Global Strategic Management in the Auto-mobile Industry: A Comparative Study of Audi and BMW

This report analyzes the auto-mobile industry with a comparative study of Audi and BMW. It examines the external business environment, internal analysis, and responses to globalization and technology. It also discusses CSR strategies that enhance organizational success and the role of sustainability offerings.

GLOBAL STRATEGIC

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Auto-mobile industry.................................................................................................................1
External business environment .................................................................................................1
Macro environment ...........................................................................................................1
Micro environment ...........................................................................................................3
Internal analysis ................................................................................................................4
Responses to globalization and technology ......................................................................5
Task 2...............................................................................................................................................5
TASK3.............................................................................................................................................8
CSR strategies that enhances the organizational success............................................................8
Role of sustainability offerings...................................................................................................9
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Global strategic management refers to managing all the plans of actions on the
international level is known as global strategic management. It gives assistance to business in
acquire capitalize and opportunities all over the world. In order to increase the growth rate of
business enterprise the manger of the company allocated the resources with the help of strategic
management.
The present report will examine the auto-mobile industry with the assistance of two largest
auto-mobile companies namely Audi and BMW. Audi is the German company which deliver
luxury vehicles in the marketplace whereas BMW indicate as Bayerische Motoren Werke AG
which is leading the market since many years (Wilberforce, et.al 2017). Both the companies
operate the main function from the headquarters which is in Germany.
Furthermore, the study will analysis the PESTAL and Porters 5 force model , SWOT analysis
along with value chain and VRIO. The report also highlight the CSR comparison as well as
graphics of two auto-mobile company.
MAIN BODY
Auto-mobile industry
Auto-mobile industry refers to the manufacturing industry which manufacture or sales
self-powered vehicle to ample numbers of customer in marketplace. It is the largest leading
sector which contribute in income of nation in adequate manner.
External business environment
Macro environment
PESTAL analysis
The PESTAL analysis of the auto-mobile industry indicate external factors of organizations
which affect business and give assistance in improving usefulness of the organizations(Palinski,
2017). The analysis consist of various factor which are as follows:
1. political factor: the authority of nation form rules and regulation in order to deliver safety
concern to the consumers. The authority demand for production of vehicle which is safe
for the consumer. if the companies are unable to fulfil the requirements, permit of the
company will cancelled by authority leading the country. The organization test
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manufactured product before introducing in the market which is costly and time-
consuming for the companies.
2. Economic factor: it affects the auto-mobile companies of luxury cars because of the
implement of taxes on luxury commoditizes which increase the value of vehicles.
Therefore, income of the people will not allow buying high value cars. Due to increment
in the price of auto-mobile parts, the scale of conveyance price also increased which
result in lowering the demand of product in marketplace.
3. Social factor: what is in social trend affect the production of the product. The taste and
preferences are of consumer is included in social factor (Mao, 2018). People willing to
buy update version or car with advance facilities. If the manufacturing is not gone
according to fashion so sales of the production decreases. The culture and tendency to
devour the commodity affect sector.
4. Technological factor: the people are concerned with safety which require the innovative
technology so companies have opportunity to implement updated technology in cars for
safe experience to the buyers.
5. Environmental factor: in order to decrease pollution in the nation, governing authorities
take major steps which impact the production of industry. The companies started
manufacturing battery or electric driven cars which give assistance in decreasing the
revenue enhancement of emission.
6. Legal factor: it is consists of tax and environmental legal system which is essential to
survive in the international market. The company may get banned in the marketplace if
they do not follow the norms of the nation.
PORTALS 5 force model
It is plans of action which is utilized to analysis the competitiveness and attractiveness of
a industry (Khan, and Ahmed, 2019)]. It gives assistance in raising the potential and surplus of
the companies by various elements such as follows:
1. extent of rivalry between the competitors: it is high for both the reputed and highly
demanded companies due to high market share and growth.
2. threats of entry: it is low for both AUDI and BMW because both companies scale up the
economical values.
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3. threats of substitute will be the moderate with the help of updated feature of vehicles.
4. power of buyer: luxury cars are quite expensive and the demand is high so the power of
buyer is high.
5. power of supplier: the bargaining quality of the supplier is average- moderate as it grasps
respectable sum of power.
Micro environment
SWOT ANALYSIS
FACTORS BMW AUDI
STRENGTHS The brand value of the company
is high in marketplace.
The manufacturing and driving
experience is perfect as per the
consumers.
The company deliver innovative
and sustainable product.
The Audi has ha premium class
designs for the customers along
with brand value.
WEAKNESSES The organization is having high
debt level in the marketplace.
