BMW: Global Business Environment, Challenges and Internationalization

This report provides a comprehensive analysis of the global business environment, focusing on BMW, a leading German multinational automotive company. It examines key factors influencing global commerce and trade, including costs, markets, environment, and competition. The report delves into the strategic challenges BMW faces, such as differentiation, innovation, and competition, within the global market. It also explores the influences of globalization on BMW's governance, leadership, structure, culture, and functions. Furthermore, it evaluates different decision-making approaches in a global context and articulates various internationalization routes BMW might adopt, considering potential barriers. The analysis offers valuable insights into the complexities of operating in the international automotive industry and the strategies required for success.

Global Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Key factors of cost, market, environment and competitions which drive global commerce
and trade......................................................................................................................................1
P2 Complexities of strategic challenges that faced by BMW in global environment.................3
TASK 2............................................................................................................................................4
P3 Influences of globalisation on governance, leadership, structure, culture and functions of
BMW...........................................................................................................................................4
P4 Influences of ethical and sustainable globalisation on organisational functions at BMW....5
P5 Different ways decision making that can work effectively in a global context.....................6
P6 Determine and articulate the various routes to internationalisation which MBW may adopt
.....................................................................................................................................................7
CONCLUSION................................................................................................................................8
REFRENCES...................................................................................................................................9

INTRODUCTION
The global business environment is concerned with several forces that effects to the home
atmosphere of organisation. Environment generally refers to various factors such as internal and
external which have direct impact on the organisation. These kinds of forces are available within
an organisation and influence on decisions making process, utilisation of resources and
capabilities in several ways (Cantwell, 2010). In the present scenario, Automobile industry is
growing fast in the World Wide because human cannot live without cars. This industry is also
leading global economy. This report is based on the Bayerische Motoren Werke (BMW) which
is German multinational company that produce motorcycles and auto-mobiles. In this
assignment, analysis of factor of cost, market, environment and competition in global trade. It
explains complexities of strategic challenges which is faced by BMW and define influences of
globalisation on organisation governance, leadership, structure and culture. Different ways of
decision-making also evaluated in this. This will articulate several routes for internationalisation
which BMW that may adopt by them with key barriers.
TASK 1
P1 Key factors of cost, market, environment and competitions which drive global commerce and
trade
International trade is generally defined as the exchange of commodities, capital, products
or services between people as well as companies at global level or in different countries. It is a
crucial part of Gross Domestic Product (GDP). Global trade has exist for a long time and
increased more in the past few hundred years. They have major impact on increasing revenues or
contributing to the country's economies. This includes several aspects such as exchange of
economic, communication, finance and transaction across the countries. Therefore, Global
business environment consider effective strategies and decisions while running an organisation.
These will support in achieving competitive advantages in an suitable manner (Dunning, 2010).
There are several key factors that can affects to the BMW because this auto-mobile firm deals in
international level so it must be necessary to consider these forces while making decisions
regarding business. They have major impact on the business and drive global commerce or trade
in effectively and efficiently. Here are the factors such as;
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Cost: It is generally related with financial term and several issues that can occur during
productions, research and marketing etc. Therefore, itcan be defined as the value of money that
helps in producing goods or services to satisfy customers needs or wants in different countries. If
any business enter into new market then it affects various activities such as promotions,
advertisements and trade shows for the purpose of creating awareness so it reflects on cost
factors. BMW always focus on promoting its new car models or featured car with help of using
media channels such as commercial ads, Televisions, other advertisements modes to reach at
target audiences (Lundan, 2010). So it will support in driving global commerce and trades and
increase economies and GDP of the country. Key factors of costs are as following;
Direct cost: These cost generally are those that consider while running business which
puts some little efforts in the products as well as project in an effective manner. In this included
various direct costs such as labour, material and manpower that must be required for producing
appropriate goods or services to satisfy customers needs or wants. BMW have to need to
consider Fixed and Variable costs in manufacturing process for running business operations.
Indirect costs: It is defined as the expenditures which also occur during productions
processes and business activities. It includes as advertising, maintenance and office expenses and
administrations. These costs usually arise while selling and purchasing of goods or services. it
also related with compasses of price policies for maintaining entire business and its functions in
an appropriate manner.
Market: It describe as the place where goods or services are being offered and sales. In
this, various individuals comes for different purpose like buy products with exchange of some
money value in the market. BMW is leading an international market and selling its motor
products such as cars and motorcycles at several countries as well as different market (Cavusgil,
2014). It is not stable as market change according to environment and time so it can affects on
the organisation. There are some key factors of market such as;
Labour market: It generally concern with people who works for organisation and find the
employment at several countries. Labour market is related with job opportunities within the firm
that increase due to international trade and globalisation. It is driving the commerce as well as
trade which is key factor of market.
Market for raw material: This is another key factor that is beneficial for every
organisation as raw materials are must be required for producing effective goods or services.
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these are related with commodities and materials which import and export across the country, so
now it is easy for BMW to import or export some necessary parts for producing better motors.
