Global Business Environment of BMW: Challenges and Strategies

This report provides a comprehensive analysis of BMW's global business environment. It begins by examining the key factors of cost, market, environment, and competitors that drive global trade and commerce, specifically within the context of the automotive industry. The report then delves into the strategic challenges BMW faces in the international arena, including innovation, differentiation, competition, and substitute products. Furthermore, it explores the impact of globalization on BMW's governance, structure, leadership, culture, and functions. The report also discusses the impact of ethical and sustainable globalization on organizational functions. It evaluates various decision-making approaches in an international context and articulates different routes BMW might adopt for internationalization. The report concludes by summarizing the key findings and providing recommendations for BMW's continued success in the global market.

Global Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Key factors of cost, market, environment and competitors which drive global trade and
commerce....................................................................................................................................1
P2 Complexities of strategic challenges which face by BMW in international environment.....3
P3 Impact of globalisation on governance, structure, leadership, culture and functions of
BMW...........................................................................................................................................5
P4 Impact of ethical and sustainable globalisation on organisation functions at BMW.............6
P5 Various ways decision making which can work effectively in international context............7
P6 Determine and articulate the different routes to internationalisation which BMW may
adopt............................................................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES .............................................................................................................................10

INTRODUCTION
Global environment is concerned with different factors which directly affect to the home
atmosphere of an organisation. Environment is mainly define as various aspects such as internal
and external which directly affect on business operations and its functions. Such kind of factors
are accessible within an enterprise and it influence on decision making procedures, usage of
resources and abilities in different manner. In current era, Automobile industry is fast growing
sector in all over the world because human can not live without cars. This industry is one of the
leading worldwide economy. This report is based on Bayerische Motoren Werke (BMW) which
is German multinational organisation that develop motorcycle and auto-mobiles. In this project,
analyse the cost factors, market, environment and competition in international commerce and
trade. It will describe the difficulties of strategic challenges that are facing by BMW and define
impact of globalisation on individual governance, structure, leadership and culture (Cantwell,
Dunning and Lundan, 2010). There are various ways of decision making which has been
evaluated in this. It will articulated with different routes for internationalisation which BMW has
been adopted by them with major key barriers.
TASK 1
P1 Key factors of cost, market, environment and competitors which drive global trade and
commerce
International trade is mainly define as the exchange of capital, commodities, products or
services among people and organisation at global level and different nations. It is play important
part of Gross Domestic Products (GDP). Global trade has exist for long time period and enhance
more in some previous years. Also they have face major impact on enhancing income and this
will contributing to the country's economies. It includes various factors such as exchange of
communication, finance, economic and transaction in all over the world. Thus, global business
environment determine effective strategies and decision while smoothly running of business
operations and its functions (Cavusgil and et. al., 2014). It will help in achieving competitive
advantages in better manner. There are different factors which can directly affect to the BMW
due to this auto-mobile company deals within global place so it will assist them in making
effective decisions regarding effective business operations. It can mainly effect on business and
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drive international trade or commerce in effectively and efficiently manner. These factors are as
follows:
Cost – This is mainly related with business term and there are different issues which can
occurs during production, merchandising, investigation, etc. Therefore, it can refers as that value
of cost which assist in manufacturing products and services for satisfying their customers in
different nations. If any business enter in new market so this will directly affect on various
activities such as advertisement, promotions and trade shows which main purpose is to spreading
awareness so it will reflect on cost factors (Colfax, Rivera and Perez, 2010). BMW generally
focus on promoting their new car model or featured car with the assistance of media channels
such as Televisions, commercial aids, other advertisement modes for achieving with target
customers. It will assist in driving international trade and commerce and increasing economies
for knowing the GDP of the country. There are major key factors of costs are as follows:
Direct cost – Such type of cost are mainly help in smoothly running of business
operations and functions which put some efforts in the goods and services in better manner. It
involves different direct cost like material, workforce and labour which required for
manufacturing correct products and services for satisfying their customers needs and demand.
