case study of bmw company

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BMW Marketing Strategy 2024: A Case Study

BMW, the German luxury automobile manufacturer, has been a force to reckon with in the automotive industry since its establishment in 1916. Known for its high-performance vehicles and cutting-edge technology, BMW has successfully positioned itself as a leading brand, captivating the hearts and minds of consumers worldwide. In this case study, we will delve into BMW’s marketing strategy for 2024, exploring its intricate details and the key factors contributing to its success.

Key Takeaways:

• BMW is a renowned German luxury automobile manufacturer.
• The company has a rich history and a strong presence worldwide.
• BMW’s target market comprises affluent professionals, driving enthusiasts, and tech-savvy consumers.
• The brand focuses on delivering premium quality, performance, and style in its products.
• BMW positions itself as a premium brand with a comprehensive promotion strategy and a strong digital presence.

BMW, short for Bayerische Motoren Werke AG, was founded in 1916 as an aircraft engine manufacturer. However, it quickly shifted its focus to producing automobiles and has since become one of the most renowned luxury car manufacturers in the world. The company’s headquarters are located in Munich, Germany, and it operates production facilities in various countries, including Brazil, China, India, the United States, and Mexico.

What sets BMW apart from its competitors is its commitment to quality and innovation. The brand is known for crafting high-quality, luxurious vehicles that offer a perfect blend of style, performance, and cutting-edge technology.

Over the years, BMW has established a rich history of success. The brand has not only produced exquisite cars but has also achieved remarkable victories in racing championships, solidifying its reputation as a leader in the automotive industry.

In addition to its own brand, BMW also owns and produces other well-known names in the automotive world, such as Mini and Rolls-Royce. This diverse portfolio allows BMW to cater to a broad range of consumers with varying preferences and budgets.

BMW’s Target Market

BMW’s target market encompasses a diverse group of affluent professionals, driving enthusiasts, and tech-savvy consumers. The brand has successfully positioned itself as a go-to choice for individuals who highly value both performance and luxury in their vehicles. BMW understands that its target audience seeks not only powerful engines and exceptional handling, but also refined designs and sophisticated features.

In recent years, BMW has further expanded its market reach by introducing electric and hybrid models, attracting environmentally conscious consumers who still desire an exceptional driving experience. By offering a diverse range of vehicles that cater to different segments within its target market, BMW ensures that its marketing efforts resonate effectively with a wide range of consumers.

Affluent Professionals

One of BMW’s key target segments comprises affluent professionals who seek high-quality vehicles that reflect their status and success. These individuals desire the prestige associated with owning a luxury brand like BMW, combined with the performance and technological advancements that the brand offers.

Driving Enthusiasts

BMW’s driving enthusiasts form another crucial segment of its target market. These individuals have a passion for powerful, sporty cars that deliver an exhilarating driving experience. BMW’s reputation as a manufacturer of high-performance vehicles, coupled with its motorsport heritage, appeals directly to these enthusiasts who prioritize speed, handling, and precise engineering.

Tech-Savvy Consumers

In today’s digital age, tech-savvy consumers value the integration of advanced technology in their vehicles. BMW understands this and has made significant advancements in incorporating cutting-edge features and connectivity options in its cars. By offering features such as advanced infotainment systems, mobile app integration, and driver-assist technologies, BMW attracts tech-savvy consumers who prioritize seamless integration of their digital lifestyle with their driving experience.

With a deep understanding of its target market, BMW continues to develop vehicles that cater to the specific desires and needs of these distinct segments. By combining performance, luxury, and technological innovation, BMW maintains its position as a leader in the luxury automobile market.

BMW’s Product Strategy

BMW offers a diverse range of luxury automobiles designed to meet the sophisticated tastes of its discerning customers. The brand’s product strategy focuses on delivering a seamless blend of premium quality, exceptional performance, and captivating style in every vehicle.

BMW’s commitment to excellence is evident in its meticulous attention to detail and use of high-quality materials. The brand continuously pushes the boundaries of innovation to create automobiles that exceed customer expectations. With cutting-edge technology and advanced engineering, BMW vehicles offer a driving experience that is both exhilarating and refined.

Safety, efficiency, and reliability are paramount in BMW’s product strategy. The brand integrates state-of-the-art safety features and advanced driver assistance systems to ensure the well-being of its customers. With a keen focus on reducing emissions and improving fuel efficiency, BMW also offers a wide range of electric and hybrid vehicles, catering to the growing demand for sustainable mobility.

In addition to automobiles, BMW manufactures motorcycles and bicycles for specific markets, catering to niche segments with specialized products. This diverse product portfolio allows BMW to extend its brand reach and cater to the unique preferences of its customers.

The BMW Automobile Lineup

BMW’s product lineup encompasses a wide range of luxurious vehicles, each designed to fulfill specific needs and desires. From elegant sedans and powerful sports cars to versatile SUVs, BMW offers something for every discerning driver.

BMW’s vehicle lineup combines elegance, performance, and advanced technology to provide an unmatched driving experience. Whether it’s the sophistication of the flagship 7 Series or the exhilaration of the M4, BMW vehicles embody the brand’s commitment to exceptional craftsmanship and uncompromising quality.

Through its product strategy, BMW continues to redefine automotive luxury, setting new standards in design, performance, and technology. The brand’s unwavering dedication to innovation ensures that BMW vehicles remain at the forefront of the automotive industry.

BMW’s Price Strategy

BMW is renowned for its position as a premium brand, and its price strategy plays a crucial role in maintaining this image. The prices of BMW cars vary depending on the series and model, allowing customers to choose a vehicle that aligns with their preferences and budget.

The brand’s primary focus is on luxury vehicles, offering a range of high-performance cars that deliver style, comfort, and cutting-edge technology. However, BMW has also recognized the need to broaden its customer base and increase operational reach. To achieve this, the brand has ventured into the realm of budget-friendly automobiles while ensuring they still embody the core BMW values.

By offering a range of price points, BMW aims to cater to a wider audience without compromising the premium image associated with the brand. This strategy allows individuals who appreciate luxury and quality to experience the excellence that BMW stands for, regardless of their budget constraints.

Whether customers opt for a top-of-the-line, high-end BMW or choose a more affordable model, they can expect the same commitment to craftsmanship, performance, and innovation. BMW’s price strategy reinforces its position in the market while providing customers with the freedom to choose a vehicle that suits their needs and aspirations.

Overall, BMW’s price strategy is a testament to its dedication to delivering exceptional quality and value to its customers, regardless of their budget. It is a key component in maintaining the brand’s position as a leading luxury car manufacturer, setting it apart from competitors and ensuring customer satisfaction.

BMW’s Place Strategy

BMW has adopted a strategic approach to its place strategy, which encompasses manufacturing facilities and a network of dealerships worldwide. The brand has established manufacturing plants in key countries such as Germany, Brazil, China, India, the United States, and Mexico. This global presence enables BMW to cater to diverse markets and efficiently produce vehicles for both domestic consumption and international distribution.

Unlike other automotive manufacturers, BMW directly appoints showroom dealers instead of relying on distributors. This approach allows BMW to maintain close relationships with its dealers and provide them with higher margins, ensuring that customers receive a superior buying experience. By cutting out intermediaries, BMW streamlines its distribution channel and maintains control over its brand image.

BMW strategically locates its showrooms in urban areas that align with its target market. This targeted placement facilitates accessibility for potential customers and enhances the brand’s visibility. Placing dealerships in bustling city centers and upscale neighborhoods ensures that BMW’s luxury vehicles are showcased in prime locations, attracting the attention of its target audience.

Showrooms Distribution Breakdown

As the table above illustrates, BMW has a strong presence in Germany, the United States, China, India, and Mexico, with a significant number of showrooms in each country. This strategic distribution allows BMW to maximize its reach and cater to the demands of its target market effectively.

In summary, BMW’s place strategy encompasses a global manufacturing footprint and a direct dealership model. By strategically locating its showrooms in urban areas and fostering strong relationships with dealers, BMW ensures a seamless distribution process, enhances customer experience, and maintains its renowned brand image.

