Assessment Cover Sheet
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Assessment Title
BMW
Programme Title:
International Logistics Management
Course No.:
TLB 6002
Course Title:
Managing Transport & Logistics Operations
Student Name:
201100594
Student ID:
201100594
Tutor:
Mr. Efce
Due Date:
Date submitted:
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following:
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This assignment is my own work
Any information used has been properly referenced.
I understand that a copy of my work may be used for moderation.
I have kept a copy of this assignment
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Table of Content
Page
Content
1
Cover Page
2
Table of Content
3
Introduction
4
Company Overview
5
Organizational Chart
6
BMW Group Plants
7
Supply Chain explanation
8
Supply Chain
9
PESTEL Analysis
10
PESTEL Analysis
11
Porter’s Five Forces Analysis
12
Conclusion
13
References
Introduction
The supply chain, is where information and materials meet and flow through a
variety of businesses, both downwards and upwards “Reversed Logistics”. These two elements
flows are weapons against competitors, which makes businesses rise or fall. A supply chain is now
a one direction line of materials and information flow, but it is a network of businesses,
manufacturers and suppliers. One product can be made of many components and can be a part of
another product which includes other components. Therefore a supply chain is a network of
business relationships which aims to serve the customer at the end of the supply chain. (Salazar,
2012, p. 11)
In The Kingdom of Bahrain, there are many automobile companies that are under a
global supply chain, “The Global Supply Chain Forum consists of top executives of leading firms
from a wide variety of industries” (Salazar, 2012), automobile companies are one of the global
supply chain industries.
In this assignment, we will be looking at Euro Motors, a leading automobile business
in the Kingdom of Bahrain. The company was established in 1998 with a goal to be the leading
company of automobiles in the Kingdom of Bahrain. Euro Motors started by selling BMW cars
only, and has acquired many other brands such as Rolls Royce, Maserati, Mini Cooper, Land Rover
and more. In Bahrain’s automobile industry, we will perform an industry analysis on Euro Motors
and provide recommendations which will make the business more productive and competitive
locally and regionally.
Company Overview
Euro Motors is located in Sitra, on Sh. Jaber Al Ahmed Al Subah Highway. The
company is surrounded by other car dealer agents such as Ford, Nissan, Porsche and Dodge. This
increases competition between these companies and Euro Motors. On the other hand, it creates a
cluster which improves their sales and concentrates the market for more customers. The show
room is open from Saturday to Thursday from 8:00am to 8:00pm, the company has a website
which provides customers with details about contacts and more information about their
automobile selection. (EuroMotors, 2014)
Euro motors is a luxury car automotive industry, and has a variety of luxury cars, such
as Rolls-Royce, Ferrari, Maserati and BMW, other car brands are also available such as Mini
Cooper and Range Rover. (EuroMotors, 2014)
Euro Motors Values “continually striving to attain the highest standards, technical
employees at Euro Motors undergo rigorous training as a continuous process to put them at the cuttingedge of auto service technology at our new on-site training center.” (EuroMotors, 2014)
The center has high technology mobile diagnostic computer system, which is a system that
identifies troubleshoot errors in the cars, and computer based service diagnostic that provides specific
service guidelines. The company provides sales of high quality and luxury cars, quality assurance, technical
services and customer care. (EuroMotors, 2014)
The interior of the company compromises:
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Reception Area, Service Reception, Spare Parts Reception.
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Coffee Shop.
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Display of Accessories.
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Individual Area.
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New Cars Section.
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Body Shop
The workshop of the company contains the latest technology and equipment
required for all the vehicles the company deals with. The body shop of the company is fully airconditioned which creates a good working condition for the staff and this improves the service
and maintenance levels. (EuroMotors, 2014)
The company’s organizational chart was made from the information provided in their website:Paul Yates
General Manager
Nawaf Khalid Alzayani
Mr. Anthony Raymond
Managing Director
Jaguar Land Rover General
Manager
Hannane Laidouni
Thothathri Natarajan
Jaguar Land Rover Marketing Manager
Chief Accountant
John Ure
Jaguar Land Rover Used Sales
Sirmundo Cruz Orjaliza
Technical Training Manager
Manager
Sreekantkanth Nair
Manal Ali Ahmed Nasser
Jaguar Land Rover
Jaguar Land Rover Chief Accounts
Parts Manager
Sajida Mohammed
Manager
Shehab Saeed
Maserati Marketing Manager
Ameena Yousif
Customer Relations Manager
Marketing Manager
Ziad Chaaban
Jaguar Land Rover after Sales Manager
(EuroMotors, 2014)
The company offers the following car brands:
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




Rolls-Royce Motor Cars
BMW
Mini
Land Rover
Ferrari
Maserati
Jaguar
(EuroMotors, 2014)
BMW Group is one of the biggest supply chains of vehicles available in Euro Motors, therefore,
we will be looking in depth at the logistics function and the supply chain for BMW GROUP cars in
Euro Motors. BMW Group manufactures BMW vehicles, Mini vehicles and Rolls-Royce vehicles.
