Entrepreneurship Innovation in BMW

The assignment assesses the corporate entrepreneurial health of BMW Group through the theories of entrepreneurial intensity and Corporate Entrepreneurship Climate. The analysis focuses on BMW's innovation strategies, risk-taking approach, and sustainable development objectives. The company's CEO, Harald Krüger, and his efforts are evaluated. The research is based on secondary information from authentic sources such as the company's website and official documents.

Running head: ENTREPRENEURSHIP INNOVATION IN BMW
ENTREPRENEURSHIP INNOVATION IN BMW
Name of the Student
Name of the University
Author Note

Executive Summary
The purpose of the assignment is to assessing corporate entrepreneurial health and in order to so
the organisation that has been selected is BMW Group. The German multinational company has
over the years established itself as one of the pioneers in mobility services providing the people
with innovative options in the automobile and motorcycle industry. The company has been one
of the leaders of the market until recently overtaken by a direct competitor. However, the
company has been incorporating new and innovative ways to capture the market. The current
CEO of the company is Harald Krüger and his strategies and efforts have been assessed. It has
been observed from the research that BMW Group has high degree of entrepreneurial intensity
and supportive Corporate Entrepreneurship Climate.
It is observed form the analysis that the company has been going through a period where the
company is not at the top of the industry. The strategic decisions that are now being implemented
by the higher management are thus in sync with improving the competitive advantage of the
company. Innovation has been a part of the business model and thus the company invests a
significant amount of the resource in research, research also indicates market research as BMW
is a company which is customer oriented. This approach of the organisation has led the company
in developing the services in such a way that the customers have the facility to customise the car
accordingly.
Entrepreneurial intensity of BMW Group and Corporate Entrepreneurship Climate are the two
theories that are explored in the assignment. It has been observed that the company has high
degree of inclination towards both the factors which makes innovation an evident and extensive
part of the organisation. As an entrepreneur the CEO of the company focuses on the requirement
trend of the industry for example: electric car introduced by Tesla, which is a direct competition
to the company.
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Table of Contents
1. Introduction..............................................................................................................................3
About the company......................................................................................................................3
Mission Statement:......................................................................................................................3
Vision...........................................................................................................................................3
2. Theoretical Concepts...................................................................................................................4
3. Research Approach......................................................................................................................5
4. Data Analysis and Discussion.....................................................................................................5
Part A: The entrepreneurial intensity of BMW Group................................................................5
Part B: The Corporate Entrepreneurship Climate (CEC) of BMW.............................................8
5. Conclusion.................................................................................................................................10
6. Reference...................................................................................................................................11
7. Appendix....................................................................................................................................13
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1. Introduction
An Entrepreneur is a person with a vision for a venture (Hitt & Duane, 2017). He or she
is an individual who strategically devices decisions to establish as well as take a business idea
forward. Martin et al. (2013), state that there are several general characteristics of a successful
entrepreneur such as: passionate about the idea, self motivated, hard-working and disciplined,
risk taker etc. According to Kirzner (2015), an entrepreneur is responsible for any kind of
liability that is associated with the business venture. In this assignment two concepts of
entrepreneurship will be discussed entrepreneurial intensity and Corporate Entrepreneurship
Climate for BMW Group.
About the company
The Bayerische Motorenwerke or the BMW is a German automobile and motorcycle
manufacturer. The company was formed by the amalgamation of 3 companies established in
1916. The company used to make aircrafts and aircraft parts. It is one of the major automobile
manufacturers in the world. The company headed by Harald Krüger focuses on the sustainable
development in the fields of automobiles (Bmwgroup.com, 2018). The philosophy of the
company is to develop a future for the mobility industry and ensure to leave a bright future for
the coming generations. The company focus on the road safety and efficiency along with the best
in class designing while providing luxury to its consumers. There are 30 production areas located
in 14 countries.
Mission Statement:
The prime mission of the company is to become the leading car manufacturer of the
world by 2020 (Bmwgroup.com, 2018).