BMW’s Promotion Strategy

BMW employs a comprehensive promotion strategy to maximize its reach and engage its target audience. The brand utilizes various marketing channels , including television and radio advertisements, print ads, and online campaigns. By leveraging these channels, BMW effectively communicates its brand messaging and showcases the unique features and capabilities of its vehicles.

One of the key strengths of BMW’s promotion strategy lies in its visually appealing and memorable commercials. These commercials capture the aesthetics, performance, and technology of BMW vehicles, leaving a lasting impression on viewers. The brand’s creative and captivating advertisements serve as powerful tools in building brand recognition and driving customer interest.

BMW also places great emphasis on customer satisfaction throughout the car-buying process. The brand strives to create memorable experiences for customers by offering exceptional service and personalized attention. This focus on customer satisfaction not only enhances the overall buying experience but also strengthens customer loyalty and generates positive word-of-mouth referrals.

Furthermore, BMW’s promotion strategy extends beyond traditional advertising channels. The brand organizes exclusive events to engage its target audience directly. These events allow BMW enthusiasts and potential customers to experience the brand’s vehicles firsthand, further enhancing brand perception and fostering an emotional connection with the brand.

Another aspect of BMW’s promotion strategy is its utilization of social media platforms. The brand leverages social media campaigns to engage with its target audience and share compelling content. By actively interacting with customers, BMW creates a sense of community and strengthens its brand following.

In addition, BMW collaborates with influencers and celebrities to amplify its brand message and extend its reach to a wider audience. These collaborations enable BMW to tap into the influence and credibility of well-known personalities, reinforcing its brand image and attracting new customers.

The effectiveness of BMW’s promotion strategy can be attributed to its integration of various marketing channels, its focus on customer satisfaction, and its ability to create memorable experiences. By incorporating traditional advertising, exclusive events, social media campaigns, and influencer partnerships, BMW ensures that its promotion strategy reaches and resonates with its target audience, ultimately driving brand awareness and customer engagement.

BMW’s Advertising Campaigns – A Look at the Past and Present

BMW’s advertising campaigns have played a pivotal role in shaping the brand’s image and driving its success. Over the years, the brand has developed iconic and award-winning advertisements that have captured the attention of both automotive enthusiasts and the general public.

One notable advertising campaign by BMW is the “Ultimate Driving Machine” campaign. Launched in the 1970s, this campaign positioned BMW as a brand that prioritizes performance and driving pleasure. The “Ultimate Driving Machine” tagline became synonymous with BMW’s commitment to delivering exhilarating driving experiences.

In recent years, BMW has continued to impress with its advertising campaigns. The brand’s “The Road Home” campaign showcased BMW’s dedication to innovation and high-quality craftsmanship. It highlighted the emotional connection between BMW owners and their vehicles, emphasizing the brand’s long-standing reputation for excellence.

Another standout campaign by BMW is the “Designed for Driving Pleasure” campaign. This campaign focused on the brand’s dedication to designing vehicles that provide unparalleled driving pleasure. It highlighted BMW’s advanced technology, luxurious interiors, and dynamic performance, all aimed at elevating the driving experience.

BMW’s advertising campaigns have consistently captivated audiences by effectively showcasing the brand’s values and attributes. Whether through the “Ultimate Driving Machine,” “The Road Home,” or “Designed for Driving Pleasure,” BMW’s advertising campaigns have left a lasting impact on viewers and solidified its position as a leader in the automotive industry.

Table: Comparison of BMW’s Advertising Campaigns

BMW’s Digital Marketing Strategy

In today’s digital age, BMW understands the significance of digital marketing and recognizes the immense value of having a strong online presence. With its commitment to innovation, BMW has developed an effective digital marketing strategy that allows the brand to engage with its target audience and provide a seamless online experience.

Serving as a Central Hub: The BMW Website

The BMW website serves as a central hub for all things BMW. It provides comprehensive information about the brand’s vehicles, including detailed specifications, features, and customizable options. Customers can easily browse through the available models, compare different variants, and even schedule test drives.

Engaging with the Audience: Social Media Platforms

BMW actively engages with its target audience on various social media platforms, such as Facebook, Instagram, and Twitter. By sharing captivating content, including stunning visuals and engaging videos, BMW showcases its vehicles and captivates the attention of automotive enthusiasts worldwide. The brand also encourages interaction with customers, responding to comments, and even incorporating user-generated content into its social media campaigns.

Utilizing Email Marketing and Mobile Apps

To stay connected with its customers, BMW utilizes email marketing to deliver personalized messages, exclusive offers, and updates on new products and services. Additionally, BMW has developed mobile apps that provide users with a convenient and immersive BMW experience. These apps offer features like vehicle configuration, service scheduling, and even augmented reality experiences that allow customers to interact with BMW models virtually.

Enhancing the Digital Experience: Virtual Showrooms and Augmented Reality

BMW leverages technology to enhance the digital experience for its customers. The brand has created virtual showrooms, enabling customers to explore BMW car models in a dynamic and interactive virtual environment. Moreover, BMW uses augmented reality to provide customers with the opportunity to view and visualize different vehicle models through their smartphones or tablets, allowing for a more immersive and engaging experience.

Reaching a Global Audience: Digital Innovation

BMW’s digital marketing strategy ensures that it reaches a global audience. The brand makes use of search engine optimization (SEO) techniques to improve its online visibility and attract relevant traffic to its website. By employing data analytics and customer insights, BMW continuously adapts its digital strategy to meet changing consumer preferences and demands, ensuring that it remains at the forefront of digital innovation in the automotive industry.

BMW’s Online Presence on Social Media Platforms

BMW’s marketing strategy has played a pivotal role in positioning the brand as a frontrunner in the automotive industry. By focusing on luxury, performance, and innovation, BMW has successfully captured the attention of its target market, which includes affluent professionals, driving enthusiasts, and tech-savvy consumers. The company’s commitment to delivering high-quality products is evident through its emphasis on safety, efficiency, and reliability.

BMW’s pricing strategy, which positions the brand as a premium choice, adds to its desirability and exclusivity. By offering a range of price points, BMW has been able to expand its customer base and maintain its premium brand image. Furthermore, the brand’s distribution strategy, promotion strategy, and digital marketing initiatives have all contributed to enhancing BMW’s brand perception and engaging customers effectively.

Overall, BMW’s marketing strategy serves as a benchmark for excellence in the automotive industry. The brand’s ability to consistently deliver on its promise of luxury, performance, and innovation has solidified its position as a leader in the market. With its strong emphasis on customer satisfaction and its relentless pursuit of technological advancements, BMW continues to set itself apart from its competitors and shape the future of the automotive industry.

What is BMW?

BMW is a German automobile engine manufacturing company that is known for its luxury automobiles, motorcycles, and bicycles. It was founded in 1916 as an aircraft engine manufacturer and later transitioned into producing automobiles.

Where is BMW headquartered?

BMW is headquartered in Munich, Germany.

What is BMW’s target market?

BMW’s target market consists of affluent professionals, driving enthusiasts, and tech-savvy consumers who value performance and luxury in their vehicles.

What types of vehicles does BMW offer?

BMW offers a range of luxury automobiles, including sedans, sports cars, and SUVs. The brand also manufactures motorcycles and bicycles for certain markets.

How does BMW position its brand?

BMW positions itself as a premium brand, focusing on delivering premium quality, performance, and style in its products. The brand’s pricing reflects its premium positioning.

Where are BMW’s manufacturing facilities located?

BMW has manufacturing facilities in various countries, including Germany, Brazil, China, India, the United States, and Mexico.

What is BMW’s promotion strategy?

BMW utilizes various channels of marketing such as television ads, print ads, and online advertisements to reach its target audience. The brand also focuses on customer satisfaction and creates memorable experiences for customers during the car-buying process.

How does BMW approach digital marketing?

