BMW Group, one of the 10 largest automotive companies in the world today, started as a manufacturer of aircraft engines in World War I and began building a reputation for reliability and excellence on that undertaking. Initially known as Bayerische Flugzeug-Werke in 1916,the firm changed its name to Bavarian Motor Works in 1917 as it grew rapidly during the war years. In 1923, BMW put together its first motor vehicle, a motorcycle, followed by its first car in 1928, a version of Austin 7, which was built and commercially sold under license. There was no stopping the company since then. Today, the Group operates in 150 countries through 26 production-assembly plants, 35 subsidiary markets and 12 R&D networks. Its flagship products consist of three automotive brands - BMW, MINI and Rolls Royce. All three vehicles share the same configuration, which suggest luxury, premium class, top-of-the-line quality. This is precisely the corporate culture that animates BMW, which is expressed in its mission statement: "to be the most successful premium manufacturer in the industry." BMW built a solid reputation on this operational strategy.With this kind of philosophy underpinning all BMW's activities, the company produces nothing but premium-class vehicles, which are limited to exclusive sedans and luxury limousines. The side objectives are to set the industry standards for technology, environmental protection and safety, and providing outstanding customer services in the pre- and after-sale phases. These are enshrined in the firm's operations in its 10 R&D facilities worldwide (4 in Munich, 3 in the US and 1 each in Austria, Tokyo and Beijing), 15 production plants (1 in Berlin, 1 in Munich, 4 in UK, and 1 each in China, South Africa, US, Austria and Brazil), 5 assembly plants with local participation (1 each in Indonesia, Russia, Egypt, Malaysia and Thailand), and sales and marketing subsidiaries in 35 countries.
In 2005, the company invested 2,597 million euros to boost its property, plant, equipment and other tangible assets, with emphasis on further expanding its production and sales networks. The amount was 81 percent higher than the 1,396 million euros sunk in the firm in 2004 as capital expenditures. A lion's share of this investment went to the company's R&D network, which has been tasked to come up with the BMW "cars of the future." This is part of an expansion plan that has preoccupied management from the start. In 1994, BMW acquired the Rover Group from British Aerospace in the hope that it could duplicate its earlier success with MINI, which used to be a British-owned firm too. For at least six years, some 1 million Rover vehicles were produced in UK yearly until the company suffered losses reaching $2 million per day as a result of the perceived lack of consumer confidence in the brand and the strengthening of the pound. BMW was then forced to sell Rover to the Ford group in 2000. As for the MINI, BMW hang on to the more successful brand, which is manufactured in its Oxford plant. Market demand for the MINI has never let up, such that at the time BMW was selling Rover, it was pouring in another 50 million euros to increase MINI production.
BMW fosters the core values of technology, quality, performance and exclusivity, such that its activities from R&D to sales are committed to achieving the highest quality for products and services. The overall strategy of the company is first, identify areas with growth potential, understand what they represent, recognize where its strength lies, then make the best of every opportunity by pursuing a clear strategy. These considerations guide BMW's structure and how decisions are made, and from the evidence it works like a charm.