BMW Vs Tesla Assignment

1. B M W
V S
T E S L A
G R O U P 1 1 - B M D E

2. INDUSTRY AND FIRM
Businesses have increasingly adopted digital solutions to streamline
operations and improve customer experience.
COVID-19 pandemic has accelerated the trend of online shopping and remote
work.
Automotive sector is fast becoming the electric vehicle sector.
BMW is one of the world's most successful automotive companies and a
leading global supplier of premium and luxury cars and vans.
Our analysis will focus on the BMW and its transformation in the automotive
sector.

3. BMW has undergone a transformation in the automotive sector, with a focus
on electric vehicles and sustainability.
As early as 2023, the Group will offer at least one fully electric model in
virtually all key segments. From 2025 onwards, the BMW Group plans to
increase its delivery share of all-electric vehicles to 50% with the Neue
Klasse, while also further reducing its carbon footprint over the entire life
cycle. In doing so, it will utilize its experience as a pioneer of e-mobility.
Investing heavily in research and development to create new electric
vehicle technologies and charging infrastructure.
BMW is positioning itself for long-term success through its focus on electric
vehicles, sustainability, and innovation.

4. BMW offers a number of electric cars
(EVs) globally. These are a few of the
presently available models:
Vehicles - BMW iX1 xdrive30, BMW iX1
xdrive60, BMW iX, BMW iXM60, BMW i4,
BMW i4 M50, BMW iX3
01 02
02
02 03
BMW iDrive stands today for a multi-sensory
vehicle experience. It involves an intuitive
interaction between the human and vehicle
via voice, touch operation or gesture; an
emotional driving experience as well as a wide
range of information, entertainment and
digital functions.
The My BMW App and the MINI App
are the universal interface for
seamless communication between
the driver and the vehicle.
Customers thus also hold a direct
connection to the BMW dealer and
to the brand in their hand. The
central BMW ID brings all personal
preferences for vehicle settings
directly from the smartphone to
vehicles equipped with Operating
System 7 or newer.
PRODUCT OFFERING

5. CHALLENGES
Cybersecurity is a major
concern for companies that
move their systems online.
To keep up with technology,
automakers must invest in
staff training and
development.
As more of the vehicle's
capabilities are digitized, it
is important to maintain a
good customer experience.
The digitalization of
production requires
significant investment in
infrastructure, and BMW is
collaborating with smaller
players and technology
companies to produce parts
and offer services.
Data privacy is crucial for EV
manufacturers, who collect
location, driving, and
charging data from users.

6. DIGITAL MATRIX BMW is an industry incumbent, facing
collision at the core.
The company's previous approach of
providing an exclusive object of desire
is faltering as experiences begin to
supersede ownership for millennials
and the generations that follow.
New entrants such as Tesla have
changed the paradigm of how users
interact with their cars and how
improvements and upgrades are
implemented, using digital networks
and computer-optimized driving to
create viable software products.
Digital products and services
challenge traditional products and
services, forcing even incumbents like
BMW to quickly revise and augment
their offerings to stay relevant.
Organizational models are changing,
relying more on data-driven
algorithms rather than isolated
optimization models.

7. COMPETITOR ANALYSIS
The automotive industry optimized internal
combustion engines in response to sustainability,
while Tesla commercialized "zero emission" Electric
Vehicles, thus creating an alternative to ICE.
Tesla's core disruptive strategy is its electric
powertrain based on better battery technology,
replacing ICE.
Tesla is the competition for BMW in this scenario.
Between 2016 and 2020, Tesla's revenues increased
at a compound annual growth rate (CAGR) of 45%.
Tesla delivered more than 936,000 vehicles in 2021,
almost tripling its output from the previous year.
Tesla is positioning itself to advance the
automobile industry and quicken the global switch
to sustainable energy by ramping up production at
existing plants and opening two more in the near
future.

8. D S
D D
DISINTERMEDIATION
Tesla produces all of its automobiles,
superchargers, and solar systems in-house,
eliminating several intermediaries. Tesla
streamlines its supply chain, improves
procurement and quality control, and introduces
a new business model where consumers may
buy a vehicle plus an infrastructure licence.
Tesla can improve customer relations and
provide value throughout the supply chain.
SMART EV'S
Tesla eliminated the hardware-software divide in the
car industry. Because to its excellent software
integration, Tesla's vehicles are like computers on
wheels. This enables Tesla to create a highly visible
and digitalized user interface with large touchscreens,
dynamic operating systems, engaging applications,
and digital features like over-the-air software
upgrades. Tesla's EVs' software and hardware design
enables autonomous driving, automating the driving
experience.
DEALERSHIP BUSINESS MODEL
Challenging the franchise auto dealership business
model: Tesla sold completely electric cars via e-
commerce platforms and company-owned storefronts,
exceeding expectations by delivering approximately
500,000 vehicles to customers and making more than
$31.5 billion in 2020. Tesla disrupted the franchise
auto dealership business model by focusing on
customer interaction and value creation across the
supply chain.
DIGITALIZATION
Traditional automobiles had buttons, knobs, and
switches. Tesla digitalized and visualised automobile
interiors, disrupting the industry. Tesla's EVs include
large touchscreens, interactive operating systems,
interesting applications, and digital capabilities
including over-the-air software upgrades. Tesla's
EVs feature a constant 3G internet connection for
over-the-air upgrades, service assistance, and
diagnostics.
COMPETITOR'S DIGITAL STRATEGY