BMW has a strong online presence and actively engages with its audience on social media platforms. The brand utilizes email marketing, mobile apps, virtual showrooms, and augmented reality experiences to enhance the customer’s digital experience.

What is BMW’s marketing strategy?

BMW’s marketing strategy focuses on luxury, performance, and innovation to resonate with its target market. The company’s product strategy emphasizes safety, efficiency, and reliability, while its price strategy positions the brand as a premium choice. BMW’s distribution strategy, promotion strategy, and digital marketing initiatives further strengthen its brand image and customer engagement.

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The new BMW: business model innovation transforms an automotive leader

Journal of Business Strategy

ISSN : 0275-6668

Article publication date: 6 July 2020

Issue publication date: 7 July 2021

The car no longer serves simply as a means of transport but is at the core of a new concept of mobility. Car manufacturers are seizing opportunities to change the traditional business model of the auto business. Innovation in this business model has become vital to survival in today’s dynamic market conditions. This paper aims to find out what factors motivate and drive business model change and what the resulting business model innovation is.

Design/methodology/approach

This qualitative study is based on a single case, namely, BMW as an illustrative example of an advanced, highly innovative customer-centric service business model (BM). The study adopts a document analysis method to reveal the firm’s BMI process.

First, the study presents a conceptual framework for business model change with the factors –motivators and drivers – that impact on the process of change. BMW’s BMI and its impacting factors are discussed based on this model. The McKinsey 7 s Model framework, the elements of which are strategy, structure, systems, shared values, style, staff and skills is used as an analytical tool to discuss new business model implementation. The study highlights the BM configuration of a traditional car manufacturer, the car as a product and the new car as a service concept.

Originality/value

This study reveals the BMI of BMW’s digital services and its key motivators and drivers. BMW mostly innovates in three key dimensions of the Business model. These are value creation, value delivery and value capture. Most of the elements in these dimensions are innovated.

• Business model innovation

Kukkamalla, P.K. , Bikfalvi, A. and Arbussa, A. (2021), "The new BMW: business model innovation transforms an automotive leader", Journal of Business Strategy , Vol. 42 No. 4, pp. 268-277. https://doi.org/10.1108/JBS-02-2020-0021

Emerald Publishing Limited

Copyright © 2020, Prasanna Kumar Kukkamalla, Andrea Bikfalvi and Anna Arbussa.

Published by Emerald Publishing Limited. This article is published under the Creative Commons Attribution (CC BY 4.0) licence. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this licence may be seen at http://creativecommons.org/licences/by/4.0/legalcode

Introduction

Technological innovations, market dynamics and changes in customer preferences have greatly impacted the traditional business model of manufacturing firms. While many firms struggle to generate a substantial profit from product sales, others try to identify opportunities by integrating product-related and value-added services. The days are gone when firms focused solely on product-centric business. A new business strategy known as service integration has evolved in the manufacturing sector. Changes happen at the level of value creation, value delivery and value capture. Any change in these dimensions ultimately results in business model innovation which is defined as an activity or process in which core elements of an enterprise and its business rationale are purposely transformed to achieve operational and strategic advancements.

The innovation in business models is novel and complex in nature, and it connects with various aspects such as corporate strategy, technological capabilities and firms’ innovation processes. Business models are periodically impacted by technological innovations either by creating an opportunity or by taking a risk which will result in competitive advantage or disruption. Business model innovation is often the result of external factors such as competition law, labour market legislation and environmental legislation. The automotive industry has long been applying the traditional model. The value of this kind of model depends on being able to offer more cost-effectiveness, low emission engines and extra safety packs that may include auto-braking and chassis control, among others ( Chrysakis, 2017 ). However, these features no longer create competitive advantages, and they have proved easy to copy. Many car manufacturing firms have lately integrated or are planning to integrate customer services such as mobility services, on-demand services and infotainment services in their core business operations. While practitioners and research communities have paid much attention to business model innovation, an industry-specific model, for example how car manufacturers orchestrate their business model and which elements are impacted by this change, is yet to emerge. To fill this knowledge gap, we narrow down the research on innovation in business models by focusing attention on BMW, considered to be one of the leading industry players for advanced services and a successful business model innovator.

The structure of this article is as follows: first, this study explores the business model literature to outline the factors impacting innovation, and a framework for the business model innovation process is proposed. This framework is then used to discuss each element of the business model related to ConnectedDrive and the corresponding degree of innovation. Last, the paper compares the traditional and service integrated business models, as Figure 1 shows.

The factors behind business model change

A set of factors was synthesised and classified into two groups ( Figure 1 ): motivators (inspire the firm) and drivers (facilitate change).

Change can be triggered by internal factors such as organisational culture, the firm’s aspirations, management support and new revenue channels, or by external factors such as market pressure for innovation and differentiation.

Different factors can facilitate the innovation process, including market-level factors such as information and communication technologies (ICTs), big data, external drivers (globalisation, deregulation), the ability of firms to identify changes, co-development relationships, stakeholder demands, knowledge management infrastructure and management processes.

Dimensions of innovation

Rayna and Striukova (2016) find five dimensions of value in the business model literature: creation, proposition, capture, delivery and communication. This article discusses three of the most relevant values to the case study: creation, delivery and capture.

Value creation

Firms create value for the product and services with their core competencies, key resources, governance, complementary assets and value networks.

Value delivery

This dimension describes how the value created is delivered to customers through distribution channels These elements offer ample opportunity for innovation by addressing the needs of the market segment (for instance, a mobility service that targets short term travel needs), or by introducing a new way to deliver products or services (for instance, Netflix or Amazon Prime).

Value capture

This refers to the firm’s ability to benefit from the value created. It includes the revenue model used to generate cash flow and the cost structure. Value capture also includes profit allocation across the value chain. Innovation may allow a firm to gain market leadership through cost restructuring.

Degree of innovation

Changes in the elements of the business model influence the degree of innovation. Amit and Zott (2012) categorise innovation as radical or incremental. Radical innovation is an innovation with a high degree of novelty, which breaks with what existed previously. John Deere, for example, has revolutionised the farming industry by integrating sensor technology into its tractors. In contrast, incremental innovation has a low degree of novelty, and with less risk and cost than radical innovation. For instance, electric windows, air bags, cup holders and ABS brakes are all examples of the incremental innovations made to cars.

Case background

BMW is one of the leading firms in the automotive industry, not only offering premium vehicles but for many years also providing customer with financial, on-demand and telematics services. The firm's transformation to customer-centric began by introducing telematics services in 1997. For the past 22 years, BMW has not only been offering telematics services, but has become the dominant force in the digital service market. The range of services available for current BMW models includes a personal telephone information service, emergency calls, Google Local Search, traffic information and internet-based services for navigation, communication and infotainment. These services are available in 45 countries, and there are already over 10 million connected BMW vehicles on the world’s roads.

Methodology

For this research, a single case study method was used. The case study research method as described by ( Yin, 2003 ) is a suitable method for obtaining insights into the innovation approach. This study follows the document analysis technique ( Bowen, 2009 ), a systematic procedure for reviewing and evaluating both printed documents and digital material. It is especially applicable to qualitative case studies, which are intensive analyses that produce rich descriptions of a single phenomenon, event, organisation or programme ( Stake, 2000 ; Yin, 1994 ). The data was gathered from BMW press releases, websites, annual reports, company announcements and collaboration announcements.

Factors behind innovation

Motivators..

Three motivators behind BMW’s decision to change its product-centric model to a service model were identified. These are organisational culture, competitive advantage and additional revenue ( Table 1 ). Regarding organisational culture, as a pioneer in the market, BMW always strives to be innovative in its core business activities. With aspirations of being a pioneer in technology and a first mover in the market, in 1997 BMW launched internet services in the car (telematics service). BMW has kept its commitment to offer more customer-centric solutions, expressing its organisational culture in the following ways: “we committed”, “as promised”, “being a first mover” and “technology pioneer”. The integration of services of this kind prompted the start of change in its business model.