BMW Group manufactures their products in 14 different countries, we will take each
manufacturing plant separately and illustrate what is being produced in each plant: - (BMW, 2014)
BMW Group Plants
Dingolfing a town in Southern Bavaria, Germany. In this plant BMW cars are
manufactured from beginning to end, raw materials inter the facility such as steel plates, plastic,
leather and other materials and at the end of the process a fully constructed car is manufactured,
the cars being manufactured here are: BMW 3, 4, 5, 6 and 7 series, M5 and M6. (BMW, 2014)
Eisenach a town in Thuringia, Germany. This plant is responsible of manufacturing heavy
machinery that are used in manufacturing vehicle bodies such as doors, hoods and mudguards,
these machines are sent to other manufacturing plants in order to build the new models of cars.
The plant also has design models, engineering services, prototyping and innovators. (BMW, 2014)
Hams Hall a town in Birmingham, United Kingdom. This plant manufactures engines, small,
fuel efficient, low emission engines are manufactured here, the plant was established in 2001, up
until January 2014, 3.5 million engines have been built. (BMW, 2014)
Landshut a city in Bavaria, South-east of Germany. This is one of the largest plants which
has a work force of around 3,300 employees. This plant manufactures suspension components,
plastic components, cockpit and equipment features, electric components and replacement
engines. These components are sent to 28 assembly plants in 13 different countries. This facility
also holds staff training and probation. (BMW, 2014)
In 2001 BMW Group built a plant in Oxford where the company introduced the Mini as a
premium brand. Five types of Mini vehicles. (BMW, 2014)
Many other plants of BMW Group has been established in the last 15 years around the world,
(BMW, 2014) this indicates that the company is expanding, improving and developing rapidly, also
that the company has an increasingly high reputation in the market.
In Euro Motors BMW Group cars are selected considering the specs required for Bahrain.
We will start our way through the supply chain from bottom to top, BMW cars which are sold to
end customers in Bahrain are from Euro Motors only. Euro Motors imports their vehicles from
different plants depending on the series, specification and most cost efficient supply chain
available.
Euro Motors is importing BMW vehicles from Germany, China, Cairo, South Africa and India. Cars
are shipped by Roro vessels which are specialized in transporting cars. The assembly plants in
those countries receive parts from manufacturing plants in Germany by general cargo vessels and
container vessels, manufacturing plants such as Din Golfing, Eisenach and Landshut. These plants
import raw materials from certain countries around the world. And these are listed in the table
below:Raw Materials
Imported From
Molybdenum
America
Iron Ore
Belgium
Aluminum
Brazil
Lithium Copper
Chile
Platinum Group Metals
Russia
Rare Earths Tungsten
China
Cobalt
Democratic Republic of Congo
Platinum Chromium
South Africa
Tantalum Aluminum
Australia
(ERT, 2013)
A diagram of the supply chain of Euro Motors would look like:-
Raw
Raw
Raw
Raw
Materials
Materials
Materials
Materials
(Steel)
(Plastic)
(Glass)
(Leather)
Raw Materials are shipped from
suppliers to the manufacturing
plant for example Dingolfing in
Germany, the raw materials are
Parts are manufactured in
from China, South Africa, and
manufacturing facilities of BMW
BMW
Group around the world. Then the
Manufacturing Plant
using shipping as well as it is
Belgium etc. Raw materials are
shipped by sea because it is the
cheapest mode of transport for
parts are sent to assembly plants
Ex. Dingolfing
raw materials “bulks”.
cheaper and more efficient.
Bavaria, Germany.
At Assembly plants, in Cairo, South Africa and
India and Germany, BMW cars are assembled
and are ready for shipment
W
W
W
W
Plant
Plant
Plant
Plant
Assembly
BM
Assembly
BM
Assembly
BM
Assembly
BM
(BMW, 2014)
(ERT, 2013)
(EuroMotors, 2014)
Cars are shipped by sea using
Euro Motors
Bahrain
Roro vessels from assembly
plants to Euro Motors, Bahrain.
And finally, cars are sold to end
customers. The process of the
supply chain does not end here
as there is one important factor
called feedback. These are
information gathered from
customers and sent back through
the supply chain.