Environment: it is one the major factor which consists several components and every
businesses are surrounded from those elements. It is flexible in its nature that can be change as
per the situations (Colfax and Rivera, 2010). Therefore, every firm has to consider environmental
factors that can affects on the business. BMW undertakes internal and external environment
forces while formulating strategies and plans. These are as follows;
Internal environment: In this describe those elements that comes and influence inside of
company. It included several aspects such as customers, suppliers, employees and shareholders
etc. they also affects on the business as BMW focus on internal factors when enters into new
market therefore, they make effective strategies to maintain and manage the business.
External environment: in this defined those elements or factors that directly affects on the
organisation and its activities. They cannot be controlled by organisation so they influence the
business from outside (Tarique and Schuler, 2010). In this included several elements such as
political, technological, legal social and economical etc. BMW is dealing with different markets
so there can be chances of effecting business due to different environment. Company make
strategies for surviving from these aspects.
P2 Complexities of strategic challenges that faced by BMW in global environment
BMW company has already exist in different countries so they considered number of
strategies while expanding business. It is leading global market and have good brand image due
to maintaining it with effective and appropriate strategies. It is not easy to run business in global
market as there are several competitors available and also many complexities can be created.
Investors of BMW are thinking to increase the capacities of manufacturing at more countries for
the purpose of intending the market bid and get higher returns (De and Jonge, 2011). There may
be various risks available such as problems regarding entering into new market such as;
Differentiations: It is concern with marketing mix that distinct from those which are
available from competitors. Product differentiation is an essential for achieving competitive
advantages and increase market share. BMW is facing problems regarding this as they are
forcing to engineers for manufacture new or unique product within limited times period and it is
based on tastes or fickle demands of customers. BMW has faced financial issues regarding new
products and differentiation which required huge investments in an appropriate manner.
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Innovation: In the present era, every firm is trying to adopt new innovative ideas or
products innovations. This is not an easy tasks as BMW has faced several challenges regarding
innovation in car or its additional features. The main challenge of BMW regrading innovation is
to increase its costs factors and also unnecessary expenses while manufacturing luxury car. There
are major risks also involved in this regarding time consuming and cost of deveklo
new model parts etc.
Competitions: In the global market, there are number of competitors exists who can
affects on the business and its sales due to launching new products or featured cars. In the current
market situation, approx 69% of market controlled by six famous companies therefore, it is
difficult for manufacture to maintain as well as manage its buyers in an effective manner
(Ferraro and Briody, 2017). It directly affects on the prices. It is a biggest challenge for the
BMW so they focused on effective strategies which lead to its brand and acquisition, mergers
partners also considered by them.
Substitute products: It is generally related with products that is big threat on the auto
market. It also consider materials as well as resources which cause to demand for products shift.
BMW focus on high quality rather than prices so it affects on the target markets and some close
substitute are Mercedes, Audi and Porsche etc.
TASK 2
P3 Influences of globalisation on governance, leadership, structure, culture and functions of
BMW
There are various factors that influence on the business if they move towards further
expansions as most of companies are trading in international market, so that it is genuine to
occur number of problems in globalisation. These forces can impact on both ways as negative
and positive depends on the situations so it is necessary to consider all those factors in an
effective manner (Gecevska, 2010). BMW focus on different favourable strategies and decisions
which support in managing entire business in critical situations. These are followings;
Governance: In this considered that every firms is governing their business in more
appropriate ways so that they will be able to face several challenges and changes while running
an organisation in an effective manner. Globalisation has major impacts on the business so it is
necessary to make appropriate strategies for BMW and manage its functions by effective
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governing. These are essentials for increasing productivity and profitability in an impressive
manner.
Leadership: In this modern era, every organisation try to expand their business at
different countries. It is major purpose of entire firm to become global leader and leading whole
market in better manner. BMW is already covered wide areas and captured market through
formulating strategies and producing better quality of products or services in an appropriate
manner (Hamilton and Webster, 2015). Leadership is best way to lead company in the
competitive advantages as in this, BMW manager can adopt several styles to provide directions
and influence employees behaviour towards organisational goals or objectives.
Structure: There are various countries which has different structure so it can affects on
the organisation therefore, it is necessary to form their own structure as per their nature of
business. BMW has its structure for producing goods and services, providing information by
effective tool of communication to the target audiences. They follow structure within firm which
is hierarchy for managing and maintaining working environment in an appropriate manner. It is
an essential that support in work with systematic way and ethical manner to achieve
predetermine goals or objectives.
Culture and functions: BMW is multinational automobile industry which exists in
different countries. They focus on expanding business to reach at potential customers as well as
targeted audiences. This firm produce best model of cars and motorcycles with adding unique
features and high quality to make feel comfortable to the customers and satisfy their needs or
wants in an appropriate manner. It has own culture including logo, symbol, values and ethics that
are followed by firm (Kasemsap, 2014). It is necessary to organisational culture when expanding
business at another country. Their culture is more efficient as every employees feel motivated
and work hard by getting motivations or rewards form top management.