The increase in competition from emerging markets and dynamic market conditions has led car manufacturing firms to focus more on innovations. In 1997, the digital service market was in the expansion stage, and there were not many players in the market. BMW used this opportunity to create a competitive advantage for their fleets. Twenty years in telematics services have proved their strategy to be successful, and BMW has kept its leading position in the digital service market. Creating a competitive advantage is one of the reasons behind innovation.

Light vehicle production on a global basis dropped during the 1998 calendar year, falling nearly two per cent to 51.6 million units. This decline, starting in 1997, stemmed from the collapse of the Asia-Pacific region economies where automotive output declined by 11% to 14.5 million units.

To create additional revenue streams, BMW introduced digital services into the market. In-service integration model firms generate revenue by providing customer solutions and creating new revenue channel sources ( Liang et al. , 2017 ). This could have been one possible motivation for BMW to change to a service-based firm. One vice-president described this movement: “We build digital products and services that are meant to help us differentiate our core product, the car, and generate revenue.” These services have been offered for several years, but the firm does not reveal its exact revenue from these services. Information gleaned from the annual reports and the expansion of third-party services in the digital service platform indicate that BMW receives a substantial amount of revenue from these services. Aspirations of additional revenue is obviously one of the factors behind the change.

Regarding the drivers that facilitated the change, BMW relied on technology integration, collaborations, dynamic capabilities and knowledge process activities. IT (information technology) firms have expanded their business into the automotive industry landscape, offering customer services such as parking payments and in-vehicle services. With their dominant technological knowledge and market power, they disrupt the business model of the automotive industry. In this competitive situation, instead of competing with each other, BMW teamed up with these firms. A board member commented on this move: “We cannot offer clients the perfect experience without help from one of these technology companies. Two worlds are colliding here. Our world focused on hardware and our experience in making complex products, and the world of information technology, which is intruding more and more into our life”.

Given that the telematics service business seemed to be taking off, BMW escalated the service integration process by making collaborative agreements with various stakeholders such as technological firms and telecommunications providers. Instead of developing the technology itself, the company opted for a collaborative strategy to access a partner’s service and to provide an opportunity to integrate services as third-party service suppliers. For example, the firm has developed central engine control units through cooperation with partners such as Bosch and Siemens.

To sum up, the firm’s key motivation behind these collaborations was not simply to integrate the partner's services but to select only innovative technology and widely accepted solutions in the market such as on-demand music and navigation services.

With regard to dynamic capabilities, in an online interview Ian Robertson, member of the Management Board BMW AG, pointed out that “We are one of the world’s, if not the, most successful automotive companies and we are rapidly becoming a technology company”. In line with this vision, BMW has developed new capabilities such as the ability to integrate, build and reconfigure internal and external competencies to address rapidly changing environments. In 2001, the BMW Group Launched VIA 2.0 (The Virtual Innovation Agency), the online platform for people with ideas. All ideas, concepts and patents for new technologies that could be used by the BMW Group in its products and services in the short, medium and long term can be submitted online.

Effective knowledge process activities accelerate the change process. These activities include the capture, transformation and use of knowledge to design new services ( Ansari et al. , 2012 ). BMW generates a huge amount of data about vehicle conditions, drivers’ behaviour, and user service preference through the digital service platform. This data is processed by the firm and/or supply chain partner to design and develop new services. These (data collecting) processing activities serve BMW’s legitimate interest in meeting the high standards placed by customers on existing products and services and being capable of satisfying customers' future wishes through the development of new products and services (Data protection, BMW). BMW has associated with leading technology centres in Europe, Japan and the USA, immediately entering all the knowledge and information gained into a central Intranet system made available to all associates to promote new ideas and networked thinking.

Traditional business model vs service business model

Press notes and media announcements made by BMW were analysed to present the two models. One is the traditional model (Car as a product) and the other is a new model (Car as a service). The first still exists in the company and the new model is being built for ConnectedDrive services ( Table 2 ). Analysis of the business model reveals different views, one traditional and the other new.

In the traditional model, value creation is based on the firm’s resources, capabilities and activities. Sometimes key resources are acquired from the supply chain network, but within the automotive business landscape. Meanwhile, in the new model, value comes from integration technology (established in the market or new to the market), knowledge process activities (customer knowledge) and collaborations (mostly IT firms).

In the traditional model, the firm uses dealer networks and their own distribution channel to deliver the product (car). The customer segment is mostly people who love luxury products, fuel-efficiency and design. However, in the new model, BMW uses its own network (store and online) to deliver services. BMW mainly targets people who love digital services. In the traditional model, BMW generates income through the sale of products and spare parts. Other basic services like maintenance and insurance also contribute a substantial amount of revenue. Most of the cost structure in the traditional model involves R&D, production, sales and marketing and training. In the new model, BMW has created various pricing models to generate revenue such as Freemium and Subscription mode (bundle and flexible). They invest money in activities such as service design, technology acquisition and knowledge management.

Implementation of a new business model

The study explored BMW’s new business model implantation process through McKinsey's 7S Framework ( Waterman et al. , 1980 ). The model is often used as an organisational analysis tool to assess and monitor changes in the internal environment of the firm. The findings are discussed through seven aspects of BMW that align for the successful integration of digital services and expansion of ConnectedDrive services: structure, strategy, systems, skills, style, staff and shared values ( Figure 2 ).

This defines how a firm is organised for transformation. The automobile industry has expanded into a digital service ecosystem. External factors such as the evolution of digital services, customer preferences and market trends have led BMW to focus on digital services. BMW introduced these services in 2008, and they have gradually expanded over the years. The company continually monitors these service adaptabilities in the market and improves them based on customer reviews and feedback. This observation emphasises the fact that for effective transformation a firm needs to focus on external elements such as market trends and customer preferences. Firms also need to focus on customer complaints, reviews and feedback to improve service quality.

Strategy is the way a firm aims to improve its position through better value for its customers. BMW adopted technologies that are well accepted in the market and integrated into their service portfolio. Chesbrough and Schwartz (2007) argue that firms can innovate the business model by establishing co-development relationships with different stakeholders. Along with their own digital services, after collaborations. BMW started third-party services in a digital service network. The reason behind these third-party service integrations was that customers like technologies such as apply play, on-demand music and navigation services while driving. BMW set up its own digital platform to deliver its services to customers who can acquire them through the website and the App Store. The results showed that BMW adopted a collaborative strategy with established IT firms.

Systems are defined as all the procedures, both formal and informal, that make the organisation perform better. BMW’s digital services emerged from the innovation of elements in the business model. Innovation started with changing the key activities of the firm. BMW set up a 24/7 customer service centre to answer all enquiries related to ConnectedDrive services, where customers can interact with the service provider through social media. In March 2019, the firm also introduced an intelligent personal assistant to help drivers with driving-related issues. These kinds of activities lead to generating customer information and related knowledge. In addition, BMW also involves customers in early customer service designing processes. This innovative step enables a more collaborative relationship with customers as a way of meeting customer expectations.

In 2014, BMW appointed Dieter May as senior Vice-President for digital products and services to lead the way in staff. At that time, he had had 23 years’ experience in global high-tech companies, spanning mobile products, large-scale cloud-based consumer services and semiconductor technology. BMW also invited creative ideas for products and services through the “Virtual Innovation Agency”. The company associated with selected people for service development, and with several research units and start-ups for new service developments, for instance offering industrial PhDs where researchers develop products and services for BMW. A general manager of product and channel development at BMW Group UK commented: “BMW opened its doors to external entrepreneurs to partner with them to support our innovation plan. This way we develop new services that tackle the changing customer needs we are seeing, and they help us find new ways to capitalise on new technologies”. This observation showed that for an effective transformation a firm should take advantage of experienced personnel and associate with creative minds.