Manufacturing of petrols cars
whereas the people prefer
electric cars in forthcoming
(Khaligh, and D'Antonio, 2019).
The promotion quality and
activeness of the product is not
high compared to BMW.
The company is having low
frequency of promotion.
OPPORTUNITIES The organization can modify
technology with relevant skills
and accelerate the evolution of
autonomous vehicle.
For affordability of medium
class people the BMW decrease
the price of vehicles.
The organization can target the
customers from the emerging
market.
Audi can launch driverless
vehicles for the comfort of
customers.
THREATS Due to other premium brands
like Audi, Mercedes-Benz etc.
BMW facing tough competition
The reliability is low as per the
price of the AUDI product.
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in the market. The organization is facing tough
competition in global market.
Internal analysis
VRIO Analysis
It is the tool which is utilized for the investigation as well as assessment of interior organization
resources and capabilities (Das, et.al 2018.). It gives assistance in comparison of two
organization simultaneously.
Value Rarity (in)imitabililty organization
Brand name BMW ✓ ✓ ✓ ✓ Competitive
parityAUDI ✓ ✓ ✓ ✓
Capital
resources
BMW * * * ✓ Sustainable
competitive
advantage Audi
AUDI ✓ ✓ ✓ ✓
Technology BMW ✓ ✓ * ✓ Temporary
competitive
advantage BMW
AUDI ✓ * * ✓
Product range BMW * * * ✓ Temporary
competitive
advantage AUDI
AUDI ✓ ✓ * ✓
Product
quality
BMW ✓ ✓ * ✓ Sustainable
competitive
advantage BMW
AUDI * * ✓ ✓
Innovative
capability
BMW ✓ ✓ ✓ ✓ Sustainable
competitive
advantage BMW
AUDI ✓ * ✓
Distributional BMW ✓ ✓ * ✓ Competitive
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system parityAUDI ✓ ✓ * ✓
Global supply
chain
BMW ✓ * * * Temporary
competitive
advantage AUDI
AUDI ✓ ✓ * ✓
Marketing
chain
BMW ✓ ✓ ✓ ✓ Competitive
parityAUDI ✓ ✓ ✓ ✓
Responses to globalization and technology
both the organizations have powerful brand values in the marketplace in which customers
willing to buy high class or luxury medium for the transportation. The Audi is having the
advantage of having innovative technology because the customers in modern era prefer to buy
higher technological products (Bloomfield, 2017). The organization is able to manage the brand
values in international marketplace. The BMW will face the challenges in the forthcoming to get
succeed in the marketplace due to lack of technology innovation in the products.
Task 2
Corporate Social Responsibility is a self-regulating business framework whereby the companies
combine the environmental and social concerns in their business functions. Corporate Social
Responsibility focuses on the development of society and also to improve the brand image of the
company. It is a wider concept in multiple forms and by adopting it business can benefit the
society as well as their brand image(Wolff, et.al,2020). The companies conducting CSR
activities helps in better communication with the employees and the company and through this
the employer and employees feel connected with the surroundings. If the concept of the CSR is
implemented in right direction it can bring multiple benefits such as competitive advantages,
access to capital markets, decrease in operational cost, increase in profits and sales etc.
CSR activities can have positive impact on the companies and many organizations adopt the
concept of CSR and have taken measures to improve the environmental sustainability of the
companies operations such as taken steps to install the renewable source of energy etc. Mainly
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large scale companies participate in the CSR programs but small scale business also participate
by conducting the CSR programs on small level.
Audi has a clear vision for the sustainable quality that everyone can use with a clear moral sense.
Audi also takes the duty for the future to save the environment and the society(Jaderná, and
Přikrylová, 2018). Being a successful company, Audi wants help the society and to increases
the quality at all sites. For this, the company has taken various initiatives and the employees,
management and labour has taken numerous donation campaigns. Many employees are involved
in the social projects and has supported various educational institutions and conducted various
student programs. Its main aim is that the programs and activities are experienced by all the
people. Audi has also critically analyse the environmental aspects globally. The company has
the clear vision of manufacturing its cars in carbon neutral plants. The Company has also
introduced energy management systems in order to protect and top make pollution free
environment(Chamsuk, et.al, 2017.). The Audi Environmental foundation is a supporter for the
research of new and advanced technology for the protection of the environment. This foundation
is mainly concerned with the promotion and development of eco friendly and compatible
technologies and provide education for the protection of nature, animals and plants. Audi also
has long termed goal is of manufacturing the product which reduces the CO2 emissions. The
company also took initiatives by encouraging and supporting the charitable institutions where
the employees were encouraged by the company and the purpose is for the welfare of children,
senior person and disabled person that need support in many ways. In1995, the company has
received the EMAS certificate taking preventive steps for the environmental protection.