The mission statement of the company focuses in the development of the company in the
light of the global market development. BMW focuses on becoming the global leaders of the
automobile manufacturing focussing on providing the best in class and technology and luxury to
its consumers.
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Vision
“To be profitable and to enhance long-term value – from a technological, structural and
cultural perspective”
The vision statement of the company takes into consideration the long term roles that the
company plays in the society (Bmwgroup.com, 2018).
2. Theoretical Concepts
Innovation is one of the most commonly used strategies by organisations to maintain an
edge over the competitors in the market. Innovation is the process of developing a new approach
to an existing idea (Bowers & Khorakian, 2014). Based on the scale of operation and the nature
of the products or services provided by the company decisions of innovation are implemented in
the strategic formulation of the decisions. Innovation can be in the process or product depending
on the need of the company the strategies is devised (Schneider & Spieth, 2013).
Disruptive innovation: There are various types of innovation which can be incorporated in the
business. Disruptive innovation is a concept that is coined by Clayton Christensen, it is
characterised by ideas that helps products or services to displace the established market
(Christensen et al., 2015). Some of the example of disruptive innovation is: The concept of
Amazon Go, Netflix etc.
Risk and innovation: According to Morris et al. (2011), depending on the various type of
innovation incorporated by the company the level of risk associated changes. There is always
certain degree of uncertainty associated with any decision that is taken on behalf of a company
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Figure 1: Risk and Innovation
Source: (Morris, Kuratko & Covin, 2011, p69)
Entrepreneurial intensity: According to Morris and Sexton (1996), entrepreneurial intensity or
EI is level of entrepreneurial virtue exhibited in running a given organization. In order to
understand the degree of EI factors such as innovation, pro-activeness and attitude towards risk
is taken into consideration.
Corporate Entrepreneurship Climate: This concept determines the ways in which the external
environmental factors such as the structure of the company and the culture support the
entrepreneur (Kuratko et al., 2014).
3. Research Approach
The research that is undertaken to write the assignment is based on secondary information.
This means that the data that is used in the assignment are already available. No new information
is collected in order to fulfil the requirements of the paper (Mackey & Gass, 2015).
The information that is gathered is taken from documents that are available for the public
use. The documents that are used are ensured authentic; articles published in renowned journals
are taken from online library like Google Scholar. In order to avoid any kind of misleading
information doctoral thesis papers, dissertations and patent documents are omitted. The journal
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articles that will be used in the assignment are peer-reviewed which further authenticates the
information. In order to gather company specific information, the company’s website and official
documents from the BMW are used (Flick, 2015). Apart from self report, information gathered
from the official websites and documents published by BMW Group, such as annual reports etc,
information from people who are not associated with the company will also be considered for
example news articles published by renowned publishers etc.
4. Data Analysis and Discussion
Part A: The entrepreneurial intensity of BMW Group
BMW Group is headed by Harald Krüger, who is the current CEO of the company. He
has been voted as the most popular manager in Germany by Glassdoor, which is one of the
world’s leading platforms for the employees (Press.bmwgroup.com, 2018). BMW group has
always been an organisation that focuses on motivating the people to be creative and innovative
in their approach. Over the years of operation the company has set and brought about a number
of innovations in the automobile and motorcycle industry (Bmwgroup.com, 2018). However, the
current focus of the company is on developing the manufacturing technology in order to attain
the objective of sustainability (Chang, Chang & Chen, 2017). The company recognises the
responsibility it has towards the society and the environment and thus has made sustainable
development one of the major objectives of the business. The company accepts and entertains
innovation in the process of the business as well as in the developing the products and thus there
are a number of innovation strategies that are undertaken by the company at the same time. Not
only that there is a section in their official website that welcomes an innovative solution from
general people as well (Bmwgroup.com, 2018).
