance.
Sinusoidal track The track is in sinusoidal waves. The vehicle is driven at a speed of 20 km/hr to check whether the parts are welded properly or if any crack is there. Cobble Stone Track The vehicle is made to run on a track having stones to check if there are any loose parts. If so, then it will make noise and the defect can be found out. ABS Track The vehicle is made to run on a track on which water has been sprayed. This track helps to check the stability and control of a vehicle in slippery conditions. S-Test The vehicle is made to run in S-Shape to check the fitment of parts Reverse Test The vehicle is driven in reverse direction to check for missing parts and if any abnormal noise is being produced during driving. Water Test The vehicle is placed in a water station for 8 minutes. The water is sprayed from all directions on the vehicle. This test helps to find out any leakage in the vehicle.
After the water test, the vehicle is sent to the car wash area where it is completely washed and dried. After finishing all these tests, the vehicle is sent to the covered parking area and is considered to be ready for use.
Step
Specification of Demand Supplier Selection Request for Quotation Purchase Requisition Purchase Requisition Release Strategy Evaluation/ Negotiation Purchase Order creation Purchase Order Release Strategy Goods Receipt Strategy Invoice Receipt Payment
Step 2
Step 3
Step 4
Step 5
Step 6
Step 7
Step 8
Step 9
Step 10
Step 11
Request for Quotation (RFQ) should contain the following specification a. The supplier must accept all BMW Payment terms and conditions b. The delivery terns must be stated on the quotation c. The quotation must be dated and stamped when received Purchase Requisition (PR) must contain the following specifications a. b. c. d. Supplier Name Commodity required Cost center Value as per quote
Invoicing must contain the following specifications a. Total price including base price, sales tax, service tax and excise duty b. It must also include the currency of transaction
As read above, BMW India is known for its quality and creating value for money for the customers, this is reflected through their purchasing strategy. Selection of suppliers for BMW is done through a very formal procedure to avoid any sort of quality issues. Supplier selection is based on the result of evaluation based on Supplier Performance Scorecard The aspects covered in the Supplier Performance Scorecard are as follows:
Aspects
Maximum Points
35 25 20 20 100
Considerations for the Quality Aspect a. No. of issues / volume of car set supplied b. Count of PIS / Quantity Supplied c. No. of repeat quality issues / No. of Quality issues d. No. of VIN affected / No. of cars produced e. Count of MCDR s / No. of cars produced f. No. of VIN reworked / No. of cars produced g. No. of Quality points at supplier end / No. of quality issues at BMW
Considerations for the Cost Aspect a. Timeliness in quote submission b. Response to our queries c. Cost break down and details of the offers d. Cost escalation control plan e. Productivity realization f. Exchange rate review g. Identify parts for further localization / new product initiative
Considerations for the Logistics Aspect a. Packaging issues b. Schedule adherence Timeliness Considerations for the Management Aspect a. TC Planning and smooth implementation without disturbing production b. Invoicing and documentation issues
Mandatory Documents
Approved organization chart, Job Description document, Manpower Requisition Form Portfolio results employees of
Mandatory Tools
Output
Completed forms, Job description sheet of the required position
Collection of applications
List of applicants with their applications Candidate and interview schedule A copy of required documents Orientation Schedule
Job Document
Description
Short listed applicants for interview and finalization of interview schedule Selected candidates with agreed target start date Completion formalities of joining
Pre employment formcurriculum vitae, interview evaluation form Employment required documents candidate Orientation form contract, relevant from evaluation
Communication charts
Feedback on orientation obtained, training material provided, signed JD collected Updated organization chart
Result of evaluation
A vision of things to come BMW is aiming to fortify its number one position in the Indian luxury car market, with 2010 car sales of more than 3,000. BMW India, therefore, also aims to expand its operations by the year 2010-2011. For this purpose, the company is constantly engaged in recruitments. The present employee strength of BMW Plant Chennai is 120. The company aims to recruit around 50 more people and increase its strength to 160-200 by the year 2010-2011. The sources of recruitment used by the company for this purpose are as follows: External Sources mainly Campus recruitments, Recruitment agencies Campus recruitments The selection process for candidates undergoing campus recruitments is as follows: a. Technical round / Aptitude Test Competency tested: Communication Skills
All candidates are required to appear for the aptitude test and group discussion. The short listed candidates are required to appear for personal interviews. Internal Sources mainly transfers and promotions
The Proposal
School Elementary School Anjur Kunnavakkam Thenmelpakkam 1 3 Middle Higher Secondary Students School 50 1 Total
Facilities
2 water None purifiers Floor tiles Cement floor Salary for 2 teachers for H Sc. School For first 3 ranks in SSLC and H Sc. exams
Managing Director General Manager- IT and Logistics Team LeaderPhysical Logistics SpecialistCustoms Clearance Specialistclaims mgt Specialistmaterial SpecialistPPC Manager IT SpecialistVDC
2. Vertical Differentiation 2.1 It refers to hierarchical levels in an organization 2.2 Hierarchy in BMW is that Managing Director- General Managers-Deputy Manager-Specialists- Team Leader-Associate
3. Span of Control 3.1 It refers to the number of subordinates a manager can efficiently and effectively supervise 3.2 Ideally, the number is 5-6 subordinates 3.3. In BMW, the span of control ranges from 3-7 subordinates
4. Centralization it refers to the extent to which the decision making authority is concentrated at the top management In BMW, the final decision lies in the hands of Managing Director
5. Formalization It refers to the extent to which the rules, procedures, communication, and instructions are written down and followed by organizational members. In BMW, formalization is high Factors causing high formalization are Nature of task is routine, nature of product is Mass, Predictability of outcome is high, Cause and Effect relationship is high, Presence of functional departments, low variety, high volume
6. Specialization 6.1 It refers to the work specialization which is the result of division of labor 6.2 In BMW, there is high specialization 6.3 Reasons for the same are that every functional head is an expert in his or her area.
Dissent Respect, trust, fairness Leading by example Sustainability Society Independence Associates
BMW India will enter luxury motorcycles segment As part of the companys plan to spread its brand across product segments, BMW India will enter the luxury motorcycles market.
Andreas Schaaf, president BMW India, announced that the company has already commenced the due diligence procedure and a final decision will be made in another month. We are currently investigating whether its a good idea or not to enter the Indian market (for motorcycles). No final decision has been taken yet but the investigation would be over in the next couple of weeks, Schaaf said. However, he stated that an immediate plan of establishing an independent manufacturing base in India for producing motorcycles is not on the cards at the moment. The company has also chalked out plans to sustain its supremacy in the luxury market. In the next 2 years, BMW India would make a fresh investment of Rs 70 crore in its wholly-owned facility in Chennai, Schaaf said. Furthermore, the company has also increased capacity to 5,400 units from the current 3,000 units. Since 2007, BMW has invested Rs. 110 crore for expansion purpose in India. India is a market that holds great potential for the future for us and is a building block in our global market offensive, BMW AG board member Frank-Peter Arndt said. Apart from this, the company also plans to enter the preowned car business - rival Mercedes-Benz is also adopting the same strategy. Schaaf said that this move of opening an entirely new segment will widen the customer base for BMW products in India. In June this year, Mercedes-Benz India launched its global program of 'Proven Exclusivity' in India by providing second hand models to buyers. BMW will also raise its manpower strength to 400 by the end of this year it is 200 currently. At the same time as we are expanding capacity, we will also be gearing the plant to produce a further model, XI, for the Indian market, starting in November 2010, he added.