BMW has always been committed on achieving its goals that is to increase the profitability of
the company. It main purpose is to develop the position in the local and international market
and meet the expectations of the company(Hąbek, and Villahoz, 2020). The company also
promotes the protection of environment and for the welfare of the society. The company has
manufactured the products keeping in mind the preference and changing demands of the people
and the main purpose behind this to understand the needs of the society and also manufacture the
products which is environmental friendly. By adopting these measures, the company can connect
to the society and nature and also improve the brand image of the company. The company is
involved in various social programs and promoting the understanding among the different
people having different cultures. The company is also involved in various programmes related
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to the safety rules related to the children and young driver. The company has taken various
measures to protect the environment and welfare of the society. In order to protect the natural
resources, the company is focused on reducing the use of raw materials and shifting to the
recyclable materials. In order to protect the environment, the company has planned to reduce the
CO2 emissions on per vehicle by 40%. The company has also taken measures to comply with
the environmental and social standards.
BY engaging in the CSR activities and involving itself for the welfare of the society through
donating and volunteering, the company will gain trust of the consumers. As a result the brand
image of the company will become popular as Corporate Social Responsibility benefits the
company and builds a good reputation in the eyes of its customers and in the market. As the
customers have faith in the company and helps to build the company and customer relationship.
The overall management of the company is also affected and helps to retain the employees of the
company(Tourky, et.al, 2020). If the company is highly engaged in the CSR activities, it will
result in the welfare of society, good brand image of the company and also satisfied employees
in the organization. The company focuses on the long term sustainability in the market and for
achieving this the company focuses on delivering the products in the market which is eco
friendly and according to the current demand of the consumers. The company is focusing on
long term sustainability by reducing the carbon emissions and start using the renewable source
of energy. But on the other hand various risk are involved such as laws, rules and regulation of
the international market which can be barrier for the auto mobile company to operate and
function in the competitive market(Doheny, and Griffith, 2017). CSR activities help the
companies to operate socially in the market but it is important for the company to know the
present demands and preferences of the consumers in the overseas market. Various government
regulations and policies also creates problem in the development of the company.
It is said that whenever the CSR initiatives are examined, it is very important to identify the
stakeholders of the company. Stakeholders is a party that have interest in the company. They can
be investors, employee and suppliers. Stakeholders are important for the company as they can
affect the functioning of the company internally and externally. These can affect the company's
business directly and indirectly. The employees are also considered as the important
stakeholders in a company as various CSR activities are implemented through the efforts of the
employees
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Triple Bottom Line is a concept which states that the company should remain focus and
dedicated towards improving and fulfilling the needs of the society and also focus on protecting
the environment by taking various steps to improve it. This theory states that the company
should not remain focus on achieving the profits of the company but also dedicate towards the
betterment of the society and protection of the environment. This theory is helpful for the
success of the business. It is structure in order to measure the performance of the company in
terms planet, profit and people. BMW is one of the best luxurious car manufacturer and its
headquarters is located in Germany. The company is focused to provide the society
apprenticeship schemes for the young people who want to gain working experience. Each
program provides essential training skills in order to provide training to the people and also
provide job opportunities to the trainees as a result the company creates job opportunities for the
young people and contributes in reducing the employment rate in the country.
The company is trying to reduce the overutilization of the resources and create the electric
vehicle as they are pollution free vehicle and reduce the pollution in the country. The company
is trying to conserve and protect the natural resources and environment(Vieira, and Radonjič,
2020). On the hand, Audi is also focused on making the contribution to society by following the
principles of engage, educate and empower. The company in involved in the donations and
social events with the non-profit organizations The company also contributed in the emergency
coronavirus aid. The goal of the company is to manufacture the pollution free vehicle in order to
protect the environment.
TASK3
CSR strategies that enhances the organizational success
CSR strategy is a broader plans which is used by the various companies in order to examine and
analyse the corporate social responsibility initiatives of the company. The plan includes the
various core areas, promotion, concept of communication and procedure(Danisch, 2021).
Various companies use this strategy to build their programs.
In order to achieve the organizational success, Audi is focusing on the reducing the pollution
and reduction in the CO2 emissions and trying to manufacture the vehicles which reduce the
pollution. The company is also focused on preserving the resources by not overutilization the
resources. The company is focused on contributing specifically to the society by following the
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principles of educate, empower and engage. The company has involved itself in various social
events and sponsorships and contributed in emergency aid during the pandemic. The company
not only concentrates on the employees but also on the customer as the demand and preferences
of the customers changes and according to the trends and lifestyle of the people the company has
to make modifications in its products(Rebs, et.al, 2018). The company also encourages the
various practises related to the sustainable environment. The company has also taken steps to
promote healthy workplace culture as its creates the positive feedback as it helps to enhance the
company's mission for the CSR initiatives. The employees of the organization will feel
motivated to work in the organization who has good brand image in the market. The leader
involved in designing the strategies focuses on the welfare as well as the protection of the
environment by creating pollution free environment.