Frequency of entrepreneurship
The entrepreneurial events taking place within a given period of time is referred to as
frequency of entrepreneurship. Harald Krüger has been the Chairman of the Board of
Management and Chief Executive Officer of BMW since 2015 (Bloomberg.com, 2018). Since
the time he has taken the office there have been a number of changes that the company has
undertaken. During his tenure in the office Mr Krüger has faced a number of challenges and
barriers, like the diesel issues in Europe, electrification of the cars as a trend in the industry and
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intense competition from old as well as new players in the industry (Nica, 2017). Mr Krüger is
focused on the objective of placing the company back as the market leader by 2020 and in order
to do so he is focusing on inspiring creativity and innovation. The focus will be on the sales
target of two segments: luxury SUV with BMW X7 and the new lifestyle care BMW X2
(Boeriu, 2018). Along with this he has also set a strategic realignment of the company where the
complete focus will be on the customers and their requirements (Bmwgroup.com, 2018).
Degree of Newness
Under the leadership of Mr Kruger the company has focused upon the threats of the
business environment for example: serious concerns regarding the development of electric car
developed by Tesla. The company is working towards developing a mass production of hybrid
and electric cars as the Mr Kruger believes that this is one trend in the industry which cannot be
overlooked and in the long run the company will come up with mainstream electric model (Nica,
2017). The innovation strategies that are undertaken by the company are in sync with the
requirements of the business as well as its customers (Bmwgroup.com, 2018). Some of the
current developments that the company has initiated are: using technological advances such as
robotics in the supply logistics, proving the customers with real-time maps BMW Group if the
HERE maps and navigation company and therefore has developed features for the customers to
provide real-time data, incorporating 3D printing in the production process, development of
virtual reality and lastly BMW has combined the mobility services with payment technologies
(Bmwgroup.com, 2018).
BMW’s attitude to innovativeness
The legacy of innovation
The company has been investing upon innovation and finding solutions to the problems
faced in the industry from the time of establishment, there are some of path breaking innovations
initiated by the company. The company had developed the idea of using Aluminium pistons in
aircraft engines in 1917, and ever since the strategy that the company has taken to maintain
competitive edge over the other players is with the help of innovation (Bmwgroup.com, 2018).
In order to bring about innovative ideas to the test the company uses three supporting elements:
the use of virtual and mixed reality, BMW Group is the first organisation in the automobile
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industry to use this kind of technology in developing the products. The company believes that
this is going to be the future of the industry as the process is going to provide new scope for the
developers; this includes simulated drive tests and augmented surroundings etc. The next support
is the research and development labs that are owned by BMW Group, these lab portals help the
developers to maintain constant connection with the clients even during the developmental
stages, this gives them insightful ideas regarding the changing requirements of the industry.
BMW has IFTTT services which makes the customer get customized services from the vehicle.
Furthermore, the company has also been incorporating robotics in the process of innovation and
development (Bmwgroup.com, 2018).
Innovation in production process
The decisions that are taken by the entrepreneur of the company are based on maintaining
a sustainable development. This leads in taking decisions which are ensure an efficient use of
resources in the manufacturing process. The company has observed digitalisation as a part of
technological shift towards optimising the production. The company is committed towards
providing the customers with their changing needs and requirements and in order fulfil the
requirements (Bmwgroup.com, 2018).
Risk-Taking and Proactiveness
The company does not only take pro-active steps in keeping up with the dynamics of the
industry but also invests in societal and environmental reforms. The risks that are associated with
the business decisions are relevant to the popularity and goodwill of the company
(Bmwgroup.com, 2018). Clients investing on a BMW vehicle are looking for the best possible
mobility options. Refer to appendix 1 for the Entrepreneurial Grid showcasing a comparative
view of the competitors in the market.
Part B: The Corporate Entrepreneurship Climate (CEC) of BMW.