Style refers to how management acts in achieving the organisation’s mission within the cultural context of the firm. BMW is one of the first movers in the digital services market, striving to be a market leader and pioneer in the digital service business. A general manager of product and channel development at BMW commented: “You need to learn to get from idea to implementation quickly. It’s something we strive to do. And BMW’s commitment to innovation across our business is coming from the very top of the company – our executive team see this as a key part of their strategy for the business”. Another factor observed in this study is that BMW clearly defined its transformation and new image in the market. The vice-president of digital services and business models commented: “The BMW Group is working to shift from a traditional luxury auto manufacturer and service provider to a technology company, with automated driving, digital connectivity, mobility services and electrification as some of the central pillars of our new strategy”. The results show that the firm needs support and cooperation for transformation, and they must have a clear vision of where this transformation is leading.

Skills are the organisation’s dominant attributes, competencies and capabilities. BMW established the capabilities required for digital services, which include sensing, identifying and assessing emerging opportunities. Establishing these capabilities is completely new in the automotive industry. First, the company hired experienced people to lead the digital services business. It then associated with established IT firms and other firms to acquire know-how technology and competences. For instance, BMW acquired analytical capabilities by teaming with IBM. IBM’s cloud platform Bluemix gives developers access to BMW’s entire service catalogue and its ecosystem partners to build and operate innovative new service offerings. The general manager of IBM explained this collaboration: “The concept of a neutral server fosters innovation by establishing a single point of contact for multiple parties to access vehicle data from various manufacturers, thereby reducing integration cost whilst ensuring fair competition”. The results showed that BMW acquired skills and competencies from IT partners. Some competencies are co-developed with partners. To sum up, for effective new business model implementation a firm needs to develop and acquire skills and capabilities.

Shared value

Shared value is defined as the norms and standards that guide a firm’s action, or the core vision of the firm. Creating a digital environment for drivers is the core vision of ConnectedDrive services. The vice President of Digital Products and Services expressed this vision as: “We build digital products and services that are meant to help us differentiate our core product, the car, and generate revenue. These digital services also provide us with channels and touch points that allow us to now have a direct relationship with the customer on the sales side and talk to the customer directly”. BMW’s mission for ConnectedDrive services is to establish better customer relationships and new revenue streams.

The aim of the present study is twofold: first, to examine a business model innovation framework with influencing factors and to contrast it with empirical evidence. This goal was achieved by presenting a conceptual framework and applying it as an analytical tool to describe BMW’s model development. Second, this research showed how BMW innovates each element in the model dimensions, which were then categorised into various degrees of innovation. The study also showed how BMW orchestrates innovation for digital services. To effectively adopt changes in the business model, the firm must first clearly understand what motivates this transformation. The firm should focus on factors such as market dynamics and other external forces that influence business landscapes. However, the firm should be aware that these forces can create an advantage or risk. Motivation alone is not enough to change the model, but the firm should find drivers that facilitate this transformation. The firm must have the support of these drivers to create an efficient model.

Market dynamics have changed dramatically, and the firm needs to develop dynamic capabilities to shape business activities according to demand. Firms cannot create value through their products or services alone but rather need to collaborate with other stakeholders to create a value constellation, as suggested by Haggège et al. (2017) . By adopting the latest technology, constant service-integration and customer knowledge can transform business activities to be more efficient and effective.

This paper has some limitations. The first one is that it develops a conceptual framework with the factors that emerged from the literature and are validated with a signal case study. The second limitation is that the study depends solely on secondary data. Regarding future research directions, this study recommends that research communities validate the proposed framework in a different context and with multiple case studies. The key element category presented in this study should be expanded further through empirical analysis.

The business model literature focuses on the impacts and benefits in general, proposing strategies for innovation. However, context-specific studies are yet to be uncovered. As a result, empirical illustrations of business model innovation in the automotive industry are lacking. This study contributes by highlighting the issue through presenting the business model of BMW for digital services. The results of this study can help managers to understand how innovation in business models may be orchestrated and what elements they need to focus on.

Acknowledgments

An earlier version of this article has been presented at the 4th International Conference on New Business Models “New Business Models for Sustainable Entrepreneurship, Innovation, and Transformation”, ESCP Europe Berlin, 1-3 July 2019, Berlin, Germany. The corresponding author would like to express his gratitude to the Department of Business Administration and Product Design, University of Girona (Spain) for financial support for the conference. The corresponding author would also like to thank his colleagues in the Centre for Research on Operation, Projects and Services (CROPS), Tampere University, and colleagues in the Department of Business Administration and Product Design, the University of Girona for their thoughtful and valuable comments.

Framework of analysis

Illustration of business model Implementation through McKinsey 7 s model

Factors behind business model innovation

Comparison of business model components – car as a product vs car as a service

Source: Author’s own elaboration

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Corresponding author

About the authors.

Prasanna Kumar Kukkamalla is based at the Department of Organization, Business Management, and Product Design, University of Girona, Girona, Spain. He is a Doctoral Candidate at the Department of Organization, Business Management and Product Design, University of Girona, Spain. His research interests focus on business model, organisational transformation, servitisation and service design.

Andrea Bikfalvi is based at the Department of Business Administration and Product Design, University of Girona, Girona, Spain. She is teaching and a Research Staff, ‘Serra Húnter Fellow’ since 2018 at the University of Girona in Spain. During her trajectory, she conducted several research projects for the regional Government of Catalonia, Spain, as well as a series of EU projects. She visited and actively collaborates with researchers in relevant research centres and Higher Education Institutions in Germany, Finland, Croatia, Portugal, etc. Her main research interest is in holistic approaches of innovation in all types of organisations – mainly, but not limited to – public administration, private enterprises and education. Her expertise is in strategy, organisational innovation and business model configuration.

Anna Arbussa is based at the Department of Business Administration and Product Design, University of Girona, Girona, Spain. She is an Associate Professor at the Department of Business Administration and Product Design of the University of Girona. She received her PhD from the same institution in 2001. She has worked on various European projects on electronic payments systems and published articles in the field of technological innovation and technology management. She is currently also working on public health management and on human resources management.

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Case study: How the BMW Group trains employees, fostering their talents

Currently active in more than 150 countries, employing almost 130,000 people, the BMW Group actively promotes long-term employee development by seeking out the right employees, making the most of their individual talents and developing their potential, thereby laying the groundwork for future success.

This case study is based on the 2017 Sustainable Value Report b y the BMW Group published on the Global Reporting Initiative Sustainability Disclosure Database  that can be found at this link . Through all case studies we aim to demonstrate what CSR/ ESG/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing.

In today’s dynamic and fast-changing working world, life-long learning is increasingly gaining in importance. Accordingly, the BMW Group invests, on an ongoing basis, in training its employees and developing their talents     Tweet This! , making sure employees have the skills needed to keep pace with future challenges. In order to train employees, fostering their talents, the BMW Group took action to:

• build digital skills
• develop leadership skills

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• How the BMW Group proceeded with stakeholder engagement , and
• What actions were taken by the BMW Group to train employees, fostering their talents

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What are the material issues the company has identified?

In its 2017 Sustainable Value Report the BMW Group identified a range of material issues, such as fuel efficiency and CO2 emissions of vehicles, prevention of corruption and anti-competitive behaviour, occupational health and safety, environmental and social standards in the supply chain / sustainable sourcing, human rights. Among these, training employees, fostering their talents, stands out as a key material issue for the BMW Group.

Stakeholder engagement in accordance with the GRI Standards

The Global Reporting Initiative (GRI) defines the Principle of Stakeholder Inclusiveness when identifying material issues (or a company’s most important impacts) as follows:

“The reporting organization shall identify its stakeholders, and explain how it has responded to their reasonable expectations and interests.”

Stakeholders must be consulted in the process of identifying a company’s most important impacts and their reasonable expectations and interests must be taken into account. This is an important cornerstone for CSR / sustainability reporting done responsibly.

Key stakeholder groups the BMW Group engages with:  

How stakeholder engagement was made to identify material issues

To identify and prioritise material topics the BMW Group carried out telephone interviews with 13 representative stakeholders. Customers, suppliers, investors, authorities, NGOs and scientists were among the stakeholders interviewed.