BMW required for determining Fixed and Variable costs in producing procedure for smoothly
running of business operations and its functions.
Indirect cost – It is define as income and expenditures which can occurs during
manufacturing process and their business activities. There are various indirect cost such as
advertising, maintenance and administration expenses and management. Such cost are occurs
while merchandising and purchasing their commodity and services in better manner. It will also
related with compasses of pricing scheme and policies for maintaining their whole business
operations and its functions in effective manner (De Jonge, 2011).
Market – This can describe as that place where all the innovative products and services
are being sale and offered. In this, there are different person who are coming for main purpose
such as purchasing goods with exchanging money value in the entire market place. BMW is one
of the leading global market and they are selling their motor products such as motorcycle and
cars at different countries as well as in market. It is not stable for market change as per their
environment and time so it will directly affect on the company success and growth. Here are
some key factors of market are as under:
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Labour market – It is mainly concern with people who are working for an organisation
and identifying the employment at various nations. Labour market is totally related with effective
job opportunities in the company that enhancing along with global trade and globalisation. It is
driving the trade as well as commerce which are seen as key factor of market.
Market for raw material – It is another factor which is beneficial for each company so
raw material are required for producing proper type of goods and services (Ferraro and Briody,
2011). Such are mainly related with materials and commodities which export and import in all
over the country. Now days, it is easy for BMW is to import and export certain necessary
sections for manufacturing proper motors.
Environment – This is one of the major factor which involved with different elements
and each business surroundings are related with those components. It is very flexible in nature
which can assist in altering the according to the appropriate situations. Therefore, each company
need to consider some environmental factors which directly affect on business operations and its
functions. BMW analyse both internal and external factors which help in making effective
strategies and policies. Such are describe as under:
Internal environment – It can describe those factors which directly impact on internal
business operations. There are various factors such as employees, customers, suppliers and
shareholders, etc. which also affect on business and BMW is mainly concentrate on internal
forces when entering in the new market, so they can make effective policies and strategies for
maintaining and managing the entire business.
External environment – There are those factors which directly affect on business
operations and its functions. They can not be controlled by an enterprise so they are directly
impact on business from outside. There are various factors such as economical, political,
technological, legal, social, etc. BMW is dealing with various market place so there is certain
opportunities for affecting their business due to different environment (Gecevska and et. al.,
2010). An organisation can develop strategies and policies for surviving in the large market
place.
P2 Complexities of strategic challenges which face by BMW in international environment
BMW organisation has been exist in different nations so by this they can consider
number of strategies while expanding their business operations and its functions. It is one of the
leading international market and they have good brand image due to managing or maintaining
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this in effective and appropriate manner. It is not smoothly running the whole business as there
are various rivals which are exist in the market and many difficulties can be created. Along with
this, investors of BMW are believing to increasing the capacity of production in many nations
which main motive is to specify the market bid and acquiring higher returns in better way. There
are various risk which are available such as issues regarding enter in the new market such as: Innovation – In current time period, each company is trying to adopt new innovative
ideas and thoughts. It is not easy work for BMW which has facing different challenges
regarding addition of extra features (Hamilton and Webster, 2015). The main issue and
problems of BMW help in increasing their cost component and it is unneeded
expenditure while producing luxury cars. Some major risks that involved in this for time
consuming and cost development model parts etc. Differentiation – It is consist with marketing mix concept which distinct from those
factors which are available from rivals. Along with this, product differentiation is
necessary for achieving competitive benefits and also increasing market share. BMW is
facing such as lack of engineers who manufacture new or unique commodities in less
time period and this will based on fickle or taste of demanding customers. BMW is also
faced many some financial issues regarding new merchandise and distinction that require
immense investment in straight way. Competitions – In the international market place, there are large number of competitors
present which directly affect on their business operations and its sales due to introducing
new goods and additional featured cars models. Along with this, in the current market
conditions, there are around 69% of market which are controlled by six popular
organisation, thus it is very complex for production to maintain and manage their
customers in better manner (Kasemsap, 2014). This will directly affect on specific prices.