BMW Corporate Social Responsibility strategy's main purpose is to accomplish the highest level
of sustainability at each level of its vehicle life cycle by executing various measures and
strategies. The company has taken various strategies for reducing the pollution and CO2
emissions form the vehicles. The company has also focused on fulfilling the legal requirements
in its changing environment(Rius-Sorolla, et.al, 2020). The company is highly investing in
manufacturing the electric cars according to the demands of the customers as a result it is
observed that it focuses on the customers preferences. The company has also extended services
for the convenience related to the transportation. BMW is also involved in various water related
awareness campaigns and the company has also been appreciated for the efficient use if the
resources by reducing the wastage of water and other resources.
Role of sustainability offerings
The companies which are adopting various CSR activities helps in better communication with
the employees and the company. It also helps to build the relation between employer and
employees, and they feel connected with the surroundings(García-Madariaga, et.al, 2017). If the
company executes the concept of the CSR in right direction it can bring various benefits such as
competitive advantages, access to capital markets, decrease in operational cost, increase in
profits and sales etc.
CSR activities can also positively impact on the companies and many organizations adopted
the concept of CSR and have taken measures to improve the environmental sustainability of the
companies operations such as taken steps to install the renewable source of energy etc. Mainly
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the companies operating at large scale participate in the CSR programs but small scale business
also participate by conducting the CSR programs on small level.
Collaborating with society and government will help the company sustain in the market and
contributions with the non-profit organization will help the company to maintain long term
sustainability in the market and build the brand image in the market.
 Long term profitability-Every company wants to enjoy long term profitability of its
business but in order to retain its position and in order to take competitive advantage
over other competitors in the market the company has to examine various elements
which affects the production and profitability of the company(Yu, et.al,, 2020). The
companies involved in the CSR activities helps to build the communication between the
employer and employees. If the company is focused on manufacturing those products
which are environmental friendly and conducting various socially related events then the
trust of the customer will increase for the company and then the customers will purchase
the products of that company which will result in increase in the sales of the product of
the company will result in the profits if the company. The company has to gain trust of
the consumers which will affect its long term profitability. The company's main purpose
is not only to increase its profits for long term but it should also focus on the welfare of
the society and environment as these will help the company to generate the profits of the
company and will result in long term survival in the market(Martín-de Castro, 2021).
Both the companies being the popular and best manufactures of car have taken various
steps in order to reduce the environmental impacts by making efforts in reducing the
CO2 emissions and also focusing on the welfare of the people by understanding and
contributing in various events related to the society.
 Strategic partnering with society and government in growth markets:Today many
companies recognize Corporate Social Responsibility as an opportunity to strengthen
their business including the overall aspects of the company. The company can improve
its business and also same time can contribute towards the welfare of the society. After
analysing the benefits of the CSR, collaborating with the society and non-profit
organization will help the company to manage the various resources which is required
for the manufacturing of the products. Many companies such as BMW have partnered
with the non-profit organizations to meet out the objectives related to the CSR activities.
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These organizations possess various knowledge and experience how to fund and sponsor
the company brand name. These organizations will have the decision-making power and
contribute in volunteering the campaigns(Lee, and Lee, 2019). The government helps to
raise the awareness and create capacity for the Corporate Social responsibility for the
companies as well as for the stakeholders. Government helps to spread the information
to the various sectors of business to inform the companies about the CSR and its function
in business. The government is also involved in setting the standard through various
policy provisions in order to improve the performance of the company. The role of
government in framing the policy plays an important role in modification of the
standards worldwide.
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CONCLUSION
From the above report, it can be concluded that Corporate Social responsibility is
important for any business and the companies who are involved in the CSR activities will help
to improve the brand image of the company and the company will be dedicated towards the
welfare of the society. It is also helpful in raising the morale of the employees as will feel
motivated at the workplace. While analysing the external environment, Pestle analysis is done of
the auto mobile industry that defines the political, economical, social, technological and legal
factors that affect the operations of the company. Porter's five forces model is applied in order to
analyse the market competition of both companies. Current initiatives taken by the companies is
also taken and the importance of Corporate Social Responsibility is done in order to examine the
benefits of conducting CSR activities on the companies.
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