The fascination and the popularity of luxury cars will never end. Furthermore, BMW automobiles have become not only a sign of class and style but an attribute of the people driving them. No one can argue with the fact that the personality and the individuality of one’s vehicle plays an important role in the majority of cases. It is very easy to see the same cars of the same model and make, but coming across a vehicle, especially a BMW that has been retouched and personalized by its owner. Thus, BMW needs to consider making luxury vehicles with an option of personalization made directly at the assembly plant, without the customer asking other services for help.
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The primary purpose of this paper is the outline a business proposal for BMW, taking into account the importance of proper communication with clients as well as other relevant factors that may contribute to the success of the following plan.
Sources of Research
The study predominantly uses secondary sources that include the BMW annual report as well as other scholarly resources published by third parties. Such sources were instrumental in providing valuable insights into the market background and the innovative ideas BMW can incorporate into the business proposal plan.
Future studies of the proposal can focus on services and products BMW can offer customers in the sphere of vehicle customization. The business plan has shown that BMW can broaden the spectrum of its services to become a leading provider of customizable luxury vehicles in the industry at the same time with sustaining close relationships with its clients.
Business Proposal Plan
According to the Forbes article that was written by Joann Muller, car customizations have been an integral part of the automotive industry for the last decade. Nevertheless, key automotive manufacturers rarely succeed in the area of personalization as their customers are demanding and impatient (Muller 3). With the customizations rarely available from the primary manufacturers, customers have either learned to decline some features to get a vehicle in a preferred color, or reserve to customizations done by separate companies that can turn their dreams and demands into reality.
However, the primary focus of the business proposal should be put on the process of communication between the company and the customers that want to personalize their vehicles according to the high standards BMW will offer.
The audience of the business plan is the primary management staff of the company as well as the main advertising personnel that will promote the new business proposal to the potential customers, including the loyal customers that will benefit from the improvement the most. Furthermore, the management should consider creating a developing a new team of employees that will conduct and control communication between the company and the potential clients of the customization.
It is already known that there are some customization options available for the BMW vehicles; however, this proposal focuses on a closer relationship among the company and its customers. For example, if a client wishes to buy a BMW 5 Series in a color not available in the options offered by the manufacturer, the company should be able to offer the color so that the customer will not think about taking the 5 Series to a specialty customization service. However, the following aspect of the business proposal should be established: the customizations should be done in a manner that does not harm the primary method of manufacturing. Additional customization plants can be established to make sure that the individual requests of the customer do not disrupt the assembly and manufacturing.
Because of the steep competition in the market of cars, especially luxury cars, and because in some aspects BMW is being overshadowed by the rival car manufacturer like Lexus and Mercedes, immediate actions targeted at the closer communication and cooperation with potential customers can set BMW apart from other companies. The methods of establishing communication with customers will be discussed in the next segment of the proposal.
The operation of the new customization plants will require additional specialized staff that can work full time and part-time depending on the quantity of the pending customizations. The financing of the new area will come directly from BMW without any involvement of additional companies or sponsors. Connections with reliable suppliers should be established, so materials needed for customizations fit the high standards of the company as well as the demands of clients that order customizations.
The management of supplier relationships should be built on the procurement strategies targeted at the establishment and organization of a strict and precise process of supply. Furthermore, BMW Group should make sure that the corporate standards are applied in all processes that take place in connection with the customization services and facilities (“BMW Group Annual Report 2014” 205). When the manufacturing process has reached its top levels of flexibility, the challenge remains in the sphere of marketing towards potential customers, assigning brand ambassadors that will share the marketing strategy with the management and advertising departments.
Communication with Customers is the Priority
The statement that listening to customers and communicating with them is the primary aspect of this business plan is unarguable. The more useful feedback BMW can get from the customers, the better the quality of the business-customer relationship will be, and, as a result, the quality of the customization services the company is to provide. The management should conduct detailed research to get insights into the needs of customers in both internal and external environments. Furthermore, by combining qualitative research with quantitative, the BMW research group will be able to offer a balanced method of approaching customers and meeting their needs (Cook 129). The following checklist is advised to be used for establishing adequate communication with potential customers of the BMW customization services:
- Assess limits that frequently appear during communication with clients and develop an elimination plan.
- Make sure that the communication managers measure the quality of the customization before a customer is given his or her vehicle back.
- Reconstruct the procedure of answering to complaints, in a case of any defects in the customized vehicles, ensure no-cost repairs when there is no client’s fault.
- Conduct a post-customization survey to understand the level of customer satisfaction.
- Establish links between the satisfaction of BMW customers and rewards for employees that did their job well.