It is huge challenge for BMW firm where they need to focus on effective strategies and
policies that lead towards their brand and acquisition, mergers partners which also
considered by them.
 Substitute products – It is mainly related with goods which is became major threat on
auto-mobile sector. This will consider as material and resources which create demand for
shifting of particular products in the market area. BMW is focus on developing high
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quality based products and services at reasonable price so this will directly impact on
targetting market and some major substitute such as Audi, Mercedes and Porsche, etc.
P3 Impact of globalisation on governance, structure, leadership, culture and functions of BMW
There are different factors which directly impact on business if they are moving towards
enlargement of company which are trading in the global market area, so it is authentic for occur
in different number of issues related to globalisation (Laudon and Laudon, 2015). Such factors
can impact on both ways as negative and positive manner which depend on some situations so it
is required for determine major forces in better way. BMW mainly focus on various pleasing
policies and strategies which help in managing whole business in difficult state. These are as
under:
Governance – In such determination, each and every company is operate their business in
most correct manner so that they will be able for facing different complex challenges and also
make changes while regulating their business operations and its functions appropriately. Along
with this, globalisation has create major impact on business so it is essential for making correct
strategies and policies of BMW and manage their functions for doing effectual administration.
These things are necessary for enhancing their profitability and productivity in effectively.
Leadership – In current time period, an organisation try to expand their business in
different locations where they easily attracting large number of customers in proper manner. The
main motive of the firm is to become international leader and leading the entire market place.
Along with this, BMW is capturing whole market area with the help of making effective
strategies and making quality based goods and services in better way. Leadership is the best
source which help in leading the firm in competitive advantages so BMW manager can adopt
various styles for providing proper direction and impact on employees behaviour towards
company effective goals and targets in better manner (Louhiala-Salminen and Kankaanranta,
2011).
Structure – There are different nations which have different structure so it can directly
affect on company therefore, it is required for making their own composition according to their
existence of business operations and its functions. BMW has major structure for manufacturing
effective products and services and providing information by proper method of communication
to target large number of customers. They are follow company structure which is hierarchy for
managing and maintaining effective working environment in better manner. It is important for
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handling structure of work in systematic and ethical manner for achieving potential goals and
targets.
Culture and functions – BMW is one of the leading auto-mobile company which present
in different nations. They mainly concentrate on expanding their business operations and its
functions for targetting customers. The firm will produce best suitable model of cars and
motorcycles along with additional features and have high quality based for make feel happy to
their customers and also satisfy their needs and wants in better manner (Peng, 2016). It has their
own personal culture that includes logo, symbol, values and ethics which are followed by
company. This is required for organisational culture while expanding their business in other
countries for making success and growth. The firm culture is more efficient and each or every
employees are feeling motivated and doing work hard for acquiring rewards and encouragement
from higher authorities or management in proper manner.
P4 Impact of ethical and sustainable globalisation on organisation functions at BMW
It is not easy task or work which lead towards international market as it is necessary for
integrating with location societies, economies with the help of adopting effective communication
process, trade and conveyance. Along with this, globalisation is one of the best source to grab
opportunities and enhancing financial capability, productiveness and make value or brand image
in the large market place in proper manner. At the current time period, it is very easy for
accomplishing sustainable success or growth in the competitive surroundings. The main motive
of BMW is to make and create sustainability and enhancing more engagements with foreign
direct investment with the assistance of globalisation in better manner. In addition to this, there
are different areas which directly affect by ethics and sustainability in various ways that are as
follows:
Reducing the liability of finance – It is one of the major factor which directly impact on
business operations and its functions while smoothly running in global market (Simic and
Dimitrijevic, 2012). BMW is production varieties of car and merchandising in the large market
for determining appropriate strategies that includes Just In Time (JIT). It is easy for them is to
reducing the financial liabilities by managing or controlling costs along with ethical activity.