PESTEL Analysis
PESTLE is a tool used to scan the general environment. It is an acronym which stands for
Political, Economic, Social, Technological, Legal and Environmental factors. The PESTLE analysis for
Euro Motors are listed below (the analysis of BMW Group reflects Euro Motors in some cases as
the company is selling their products):Political factors:


Political stability in a country – BMW has manufacturing plants in different
countries, such as Germany, China and South Africa. Any political instability in these
countries can lead to negative implications to BMW and therefore effect Euro
Motors, such as decreased sales and differences in local consumer spending
patterns.
Terrorism – This is a very serious political matter that can have damaging effects to
the company. Fortunately in Bahrain, there are no cases of terrorist attacks on Euro
Motors.
Economic factors:
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
Economic Crisis – To reduce negative economic effects of the recession, BMW
strengthened their brands and product portfolio. Countries like the US suffered
harsh consequences from the crisis and this therefore reduced consumer’s buying
power. This could affect Bahrain and lead to the same consequences.
Fluctuating Currency – Because of political factors, countries can experience a
devaluation or revaluation in their currency. This in turn affects BMW investments
and can either lead to fluctuating profit.
Social factors:
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Customer Choice – The recent trade in almost every industry is related to “going
green”. Consumers are more conscious about global warming and pollution.
Income Levels affect Consumer Demand – With the economic crisis, consumers
have become more aware of saving and spending. This affects the demand of the
automobile and in turn leads to lower sales generated by the company.
Demography – Changes in family structure such as single parents can also have an
effect in the running of BMW Company. Single parents have to consider before
purchasing a premium automobile. Ageing population in certain markets also have
an effect on the demand of BMW cars.
Social Responsibility – Part of BMW’s corporate responsibility is to protect the
interests of consumers and they have done so through their programs such as
social inclusion and road safety. Their employees receive a year-end dividend, are
provided with job security and a work-life balance.
Technological factors:


New sources of energy – This is about gaining a competitive advantage in the
automobile industry. Companies compete in innovating technological
breakthroughs to be able to gain market share in the industry.
Availability of Information – BMW provides information from the history of the
company to its investor relations, research and development till their future plans.
It can be accessed to the public through the company’s user-friendly website.
Legal factors:
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

It is mandatory for companies to follow laws of the country, such as consumer
protection law and employment law. These laws can be in the local, regional or
international levels. Any new law passed by the government at any level can have a
direct impact on Euro Motors.
Patents and trademarks are used by companies to benchmark a certain technology
that they have created. On the other hand, patents and trademarks on certain
automobile innovations can lead to legal issues, especially in the automobile
industry because of increasing popularity of “green” technology and that all the
automobile companies have to imply with laws that are related to health and safety
legislation.
Laws implemented related to CO2 emissions – This factor has a huge impact on the
manufacturing processes of BMW, if vehicles imported by Euro Motors are not
following the rules of CO2 emissions, the vehicles will not be allowed to enter the
country.
Environmental factors:

Factors such as waste disposal and energy consumption fall under environmental
factors. One of the biggest issues that could be facing Euro Motors is disposal of
packaging waste, as the company orders cars or spare parts, they arrive in packages
such as cardboard, these wastes should be dealt with in an environmentally
friendly way, which can decrease the company’s profit. On the other hand, BMW
adopts recycling and reducing waste methods when producing their cars called
Recycling and Disassembly Center. They use a sophisticated central routing
technology to save energy and gives an environment-friendly energy supply. Each
location has a waste material information system to provide an overview on the
flow of waste materials. BMW’s goal is for waste not to occur in the first place.
Porter’s Five Forces Analysis
Porter’s Five Forces is another tool for analysis. According to Michael Porter, these five
forces can influence the company’s decision to either enter a new market or develop a
competitive advantage over other companies in the industry. These are as follows:
Rivalry – There is high competition in the automobile industry. There are many
competitors in Bahrain such as Toyota, Mitsubishi and Ford. Competitors that are close to price
range and brand reputation of BMW are Mercedes and Porsche
Threat of Substitutes – BMW has maintained a good brand image since they first
established in 1921. They are globally well-known as the most successful company in the world.
This means that BMW has close customer relationships, which in turn leads to high brand loyalty.
Since the establishment of Euro Motors, it has been one of the loyal customers to BMW. Some of
the alternatives of using BMW cars are public transportation and carpooling, due to traffic
congestion, cost cutting and environmental awareness. A negative point is that it does not cost
much for consumers to switch to another brand.
Power of Buyers – BMW provides their partners in the Middle East with company cars.