P4 Influences of ethical and sustainable globalisation on organisational functions at BMW
This is not an easy task to lead the global market as in this requires integration of regional
societies, economies through adoption of communication process, effective trade and
transportation. Globalisation is one the best way to grab opportunity and increase financial
strengths, productivity as well as create value or brand image in the market in an effective
manner. Now it becomes easy to achieve sustainable growth in the competitive environment. The
main purpose of BMW is to develop sustainability and increase more engagements with foreign
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direct investments through globalisation. There are various areas which affected by ethics as well
as sustainability in several ways such as;
Reduce the liabilities of finance: This is a major influence which affects on the business
while running in international market (Laudon, 2015). BMW is manufacturing varieties of car
and selling in the market by considering strategy such as Just In Time (JIT). So it is easy to
reduce the financial liabilities by controlling costs with ethical practices.
Health and care facilitates: This is necessary for every business firm to maintain the
health and safety factor during manufacturing process as BMW is producing effective luxury car
and model in the firm. In this use several tools and parts for manufacturing car so it can harm any
employees during this process. It is the duty of manager to ensure about these issues and
maintain working environment.
Recruitment and selections process: Business can be run by effective and appropriate
work force through skilled or qualified manpower, therefore BMW focus on recruiting talented
and best engineers who are able to bring new innovative ideas and creativity while producing car
or motorcycle. BMW also undertake training and development programmes to enhance
employees skills or abilities in an effective manner.
Customers confidence: customers are key people of the organisation as they are king
who purchase particular goods or services and spend money. Therefore, it is the duty of company
to provide effective products or items to them for satisfy their needs or wants. BMW consider
customers needs or demand and produce unique quality or featured car that give good mileage
and feel comfortable to customers in better manner (Louhiala and Salminen, 2011). It is
necessary to keep satisfy customers for increasing long term relationship in the international
market.
P5 Different ways decision making that can work effectively in a global context
For every successful business, it must be required to make appropriate decisions and
corrective actions while running business at global market because some several factors can
affects on the business so result will be loss or decreasing sales in the market of company's
products or services. BMW which is multinational auto-mobiles company and leading global
market needed to consider better decisions regarding business success and capture market
through appropriate strategies and plans. Here are some effective ways that will support in
making efficient decisions such as:
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Pinpoint various issues: For taking best actions or make favourable decisions in BMW
firm, manager requires to identify and highlights entire issues that can occur while making
decisions regarding adoption of new technologies and expanding business at other country
(Kankaanranta, 2011). It will support to get better ideas and also provide effective directions or
instructions to manage or maintain the problems or risks factors in an effective manner.
Determine solutions: In this defined that company will find appropriate solutions after
defining particular problems. This will support in making better decisions for BMW in producing
car or generating ideas regarding new bikes or models. Problems must be recognized for making
appropriate decisions which is very necessary to operate business in effective manner.
Implement solutions: after analyse problems and define solutions, it is major task that
must be performed in an effective manner. BMW firm can open manufacture plants at different
countries with implementation of solutions. It is necessary to execute the plans and find better
answers so that they will be able to face several challenges and reduce obstacles in systematic
ways.
Evaluation with effective manner: This is last phase where decisions will be evaluated
as BMW look ahead and check the efficiency of process. Manager ensure about decisions and
measure the effectiveness of the decisions as well as actions that are taken by the BMW.
P6 Determine and articulate the various routes to internationalisation which MBW may adopt
Globalisation has given many advantages to firm to expand their business word wide
through easy process. This process help organisations to carry out their business operations at
international level. It leads them to become more powerful and gain strong positions in
competitive marketplace (Peng, 2016). Apart from many benefits, globalising a business leads
many problems as well. It demands a firm to implement many necessary modification like
change management, alterations in organisational culture etc. In context with BMW, this
company has faced many economical crises in its business. Therefore, in order to overcome from
this situation, its management has launched business in many countries across UK. But before
carrying this operation, they need to evaluate all actions and steps used in improvising the same.
Examining needs and demands for such process helps in achievement of set goals and objectives
on time as well as in effective and efficient manner. Some major issues occur in globalisation are
as follows:
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Legal protection: It demands a firm to follow rules and regulations of countries where
they want to launch their business operations. Therefore, this process demands managers to
formulate strategies, terms and conditions of business accordingly.
Monopoly: This process states that in competitive world, a firm cannot survives
individually. It possess the biggest problem to compete with international market. But doing
business without mergers helps in enjoying the right of operations and transactions (Simic and
Dimitrijevic, 2012). Along with this, owners are required to have patents and licenses which
prevents them for production or reformation of similar products.
Therefore, managers of a firm like BMW are required to examine all issues which may
occur during operating business at international market. Identifying such problems assist them in
formulating strategies as well as implementation the same into work-procedure.
CONCLUSION
Form the above report, it has been concluded that globalisation has huge impacts on the
business operations as several factors are available in the environment including internal and
external. These are related with political, legal, economical, social and technological that effects
to the company's productivity and profitability in various ways. This report is based on BMW
which is multinational automobile company and deals in car and motorcycle in the market. They
focused on formulating strategies for achieving competitive advantages in the global
environment.
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REFRENCES
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