Health and care services – It is essential for every business organisation is to maintain
the health and safety aspects at the time of production procedures so BMW is making innovative
and luxury cars and model in the company. There are various use of different methods or
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techniques and several parts for producing car so it can harm any workers during such
procedures. It is the major duty of company manager is to make sure about these problems and it
will help in maintaining working environment.
Selection and Recruitment process – An organisation can smoothly run the business as
well as workforce with the help of skilled and qualified employees, therefore BMW mainly focus
on recruiting talented and skilled engineers who are capable for bringing new innovative ideas
and thoughts while manufacturing new model cars or motorcycle (Tarique and Schuler, 2010).
Along with this, BMW should interpreted training and development program to increasing
workers capabilities and abilities in proper manner.
Customers confidence – Customers are play an essential role for organisation because
they are purchasing their goods or services and spending money. Therefore, it is the main duty of
firm which provide effective goods and items for satisfying their customers needs and demand.
BMW consider buyers demand and requirements for producing high quality based featured car
which provide good average and mileage that feel comfortable to the customers in proper
manner. It is required for satisfying customers and make strong relationship with them at the
global market place.
P5 Various ways decision making which can work effectively in international context
It is necessary for company is to make appropriate decision and take effective actions
while running the business at international marketplace. There are various factors which directly
affect on business so as per this result it will loss or reduces the sales in the market of
organisation effective goods and services. BMW is one of the leading auto-mobile company and
lead towards international market that required to determine the appropriate decisions regarding
business growth and success or capturing global market along with correct strategies and policies
(Trompenaars and Hampden-Turner, 2011). There are certain effective ways which will help in
developing efficient decisions that are as follows:
Highlighting different issues – It is necessary for firm is to take best actions or make
appropriate decisions regarding BMW business operations and its functions, so company
manager require to identify and addressing whole issues which can occurs while developing or
making effective decisions for adopting new technologies and try to expand their business in
other locations. It will help in acquiring proper thoughts and also give better directions and path
to maintain or manage the issues or effective risk factors in appropriately.
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Identifying resolution – In this process, firm can identify correct solutions after
explaining specific issues or problems. Along with this, it will help in developing and making
better decision for BMW in producing car and generating new ideas and thoughts. The problems
should be identified for formulating better decisions which is very essential for operating
business in better manner (Werther Jr and Chandler, 2010). It is necessary for firm is to identify
and recognise the correct solution which help them in making effective strategies and policies.
Implement solutions – After analysing and describing effective solutions, it is main task
which should be perform in better manner. BMW company can open production plants at various
nations with executing suitable method. It is essential for implementing proper plans and identify
better answer so that they will capable for facing different challenges and also reducing major
barriers in systematic manner.
Evaluation with appropriate manner – It is last stage where effective decision can be
evaluated as BMW can look ahead and investigate the efficiency of such procedures. Company
manager make sure about decisions and measure the effectiveness of accurate decisions and their
action which are taken place by BMW.
P6 Determine and articulate the different routes to internationalisation which BMW may adopt
Globalisation has providing major advantages for the company which expand their
business in other locations with the help of using easy procedure. It is that process which assist
company for carry out their effective business operations at global level. It will help in lead
which seen as it is more powerful and also gain strong position in the large competitive market
place. Along with this, globalisation of business that help for major issues and problems. An
organisation can implement some required execution such as alterations, modifications, change
management, organisation culture, etc. In BMW company, it can facing various economical
crisis in the business concern. Therefore, it will helping overcoming with such situations, the
management has been introduced business in some nations and across the world of united
kingdom (Wild, Wild and Han, 2014). For carrying this operations, they required to evaluate and
formulate all major activities and stages which is used for improving the same. For analysing
basic needs and demand for this procedure, it will assist in reaching with desired goals and
targets in given time frame in better and effective manner. There are certain issues which occurs
in globalisation that are describe as under:
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Legal protection – It is that company which has follow rules and norms of nations which
they nee to launch their business operations and its functions in proper manner. Therefore, it is
that process by which managers can make and develop effective strategies, situations and
conditions of business organisation.