9. BMW plans to switch to all-electric cars towards the end of the decade
The company promises battery-electric cars in all market categories by 2022
By 2025, all new car designs will be electric, and purchasers may choose an all-electric version of any model
BMW will spend €40 billion ($47.09 billion) on battery electric cars between 2022 and 2030
BMW has the highest vertical integration among rivals and produces electric motors and high-voltage
batteries in-house
Factory Dingolfing in Bavaria will employ 2,000 employees to increase electric powertrain component
manufacture
BMW's retail organization is e-mobility trained
Electric cars can be charged everywhere there is electricity, including home, work, or public charging outlets
Public infrastructure building for charging stations is accelerating
BMW is testing a sustainable ship biofuel for production logistics and has partnered with United European Car
Carriers (UECC)
RESPONSE TO COMPETITION

10. Recommendations for existing Business Model
Leverage reputation: BMW should create an EV that can compete with Tesla in terms of range, performance, and
charging time, and leverage its reputation as a premium car brand to attract customers.
Increase production capacity: BMW needs to improve its EV manufacturing capacity by constructing new
production facilities or modernizing existing ones.
Improve battery technology and supply chain: BMW should invest in R&D to enhance their EV battery
technology and consider a vertically integrated supply chain to have greater control over production and
quality.
Build charging infrastructure: Mercedes should invest in developing a charging network equivalent to Tesla's
Supercharger network to improve the desirability of owning a BMW EV.
Creating pull demand: BMW should aggressively promote its EVs and highlight their advantages such as cheaper
fuel expenses, environmental friendliness, and a more enjoyable driving experience. They may also offer
incentives to promote the purchase of their EVs.
Enhance the value proposition: BMW can distinguish itself from Tesla by providing maintenance and repair
services, home charging installation, and car customization to increase brand loyalty and customer satisfaction.

11. BMW is at the centre of the digital automotive sector, thus
it has to modify its structure to satisfy new consumer
wants and current automobile expectations. BMW may
achieve this using Venkatraman's framework:
Increase the value-to-cost
ratio by building digital
goods on the firm's industry
strength. BMW is a luxury
brand. It should have
started with user-friendly
software add-ons. Build a
huge digital services wing
afterwards.
Assess alliance
advantage: Make alliances
based on what can't be
manufactured in-house
and what's most cost-
effective. Alliances
provide maps and
operating systems.
Assess the acquisition
advantage: Early R&D is
frequently the most
costly, particularly in
new technologies.
BMWmay be better off
buying high-tech
startups than creating an
R&D wing.

12. The time and energy saved looking for a parking spot
the money saved, and the ease and versatility gained
Greener alternative to traditional car travel.
Our new business won't be selling cars, but rather offering transportation as a
service. In order to capitalize on the trend of the contemporary consumer towards
ride-sharing, where cars are utilized more effectively and the need for personal
investment is reduced.
Our strategy includes producing electric cars for short- and long-term rental through
subscription or pay-as-you-go models. We'll employ a mobile app where consumers
can choose the vehicles they want to rent and enter their desired rental dates,
passenger count, and other relevant information. Choose a vehicle, and it will be
delivered right to the customer's door. The initial payment for a leased car and the
lease term are both factors. Periodic billing as per the agreement will be carried out.
NEW BUSINESS MODEL

13. BUSINESS MODEL CANVAS
Investors
Payment Processes
charging station
networks
Social media
Customer support
Feedback System
Companies looking for
sustainable travel
Companies that want
to catch up with trend
Individuals who do not
want to invest in fixed
assets.
Individuals looking for
long travel at cheaper
rates
Marketing
Managing cars
Platform development
Application
Tech
Customer loyalty
driver network
Security
Cashless transactions
Removes heavy
investment
Pay for travel
Driver service
Social media
Digital platform
Website
Raw materials
Marketing
Legal licensing
Warranty
Infrastructure
Salary
R&D
Leasing
Charges
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14. T H A N K Y O U !