In its 2017 Sustainable Value Report the BMW Group reports that it took the following actions for training employees, fostering their talents:

• Building digital skills
• The BMW Group is developing new, digitally networked automobiles that will soon be able to drive completely autonomously. These changes will inevitably affect the way its employees work and the skills they must master. This is why the BMW Group tries to equip existing employees with the expertise they need to keep up with future developments, and to recruit new “digital talents”. The BMW Group already takes into account these new challenges, in its vocational training. For example, BMWAG launched a training programme for IT specialists in 2018 and various training courses that combined information technology with other relevant fields. New skills were already incorporated into existing vocational training programmes in 2017, to equip trainees for the future. At its production sites in China, the USA, South Africa and the UK as well as in Brazil, Thailand and Mexico, the BMW Group continues to rely on the dual system of vocational education and training for young people. In China and Mexico, the BMW Group added the occupation of automotive mechatronics technician to the training portfolio, and increased the number of trainees in the UK and Mexico.
• Developing leadership skills
• Through its Group-wide “Corporate Leadership Programme” the BMW Group provides managers with a wide range of advanced training opportunities. The further development of leadership skills is geared toward transforming the enterprise in accordance with the corporate Strategy NUMBER ONE > NEXT. The BMW Group aims to develop executives who display personal initiative, while also working well with others to successfully lead teams and build networks. They can, then, act as role models and drivers for the company’s digital and cultural transformation. In 2017, these efforts focused on the initiative “Next Experience”: between January and April 2017, almost 13,000 executives took part in a one-day event involving four workshops and an introduction to the new corporate Strategy NUMBER ONE > NEXT. To foster international young talent, the BMW Group also developed the “Global Leader Development Programme”. The programme includes various practical phases in Germany and abroad, targeted training measures and diverse networking and exchange opportunities. Special emphasis is placed on developing intercultural competence.

Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?

The GRI Standards addressed in this case are:

1) Disclosure 404-1 Average hours of training per year per employee

2)  Disclosure 404-2 Programs for upgrading employee skills and transition assistance programs

Disclosure 404-1  Average hours of training per year per employee corresponds to:

• Sustainable Development Goal (SDG) 4 : Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all
• Business theme:  Employee training and education
• Sustainable Development Goal (SDG) 5 : Achieve gender equality and empower all women and girls
• Business theme:  Gender equality
• Sustainable Development Goal (SDG) 8 : Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all

Disclosure 404-2  Programs for upgrading employee skills and transition assistance programs corresponds to:

78% of the world’s 250 largest companies report in accordance with the GRI Standards

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References:

1) This case study is based on published information by the BMW Group, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original, please revert to the original on the Global Reporting Initiative’s Sustainability Disclosure Database at the link:

http://database.globalreporting.org/

2)  https://www.globalreporting.org/standards/gri-standards-download-center/

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Customer Stories / Automotive

BMW Group Uses AWS-Based Data Lake to Unlock the Power of Data

BMW Group uses AWS to process 10 TB of data daily from 1.2 million vehicles, create a voice-activated personal in-vehicle assistant, and derive real-time insights from vehicle and customer telemetry data. The organization, based in Germany, is a leading manufacturer of premium automobiles and motorcycles. BMW Group runs its Cloud Data Hub on AWS, using Amazon SageMaker to train models for predictive analysis.  

Overview | Opportunity | Solution | Outcome | AWS Services Used

Democratizes data

Processes terabytes, resolves issues, accelerates.

The BMW Group , headquartered in Munich, Germany, is a global manufacturer of premium automobiles and motorcycles, covering the brands BMW, BMW Motorrad, MINI, and Rolls-Royce. It also provides premium financial and mobility services.

For the past several years, the BMW Group has worked to stay at the forefront of the automotive industry’s digital transformation by using data and predictive analytics. According to Kai Demtröder, BMW Group vice president of data transformation, artificial intelligence, data and DevOps platforms, “To stay innovative, we are focusing on creating new digital and connected experiences and driving change in our value chain toward improving both efficiency and effectiveness by enabling data-driven decisions." To generate these innovations, in 2015 the BMW Group created a centralized, on-premises data lake that collects and combines anonymized data from sensors in vehicles, operational systems, and data warehouses to derive historical, real-time, and predictive insights.

The BMW Group also sought to give data consumers real-time access, for example, to vehicle telemetry—such as information on speed, location, temperature, battery and brake levels, and engine status. In addition, it wanted to integrate analytics and machine learning into the data lake to accelerate the development of new, innovative services. And, as a basic prerequisite, the solution would have to provide the governance required to ensure compliance with privacy and security regulations.

We are just starting our journey with AWS, and we look forward to helping our business fulfill its strategy of driving innovation into the future."

Kai Demtröder Vice President of Data Transformation, Artificial Intelligence, Data and DevOps Platforms BMW Group

Opportunity | Empowering a Data-Driven Approach

In response to these challenges, the BMW Group decided to re-architect and move its on-premises data lake to the Amazon Web Services (AWS) Cloud. The company’s Cloud Data Hub (CDH) processes and combines anonymized data from vehicle sensors and other sources across the enterprise to make it easily accessible for internal teams creating customer-facing and internal applications. Ultimately, the company found that AWS offered the agility and flexibility it needed, along with the necessary footprint to support users across the globe.

Prior to the migration, the BMW Group’s rigid on-premises data lake failed to meet the ever-increasing needs of data engineers and analysts . Running interdependent workflows, the old data lake couldn’t handle multiple tenants well and, as a consequence, the BMW Group’s platform, ingestion, and use case teams required complex coordination to work on projects and ran into organizational bottlenecks, slowing their pace.

The BMW Group turned to a mix of AWS managed services—including Amazon Athena , Amazon Simple Storage Service (Amazon S3), Amazon Kinesis Data Firehose , and AWS Glue —to reduce the setup’s complexity by differentiating components and create an environment capable of scaling to meet the needs of data engineers. In addition, the teams could now have their own DevOps process from end-to-end, giving them the autonomy and agility needed to continue to innovate. Moreover, the BMW Group implemented a modern web portal that helps users of the CDH discover trusted datasets using an advanced search algorithm and easily query data to generate new insights.

Solution | Democratizing Data Usage at Scale

Using AWS services, the BMW Group ingests a massive amount of data every day. Currently, millions of BMW and MINI vehicles are connected to the CDH via BMW Group’s highly secure backend, processing terabytes of anonymous telemetry data daily. The company uses this data to monitor vehicle health indicators such as check control errors to identify potential issues across vehicle lines. This enables the BMW Group to leverage fleet data ingested, collected, and refined from the CDH to better resolve issues, even before they impact customers.

To better manage this data, the BMW Group introduced the notion of “data providers” and “data consumers” to increase both the autonomy and agility of its software engineering teams. Data providers ingest and transform data with AWS services such as  Amazon Kinesis Data Firehose , AWS Lambda , AWS Glue, and Amazon EMR . Data consumers can then use services such as Amazon Athena, Amazon SageMaker , AWS Glue, and Amazon EMR to leverage data for their use cases. Both providers and consumers use these services in their own accounts and only share well-defined interfaces that can be controlled by a central API, helping prevent bottlenecks. The individual data layers are stored in Amazon S3 buckets, and their schemas are registered in the AWS Glue Data Catalog.

Besides collecting technical metadata in the AWS Glue Data Catalog, the BMW Group found that building up a human-readable data catalog was essential to democratizing data organization-wide. This effort would ensure a high degree of transparency about which data assets are gathered in the CDH and how. The front-end application Data Portal serves as a data explorer to boost the productivity of data analysts, data scientists, and engineers by clearly displaying data resources and offering a “popularity index” based on data usage patterns for more than 500 users across the organization.

