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BMW and VW group GVC analysis
- 1. PRIVATE CARS GIACOMO RANZINI & ENRICO PANTI The automotive industry, like many others, will be strongly affected by the strong digitalization tendency and the related new Business Model. The consumers will also be less reliant on the own private car and try to achieve a higher flexibility through the different mobility services.
- 2. • Founded in 1937 for belligerent purposes • Late ´90- early ´2000: purchase of 12 other companies (such as Lamborghini) • 133 production plants • Sales network reaching 153 coutries • 664, 496 employees Overview BMW & VW • Founded in 1916 as engines producer • ´20s: Shift to production of car vehicles and motorbikes • 1994: acquisition of the Rover group • 2000: maintenance of mini, sale of the rest of the group • 2002: acquisition of Rolls Royce from VW • 30 production plants in 14 countries • Sale network reaching 140 countries
- 3. Marketshares in Europe- March 2019
- 4. iNEXT: • Shape the premium mobility of tomorrow focusing on the experience • Enforce the presence in E.V. market • Became leader in sustainable mobility (partnership with Daimler) STRATEGIES: iNEXT and Together 2025 Together 202 • Enforce the presence in E.V. market • Empowerment of employees • Enhancement of the premium brands • Specific partnership in the E.V. market for batteries • Became leaders in mobility services
- 5. MOST IMPORTANT SUPPLIERS WHY IS OEMs FOCAL FIRM POSITION THREATHENED? Will the OEMs be able in future to manage the required capabilities to implement this kind of innovations or will they be more and more dependent from tech suppliers? • LG electronics • Visteon • Motherson Sumi System Nuance Communication • Delphi • Mobileye • Intel
- 7. How is value added distributed? To Shareholde rs, 3.37% To Creditors, 7.44% To employees, 66.70% To State , 5.88% To Company, 16.60% Value added distribution Value added distribution
- 8. CHALLENGES DISRUPTIVE INNOVATIONS NEW CAPABILITIES OVERCOME THE WEAKNESSES EMBEDDED IN THE TRADITIONAL BUSINESS MODELS Electrification connectivity Autonomous driving Advanced manufacturing Advanced materials
- 10. Where are personal cars produced?
- 11. DISTRIBUTION CHANNEL Maintain the contact with customers Process sales and customer data Anticipate the trends Keep the focal firm position Orchestrator role
- 12. BRAND FACTOR Brand awareness Implement new services Direct contact with the customers Improve the ownership experience Why didn’t the OEMs exploited their brand in car-relatd services?
- 13. CONCLUSIONS - New capabilities - Battle for talents - New players entering the market Market and consumers are changing Their focal firm position is threatened by new entrants from tech field - Battle for new profit pools - M&A - Industry 4.0 - Car as service - More technology embedded - New business models Suppliers are creating more value
Editor's Notes
- Most of the suppliers of technological components come from china batteries ecc ecc Partner fundamentals to innovate
- Nuance has partnered with the BMW group for more than a decade to deliver on their vision for the in-car experience (voice dialing, voice enabled music and gesture control). OEMs have to work closely with their partners in order to continue to build apps tailored to the car. The competition will be intense particularly because new non-automotive competitors will enter the market.
- EV for the drive train require OEMs to develop new skills in order to produce and implement components that are quite different from the traditional ones drivetrain has less impact on the cost structure Battery pack has a huge importance
- Bmw distribute less value to the employees giving more attention to the shareholders VW is definetly more focused on employees than BMW, distributing less than an half to the shareholders comparing than BMW. BMW retain more value inside the company 24% The leverage of the two companies is pretty similar Usually the OEMs create 30-35 % of the value internally and delgate the rest to theri suppliers.
- OEMs have to quickly respond to this kind of disruptive innovations acquiring new capabilities and changing their traditional business models one of the main challenges is the shift from ownership to car-as-services. Thanks to technology the possibility to overcome the weaknesses embedded in the traditional business models. Focal firms do overlook the whole GVC and should be well equipped to manage critical knowledge technologies and intellectual property issues Have also to have primary knowledge of client, techniques and institutions. OEMs have to maintain their bond with customers and improve the ownership experience in order to continue to exploit their brand. Doing in this way even if the market will be revolutionized by disruptive innovations the perception of the customers will basically remain similar to the actual on, being able to collect data and trends about customers. To keep their position of ff they have to implement the capabilities required by the market in order to be able to continue to optimize the GVC, The main challenge is to continue to manage the information about the customers and sales in order to orchestrate the whole GVC without information the capabilities of the suppliers are useless so in this way they will hold thei FF role. orchestrator
- The automotive industry is highly concentrated. However its value chain is becoming more complex day by day and it’s characterized by a growing number of players. The automotive value chain has evolved over the time from a vertical integration to a complex and geographically dispersed production network due the high specialization required by the market. 1,2,3 tiers suppliers producing components that will be later assembled by the OEMs.
- 25 % of the production takes place in China 13% of the production takes place United Stated 11% of the production takes places in Japan The triangles show where the production in 2004 was in different countries.
- The main challenge is to continue to manage the information about the customers and sales in order to orchestrate the whole GVC without information the capabilities of the suppliers are marginal and, in this way, they can preserve their FF role. Network orchestration is the design and management of the network that work together to achieve a common goal. The orchestrator need to empower its partners and sharing information but keeping the power and being the only one to have access to this kind of data.
- The brand could represent a valid tool for the OEMs to overcome and mitigate the effects of the environment changing. OEMs can leverage their brand awareness to implement new services focused on the improvement of the customer experience and so brand loyalty. OEMs have to maintain their bond with customers and improve the ownership experience in order to continue to exploit their brand. Doing in this way even if the market will be revolutionized by disruptive innovations the perception of the customers will basically remain similar to the actual on, being able to collect data and trends about customers.
- Due to the fast changing of the market OEMs have to acquire and develop new capabilities and skills to compete and create/maintain competitive advantage and their leadership role in the value chain. Industry 4.0 entering in the field of advanced manufacturing and materials. OEMs have to maintain their bond with customers and improve the ownership experience in order to continue to exploit their brand. Doing in this way even if the market will be revolutionized by disruptive innovations the perception of the customers will basically remain similar to the actual one, being able to collect data and trends about customers. We are not sure OEMs will not occupy a FF position in the future cause the market and environment is changing fast but for sure their position in threatened by the entrance of a new actors mostly related to the tech field. OEMs have to maintain their bond with customers and improve the ownership experience in order to continue to exploit their brand. Doing in this way even if the market will be revolutionized by disruptive innovations the perception of the customers will basically remain similar to the actual on, being able to collect data and trends about customers.