Bmw Case: Essay

1806 Words Nov 12th, 2005 8 Pages
BMW CASE:
Globalizing Manufacturing Operations

INTRODUCTION

This case focus on the dilemma that the president of BMW Manufacturing Corp., Al Kinzer, faced in 1995 in relation to BMW's new plant at Spartanburg, South Carolina and a dramatically increased demand in the U.S. market for the Z3 model.

To study the BMW case, the background information and role of new plant at Spartanburg will be described at the beginning. Secondly, the 3 alternatives options will be analyzed and compared accordingly to determine a proper conclusion. Finally, the recommendation will be presented with various considerations.

BMW BACKGROUND

BMW was found in 1913 by Karl Rapp as an aircraft engine design shop. After WWI, it started building
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It would be a better adaptation and alignment to the U.S. market and consumer's requirement. Producing in the U.S. has grated the company a great deal of certainty regarding the price. It will not significantly change price with changes in the DM's exchange rate. Similarly, sourcing supplies and the cost involved will not affect the U.S. price. However, BMW should not consider only exchange rates of the DM to the dollar. Actually, it is affected by the exchange rates of all its competitor's home currencies to the dollar. For instance, if yen depreciates, the Japanese car will threaten BMW's competitive position. Expanding a facility with flexibility in production helps to distribute the risks of changes in the currency market and in exchange rates.

CONCLUSION

There are 4 major factors driving BMW's globalization,

Global market forces

The pressure created by Japanese or foreign competitor pushes BMW to be more competitive in price in the U.S. market, and further to be more competitive in worldwide later. Surely, the U.S. is the largest market but not the only market. If there were any opportunities created by other foreign markets, then the U.S. facility would be a successful model to help BMW entering other countries.

Technological forces

Since the U.S. has above averaged vehicle industry background, hiring skilled labor is not a difficult thing. The transfer of engineers would be held

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