In addition, the CDH leverages GraphQL via AWS AppSync to build scalable and universal APIs for data providers and consumers alike, increasing development flexibility. Unlike traditional REST APIs, interfaces built on GraphQL are well-suited to support evolutionary requirements such as representing metadata for the data catalog or providing heterogeneous data collected from connected vehicles. Developers have the flexibility to define the payload structure and query parameters to fetch the data they need for a given use case. This helps them build applications significantly faster than before because they no longer have to create a new set of APIs for each project with a different set of data requirements.

Outcome | Accelerating Innovation

The centralized and AWS-based data lake forms the BMW Group’s foundation to develop data-driven IT solutions and enables the company to automatically and independently scale on a serverless architecture. It can therefore innovate faster than it could with the previous on-premises solution, which required infrastructure management and capacity planning for each new initiative.

The BMW Group will open source key components surrounding the CDH including its APIs, architecture, and Data Portal. This is additionally fueled by the fact that BMW Group is a first day member of Gaia-X, the European initiative for establishing sovereign data spaces.  

Going forward, the BMW Group will continue to scale out the CDH platform’s capabilities to further accelerate its digital transformation and drive additional value across the business, empowering innovative customer experiences, new mobility services, and internal business insights. Demtröder concludes, “We are just starting our journey with AWS, and we look forward to helping our business fulfill its strategy of driving innovation into the future.”

To learn more, visit aws.amazon.com/automotive .

Figure 1: CDH architecture overview

Figure 2: CDH portal view

About the BMW Group

With its four brands—BMW, MINI, Rolls-Royce and BMW Motorrad—the BMW Group is a leading premium manufacturer of automobiles and motorcycles. The company also provides premium financial and mobility services.

AWS Services Used

Amazon kinesis data firehose.

Amazon Kinesis Data Firehose is the easiest way to reliably load streaming data into data lakes, data stores, and analytics services. It can capture, transform, and deliver streaming data to Amazon S3, Amazon Redshift, Amazon Elasticsearch Service, generic HTTP endpoints, and service providers like Datadog, New Relic, MongoDB, and Splunk.

Learn more »

Amazon SageMaker

Amazon SageMaker is a fully managed service that provides every developer and data scientist with the ability to build, train, and deploy machine learning (ML) models quickly. SageMaker removes the heavy lifting from each step of the machine learning process to make it easier to develop high quality models.

AWS AppSync

AWS AppSync is a fully managed service that makes it easy to develop GraphQL APIs by handling the heavy lifting of securely connecting to data sources like AWS DynamoDB, Lambda, and more. Once deployed, AWS AppSync automatically scales your GraphQL API execution engine up and down to meet API request volumes.

AWS Glue is a fully managed extract, transform, and load (ETL) service that makes it easy for customers to prepare and load their data for analytics.

Explore BMW Group's journey of innovation using AWS

Learn more »

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Ending Support for Internet Explorer

Shortlisted 2017

Lead agency, contributing company, bloomberg media, the challenge.

2016 has been a landmark year for the BMW Group as it celebrated its 100 year anniversary. Home to BMW, Rolls Royce, MINI and BMW Motorrad, the group wanted to celebrate its unique heritage and also underline its position as an industry pioneer. After decades of small iterations, a revolution is coming to the automotive sector. A perfect storm of technological and digital developments, coupled with alternative building materials and new energy solutions, means sweeping changes are coming. From autonomous driving to car sharing, and 3D printing to electric vehicles and virtual reality test drives; the road ahead is new and BMW Group wants to, once again, be leading from the front. BMW Group partnered with Bloomberg Medi, Vizeum and Ketchum, to talk directly to the world’s high net worth individuals, leading businesses and tech innovators, the ultimate goal of this ‘anniversary’ campaign was to position BMW as the leader or forerunner for the upcoming changes and challenges in (smart) mobility. BMW Group wanted to reassert its well-earned role as an industry leader in this increasingly competitive landscape. Its Centenary celebrations provided a perfect platform upon which to convey these changes to a wider audience. While the tentative exploits of new comers like Tesla, Apple and Google have dominated the headlines, BMW Group is already well underway with disrupting itself. It not only had ideas and new partnerships underway, but 2016 saw the launch of its VISION vehicles – concept vehicles that were sure to demand attention. BMW Group wanted to fully leverage these vehicles, and its access to visionary designers and engineers, to create future-facing stories that would translated emotionally. It was important to the company that the campaign did not look or feel like traditional advertising, with stories told with a distinct editorial voice, informative without being too formal.

The Strategy

By using Bloomberg Media’s multimedia portfolio, BMW Group was able to highlight the seismic changes that are coming to the automotive sector and position itself as a thought leader and true pioneer. Bloomberg Media could take the core values of the BMW Group and bring them to life at the time and place they are most relevant to the audience by seamlessly aligning them with the key Bloomberg editorial themes of the year. BMW Group wanted to reassert its position as an innovative leader among the world’s business communities by engaging mid-to-high level executives, high net worth individuals, leaders and owners. The German group also wanted to reach potential corporate collaborators in the technology sector and beyond. It was important individual assets of the campaign were able to appeal to anyone interested in the new direction of travel in the automotive sector while still engaging current users of BMW, MINI, Rolls-Royce and BMW Motorbikes. The Beyond100 campaign had to appeal to a large, diverse group – spanning males and females, aged 20-70, united only by their inquisitiveness and the fact they were on the move. BMW Group wanted to reassert its well-earned role as an industry leader in this increasingly competitive landscape. Its Centenary celebrations provided a perfect platform upon which to convey these changes to a wider audience. While the tentative exploits of new comers like Tesla, Apple and Google have dominated the headlines, BMW Group is already well underway with disrupting itself.

BMW Group wanted to fully leverage these vehicles, and its access to visionary designers and engineers, to create future-facing stories that would translated emotionally.

It was important to the company that the campaign did not look or feel like traditional advertising, with stories told with a distinct editorial voice, informative without being too formal. Beyond100 produced 100 Q&As, including 39 interviews, 17 interactive infographics, 15 videos, and 7 magazine spreads.

BusinessWeek advertorials detailed BMW Group’s ambition to move away from automotive manufacturing towards a leading provider of mobility services. Interactive features explored the wider context by looking at how cities might develop, how roads could change, and the ever closer relationship digital connectivity will bring to people, vehicles and services. Bloomberg data helped fuel projections and commentary around electric batteries and wireless power while interviews with BMW Group’s own management team provided context and detail behind the company’s more revolutionary ideas

The Implementation

The result was #Beyond100. The future-focused multimedia series created over nine months includes videos, features and infographics that explore many of the foundations upon which the next mobility will be built. 100 Q&As to tap into the pioneering spirit, design and engineering behind its ongoing mission to help shape tomorrows world. From engaging print articles to shareable, actionable digital content, a series over the course of the year mirroring and accentuating the 2016 BMW Group celebrations, to amplify the BMW’s Group’s uncompromising focus on premium and use Bloomberg’s platform’s to give influential audiences a taste of the world that BMW Group hopes to help shape over the next 100 years. Beyond 100 will be an opportunity to celebrate BMW Group’s multidimensional vision for tomorrow’s world. Running across BMW Group’s pivotal 100th anniversary year, we will systematically take a journey through a total of 100 key questions that will shape this iconic, inspirational group over the 100 years. These 100 questions will help audiences understand the common themes, ambitions, challenges and obsessions of the Group and its brands, and give a taste of the answers BMW Group hope to find as told by the brand’s ambassadors, employees, research , customers, partners and retailers. Bloomberg’s inhouse creative team, Kinection, drew upon BMW Group’s latest launches and projects, interviewed its leaders in design and engineering, and talked to industry experts and specialists in related fields. This was all supplemented with data and trends from Bloomberg’s own global analytics teams in Bloomberg Intelligence and Bloomberg New Energy Finance.