Because the customization service that the company offers is a broad aspect of the business, effective communication requires careful consideration of the necessary vehicles that will facilitate the communication and provide quality information that will help with establishing an adequate strategy of communication with the company’s customers.
In the competitive market environment where cost-effectiveness is the driver to success, BMW should also consider replacing the ineffective and costly customer communication methods with alternative ones. In this case, customer engagement can be easily turned into profit with the proper processes of segmentation and customer profiling. To get more detailed information about customers, the company should equip its employees with relevant data. Detailed information about customers is also a key component of business that is very complicated to be copied by the competitors that have no access to the activity patterns of customers within other organizations. Thus, such an advantage becomes motivating building a strong relationship with customers that is based on communication.
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Because the supply chain of the automotive industry is undergoing some significant changes and transitions connected with the demands of the customers, BMW should rapidly adapt to the needs to set itself apart and establish its superiority among its competitors. The primary obstacle that may appear in the process of customization facilities establishment is the inability to supply customers with the timeframes that will be acceptable (Miemczyk and Holweg 1). According to the research conducted by Miemczyk and Holweg, the average timeframe for the completed vehicle customization is from five to ten weeks in Europe while in the United States the process may take more than ten weeks. With these figures in mind, there is a very low percentage of vehicles that are being customized specifically to the needs of the customers. Dealerships and centers of vehicle distributions are targeted at the instant gratification from the customers, ensuring that a vehicle is being bought on the spot.
Funding and Timeframe
The timeframe and the budget of the plan implementation depend on how many customization facilities should be built. There are BMW plants in fourteen countries and thirty cities. To start with, there should be a plant established in every country in which the company operates. The implementation should take from two to three years before the company can offer specialized customization services to its clients.
The costs that will go towards establishing new facilities, equipment, employing new workers, logistics, and marketing. These costs do not include any investments from third parties.
|Projected Business Proposal Costs|
|Total Starting Costs||$175,000,000|
|New Facilities Establishment and Equipment||$100,000,000|
|Employing New Staff||$20,000,000|
|Marketing and Advertising||$40,000,000|
Based on the obstacle outlined in the section above, BMW should start building its vehicles not based on the forecasts, but based on calculations to determine the required periods necessary for customization. In this case, an option to personalize a vehicle will be based on the choice which is key for sustaining the competitive advantage of the company (Miemczyk and Holweg 3).
For the customization strategy to become successful, BMW should come up with the optimum time set for the completion of the customer’s order. It is also important to note that the customization services should not be the primary objective of the company but go along with it, maintaining the corporate image of the company.
The activity structures used in the set manufacturing and assembly process should remain unchanged. However, there should be a new standardized cooperation with the primary suppliers that eliminates any disruptions and minimizes the interdependence between the necessary features of various products (Fredriksson and Gadde 701). The logic identified by Lampel and Mintberg as the logic of individualization should be applied in terms of the establishment of new personalization facilities. The developments that relate to the sphere of logistics, information technology, and advertisement should be made to ensure that every customer is satisfied with the timeframe and the quality of the customization while the company is sure that new customers will be attracted by the advertising campaign held by the company.
The individualization logic method implemented by BMW can have a subsequent impact on the process of standardization. Thus, a company should make sure that no customization services reduce the connections between the primary activities and the department of finances (Fredriksson and Gadde 702).
To conclude the business proposal concerning BMW customization services it is important to note the BMW has achieved its record figures as stated in their 2014 Annual Report. However, despite the company occupying a top spot in the market of luxury cars, the strive for new ideas and new services that can be offered to customers is crucial. Some may say that the establishment of customization facilities that will cater to the specific needs of customers is not the best solution in the competitive economy, but on the other hand, a competitive environment calls for measures that will set the company apart from its competitors.
A proposal that will take some significant funding and employment of new members of staff that will implement the customization requires a positive frame of mind, the involvement of major departments within the company. The positive outcome is the increase in profit from individualized orders as well as establishments of a close relationship with customers who wish to set themselves apart from other drivers and show individuality.
BMW Group Annual Report 2014. n.d. Web.
Cook, Sarah. Customer Care Excellence: How to Create an Effective Customer Focus. 5th ed. 2008. London, United Kingdom: Kogan Page. Print.
Fredriksson, Peter, and Lars-Erik Gadde. Flexibility and Rigidity in Customization and Build-to-order Production. 2005. Web.
Miemczyk, Joe, and Matthias Holweg. “Building Cars to Customer Order – What does It Mean for Inbound Logistics Operations?” Journal of Business Logistics 25.2 (2004): 171-198. Print.
Muller, Joann. BMW’s Push for Made-to-Order Cars. 2010. Web.