BMW Group is an organisation that encourages innovation and ensures it as an important
part of the business model. The company focuses on the employees and their development as
they believe that the performance of the organisation is based on the performance of the
employees (Wei & Ling, 2015). The culture of the company is to promote and support
development, the leadership that is observed in the organisation also supports change not only in
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the products and services but also in the process of business (Bmwgroup.com, 2018). The
company encourages an inclusive and diversified employee base in order to deal with the
diversified customers that they serve. The structure of the organisation can be said to follow a
strict and complex hierarchal form, as the company is a large scale organisation it forms a
pyramid of hierarchy in the business model. These are some of the factors that support the
entrepreneurship in the organisation. Kuratko et al. (2014), state the following are five factors
that will help assess the CEC of the company.
Support from the management: The top management of the company supports and promotes
creativity among the people of the organisation. Not only that they encourage development and
risk in order to provide the customers with the best possible solution with the efficient use of the
resources available. It can be said that there is a direct positive relationship with BMW’s
innovative outcomes and the support of the top management. Harald Krüger determines the
demand of the industry to develop innovations in mobility.
Work discretion: There is entrepreneurial opportunity as there is enough desecration over how to
perform the duty (Hornsby et al., 2013). Harald Krüger has been subjected to a number of
criticisms as the company slipped off its leading position, however, the management believes in
the vision of Mr. Krüger and supports in delivering his vision for 2020. He has been recently
awarded with the title of best manager by an employee support platform.
Rewards and reinforcement: BMW recognises exceptional talent and rewards in the form of
professional and career opportunities. This provides the people with motivation and
encouragement to align the personal interest with the objectives of the company.
Time availability: The work load and work time should be balanced in order to ensure there is
opportunity for the people working for the company to exercise their innovation and creativity.
BMW Group has a number of HR policies that provide people with flexibility.
Organizational boundaries: BMW allows flexibility in terms of providing people with an
opportunity to express their version of innovative solution.
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5. Conclusion
It can be concluded that BMW is an organisation that provides high degrees of
entrepreneurial intensity and also supports the people with a supportive Corporate
Entrepreneurship Climate. The company has always been encouraging innovation form the time
of establishment. The entrepreneurship theories focussing on the development of the business
takes into account the modern market and the relative competition. The innovative strategies in
the development of new cars and the innovative technologies like hydrogen fuel cell cars and the
hybrid cars. The innovation and the technological development is one of the important aspects of
development in the BMW entrepreneurship. The innovation strategy focuses on the
understanding the current market, the future trends and develops the products accordingly.
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6. Reference
Bloomberg.com. (2018). Harald Krüger. Retrieved from
https://www.bloomberg.com/research/stocks/people/person.asp?
personId=46580011&ticker=BMW:GR
Bmwgroup.com, (2018). About the company. Retrieved from
https://www.bmwgroup.com/en/company/company-portrait.html
Boeriu, H. (2018). BMW Group CEO Harald Krüger voted most popular manager 2018.
Retrieved from https://www.bmwblog.com/2018/01/21/bmw-boss-harald-kruger-maybe-
underestimated/
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Hornsby, J. S., Kuratko, D. F., Holt, D. T., & Wales, W. J. (2013). Assessing a measurement of
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Nica, G. (2107). BMW Considers Electrification of Cars a Certainty at this Point. Retrieved from
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Press.bmwgroup.com. (2018). BMW Group CEO Harald Krüger voted most popular manager
2018. Retrieved
fromhttps://www.press.bmwgroup.com/global/article/detail/T0282346EN/bmw-group-
ceo-harald-krueger-voted-most-popular-manager-2018?language=en
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Degree of entrepreneurship
Frequency of entrepreneurship
Tesla
Mercedes
Audi
BMW
Schneider, S., & Spieth, P. (2013). Business model innovation: Towards an integrated future
research agenda. International Journal of Innovation Management, 17(01). DOI:
doi/abs/10.1142/S136391961340001X
Wei, L., & Ling, Y. (2015). CEO characteristics and corporate entrepreneurship in transition
economies: Evidence from china. Journal of Business Research, 68(6), 1157. DOI:
7. Appendix
Figure: Entrepreneurial Grid
Source: Author’s Creation
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