They have a separate department for sales and support called the BMW International Corporate
Sales. The organizations would then buy in large volumes. Bargaining power of buyers is strong
due to the existence of other automobile companies. Buyers can easily switch the competition as
there is a wide product and price range and this involves very less or no cost. The product is not
differentiated, therefore power lies with the buyer.
Power of Supplier – BMW produce premium cars with utmost precision. They only want
the best to accompany the well-crafted automobile. BMW has set standards for their suppliers. In
this case, suppliers have a low power because the company has a network called the International
Purchasing Offices. This network deals with validating suppliers for its local and international
production networks. The supplier’s products are not standardized and this factor makes the
supplier weak. In Euro Motors, as the quality of BMW Group vehicles are the highest worldwide,
the power lays in their hands to increase or decrease the prices of their vehicles.
Barriers to Entry – The luxury car industry requires has high fixed costs. Considering the
price and product range of BMW, threat of new entrants is low. Also, the new entrant would have
to acquire high investments to enter the industry. Advanced technology is required to compete in
such a rapid industry. Existing players in the industry have contracts with suppliers and close
customer relationships, as well as customer brand loyalty. If new entrant would compete, they
would have to start from the beginning to reach the levels of the existing players. Therefore, the
barriers of the automobile industry in Bahrain are very high. For BMW Group Fixed costs are high
and the industry itself is concentrated. At the same time, barriers to exit are high because of
production facilities. As for Euro Motors, barriers to exit are not very high, due to low fixed costs.
Conclusion
Suggestions
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-
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As for the supply chain of Euro Motors, it can be improved in BMW established a new
assembly plant in Dubai. As Jabal Ali Port became one of the most important transport
hubs globally, BMW can benefit from this strategic location which is an effective link to the
Middle East.
As BMW Group has introduced innovations related to the reduction of CO2 emissions, such
as Efficient Dynamics. Euro Motors can start importing those cars to Bahrain, considering
all conditions of Bahrain. This will increase Euro Motors sales dramatically as more people
are aware less green gas emissions means less fuel consumption.
Because of BMW’s investments in Research and Development, they are able to respond to
rival companies with one-of-a-kind designs and technologies. This is one of the benefits of
Euro Motors as their products are being designed and planned for them which makes their
business easier to handle. Euro Motors can take more benefits by sending feedback to
BMW Group manufacturing facilities indicating the requirements of the country and
information about their rivals.
BMW lately introduced Active E, which promises zero emissions and provides driving
dynamics and BMW Clean Energy. If these products were released in Bahrain with a
reasonable price, even though fuel prices are low, customers would thrive to buy these
cars.
References
BMW. (2014, October 5). PRODUCTION WORLDWIDE. Retrieved from BMW Group:
http://www.bmwgroup.com/bmwgroup_prod/e/0_0_www_bmwgroup_com/produktion/produkti
onsnetzwerk/produktionsstandorte/standorte/index.html
Dudovskiy, J. (2012, January 14). BMW PESTEL Analysis. Retrieved from Research Methodology:
http://research-methodology.net/bmw-pestel-analysis/
ERT. (2013, January). AN OVERVIEW. Retrieved from RAW MATERIALS IN THE INDUSTRIAL VALUE CHAIN:
http://www.google.com.bh/url?sa=t&rct=j&q=&esrc=s&source=web&cd=8&cad=rja&uact=8&ved=
0CEYQFjAH&url=http%3A%2F%2Fwww.ert.eu%2Fsites%2Fdefault%2Ffiles%2FRaw%2520Materials
%2520in%2520the%2520Industrial%2520Value%2520Chain%2520%2520January%25202013.pdf&ei=zG
EuroMotors. (2014). About Us. Retrieved from EM Euro Motors: http://euromotors.com.bh/values.php
Gotlib, A. (2014, October 21). BMW. Retrieved from Prezi: http://prezi.com/jugsvw06fvs3/bmw/
Marini, R. (2014, October 20). Portfolio: BMW Marketing Report. Retrieved from academia.edu:
http://www.academia.edu/4158290/Portfolio_BMW_Marketing_Report
Salazar, R. M. (2012). THE EFFECT OF SUPPLY CHAIN MANAGEMENT PROSSES ON COMPETITIVE
ANDVANTAGE AND ORGANIZATIONAL PERFORMANCE. Department of The Air Force, Air University,
1-111.
UKESSAYS. (2014, October 20). The History Of Bmw Stretches Marketing Essay. Retrieved from UK Essays:
http://www.ukessays.com/essays/marketing/the-history-of-bmw-stretches-marketing-essay.php