Monopoly – It is that procedure which state in competitive world, company does not
survive as an individuals. This is a process which create big problem to compete with global
market place. But doing effective business without making mergers that assist in enjoying the
accurate operations and transactions. Along with this, company owners need to make patent and
licensing which protect them for manufacturing of same type of products in better manner.
Apart from this, company managers such as BMW are required to analyse all major
issues and problems which can occurs during operating business at international level of market
area (Cavusgil and et. al., 2014). They require to identifying such issues which help them in
developing and making appropriate strategies and also executing the similar work in effective
manner.
CONCLUSION
As per this report it can be analysed that Global environment is concerned with different
factors which directly affect to the home atmosphere of an organisation. Environment is mainly
define as various aspects such as internal and external which directly affect on business
operations and its functions. International trade is mainly define as the exchange of capital,
commodities, products or services among people and organisation at global level and different
nations. BMW organisation has been exist in different nations so by this they can consider
number of strategies while expanding their business operations and its functions. There are
different factors which directly impact on business if they are moving towards enlargement of
company which are trading in the global market area, so it is authentic for occur in different
number of issues related to globalisation. At the current time period, it is very easy for
accomplishing sustainable success or growth in the competitive surroundings.
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REFERENCES
Books and Journals
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international business activity: The co-evolution of MNEs and the institutional
environment. Journal of International Business Studies. 41(4). pp.567-586.
Cavusgil, S.T., and et. al., 2014. International business. Pearson Australia.
Colfax, R.S., Rivera, J.J. and Perez, K.T., 2010. Applying emotional intelligence (EQ-I) in the
workplace: Vital to global business success. Journal of International Business Research.
9. p.89.
De Jonge, A., 2011. Transnational corporations and international law: accountability in the
global business environment. Edward Elgar Publishing.
Ferraro, G.P. and Briody, E.K., 2017. The cultural dimension of global business. Taylor &
Francis.
Gecevska, V., and et. al., 2010. Product lifecycle management through innovative and
competitive business environment. Journal of Industrial Engineering and Management.
3(2). pp.323-336.
Hamilton, L. and Webster, P., 2015. The international business environment. Oxford University
Press, USA.
Kasemsap, K., 2014. The role of social networking in global business environments. Impact of
emerging digital technologies on leadership in global business. pp.183-201.
Laudon, K.C. and Laudon, J.P., 2015. Management Information Systems: Managing the Digital
Firm Plus MyMISLab with Pearson eText--Access Card Package. Prentice Hall Press.
Louhiala-Salminen, L. and Kankaanranta, A., 2011. Professional communication in a global
business context: The notion of global communicative competence. IEEE Transactions
on professional communication. 54(3). pp.244-262.
Peng, M.W., 2016. Global business. Cengage learning.
Simic, V. and Dimitrijevic, B., 2012. Production planning for vehicle recycling factories in the
EU legislative and global business environments. Resources, Conservation and
Recycling. 60. pp.78-88.
Tarique, I. and Schuler, R.S., 2010. Global talent management: Literature review, integrative
framework, and suggestions for further research. Journal of world business. 45(2).
pp.122-133.
Trompenaars, F. and Hampden-Turner, C., 2011. Riding the waves of culture: Understanding
diversity in global business. Nicholas Brealey Publishing.
Werther Jr, W.B. and Chandler, D., 2010. Strategic corporate social responsibility: Stakeholders
in a global environment. Sage publications.
Wild, J.J., Wild, K.L. and Han, J.C., 2014. International business. Pearson Education Limited.
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