BMW Group’s goal was to highlight its leadership in innovation and design, and its ability to embrace new technology. Underlying all of its activities was the importance of placing the customer at the heart of its future ambitions. While the #Beyond100 was a branding campaign, it also resonated throughout the marketing funnel, with one research focus group unearthing the most direct of responses: “Visiting Bloomberg’s pages for BMW inspired me to do more research. This, in turn, resulted in my deciding to buy a BMW. I am now a happy owner of my first BMW.” Together, the partnership has reasserted BMW Group’s leadership credentials, explored the future of mobility, generated debate, smashed engagement and brand perception targets and helped set new benchmarks for success.

Bloomberg conducted consumer research in January among 525 people in the US and 4 key European Markets with current Bloomberg consumers who owned a car and/or Motorbike. Brand Perceptions: 3 of 4 • 25% positive increase among those completely agreeing that the BMW Group is at the forefront of engineering • 41% positive increase among those completely agreeing that the BMW Group is helping shape tomorrow’s world. The website content out performs benchmarks across a number of key statements: • The content out performed advertising content benchmarks, exceeding the top 20% scores across a number of key dimensions. • The custom content was highly relevant to the target audience, exceeding the top 20% benchmark for personal relevance by 14% It received more than 73,000 page views, 19,000+Video Plays, Average Dwell Time: 2 minutes 16 seconds and 32% Average CTR. Organic tweets; @BBGMedia • Over 100+ tweets sent over the course of the campaign • 96k impressions • 1,405 interactions Page performances (organic shares on all pages) • 30,018,814 total audience

• Tags 2017 , Automotive , BEYOND 100 , BLOOMBERG MEDIA , BMW , case study , Shortlisted

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Home » Human Resource Management » Case Study: Human Resource Management at BMW

Case Study: Human Resource Management at BMW

BMW (Bayerische Motoren Werke  in German, or  Bavarian Motor Works  in English) is basically a German company with vast experience in the field of cars and was introduced in 1916. This company spends more money on its human inputs to add value and also its complex contribution of human resources creates its competitive advantage . BMW’s specialized staff which are able to offer superior quality of product and services in the market with the customer experience. Human resources plays important role in the BMW even in the time of recession as they have invest on the human inputs. But this depends on the financial condition and capabilities of the market as they had invested in training development and recruitment of the new management teams in their organisation. Earlier BMW was not giving importance to its customer services and its staff only focusing on its products and places for its expansion but later on they realize that human resources and their management is important for success in the market and competition. In BMW the goal of human resources is to change and improve their markets by using the new methods of production and materials and organise them into the excellent way of customer servicing. As always in BMW the goal of human resource management is to add more value and improve the ratio of cost in the added value of its car products. The main goal of HRM in BMW is to make people more productive and creative for the long term standing with them and when the management staff will be more productive then the jobs get more skilled. In recession also this company had constantly invested in the human resources and its development.

Human Resource Strategies in BMW Group

BMW is company which carries out very well planned strategies in its organisation. In this organisation the human resource strategy is applying to the whole organisation and BMW is improving its products and making a proper customer satisfaction by applying this strategy. This strategy is plays a very vital role in the BMW organisation and its employees. It helps them to innovate and create new products and services to their customers and making its products available and delivered in all areas where they are expanding their activities. Earlier BMW was making their products wrongly and not understanding the capabilities and needs of its customers as they were not giving importance to its human resources so after sometime they realize the exact meaning and importance of its resources so now they can focus more on markets and its customers. BMW is now making its organisation and its employees flexible so that they can change according to the technology and the needs of its customers in the market. Human resource strategies help them to take the proper care of people issue for the long term by providing best quality products and services, making long term commitments and needs for the future. The aim of BMW in this strategy is not to give them low cost products. Their main aim is to provide the high capable workforce and making its products unique in the competitive market. BMW is concerned with its managers and the staff to make them more innovative and developing their skills so that they can achieve a high task goals and objectives.

The following are the Human resource strategies of BMW:

• Recruitment and Selection: The selection of the candidates is the first task and strategy of BMW. This is the most important element of the BMW’s human resource management. In this they have to select the candidate who can match up the requirements of the job role. This includes the person who can identify the market conditions, attract customers to sell their products. The first process in this process is to analyse the role and then they develop the person’s specification of that job satisfaction and then he going to identify the market condition to attract customers and then screening of applications. In screening of applications they short list the selected candidate whether to select or reject. After this they conduct interviews, assessments and tests of the candidate to decide select or reject. When candidate pass this interview then they check the references in the resume of the candidate and after above all they offer the person to work in the organisation. BMW is following a very good selection technique with their clear specifications and procedures in a long term. They judge the candidate according to the suitability of the role which provides them necessary benefits. Suitability of the role in the job includes the knowledge, skills, experience and personal attributes of the person which help him to perform according to the specifications of the job. All this process of selection and recruitment is properly planned in an organised way considering their future needs. Attracting the customers which is a part of selection process plays an important role as it does not include selling their products but also includes advertising the brand BMW in the newspapers, magazines, internet, television etc. and making awareness of the luxurious comforts and safety of the products of BMW. It includes the heavy expenditure in advertising the brand but they need to be more careful in spending on advertising anyways this strategy for marketing their employment.
• Screening: In this step of recruitment and selection of BMW human resource management the candidate have to fill the application form which shows the subjective quality of the person for the role and also helps in improving the quality of the process and increase the consistency. In application form the person has to fill up his bio data and other questions which show the difference of higher and low level of performers.
• Interviewing: Interviewing person who had applied for the role is very important otherwise they can’t judge the mental and physical capabilities of the candidate. This process is conducted by the line managers of the BMW. In this interview they have long discussions, questions about the previous experience, favorites. This is the most commonly used technique in every multinational organisation which helps the interviewer to make a judgement about the candidate specialization for the job. They can judge whether the person can satisfy the job or not? The questions in this interview are properly listed to get specific information about a standard of judgement or criticism and the candidate get a score against the answers he had provided in this interview.
• Testing: Another process followed by the BMW human resource department is testing the ability and personality of the candidate. In the ability test they test or measure the aptitudes like knowledge, vocabulary, typing speed, awareness about the products and accuracy of the candidate. On the other hand are the personality tests which show the personal characteristics, attitude, behavior and values of the candidate. In this they also test the individual beliefs and the capability that how they deal with problems in selling the products or their convincing and marketing power in the organisation. In this process of testing the candidates in BMW the ability tests are more consistent and free from errors than the personality tests.
• Checking References: After testing the candidate then the manager or the interviewer has to check the references of the educational qualifications, eligibility, work experience, licences and the special check on the criminal records and health problems. After checking the references they give the offer letter whether it conditional or unconditional.

Training and Development

Once candidate pass the above steps of recruitment and selection then he has to undergo from the training of the role offers to him. This training process is essential to improve the performance of the job which helps to develop their personal and professional characteristics of candidate. This training involves coaching and development of the professional skills which are more efficient and effective in learning and development of the individuals. The different types of training are informal training, on the job or off the job training , product and skills training, behavioral development and technical training. They give the training to their employees for how to develop different styles of learning, materials, design of the products, and also look after their personality types. In this training also involves use of heavy and expensive equipment and machines and provide stipend in between their training. This training on machines and equipment improves their performance of the job. BMW teach their employees the easy and small steps first and cover their health and security issues and make their employees proud to be a part of this organisation. In this training the line managers face the major challenges to develop the confidence, personality and skills to solve and find the solutions to the problems in the organisation. Managers want their trainees to be creative, innovative, productive and sufficient to operate at tactical and strategic level in the company. They trained them to seek the responsibilities of the task given to them and never be step back in any problems. After the trainee complete the process of his training and development of the specific role given to him then the line managers give them a pat on their back and recognise them for their successful completion so that they motivate in performing their tasks well on the job.

Performance Management

In BMW the performance of the managers and staff is initially important to achieve the goals and objectives of the organisation. Performance management is the essential and organised process that carries the success and helps in developing the capabilities and performance of the individual or work team. The strategy of human resource management is to develop the managers or leaders in the organisation who can help their employees or subordinates to make their performance effective and efficient. The managers are the only ones who can manage the performance of the workers by understanding and knowing what the employees expect from them and engage them in each and every activity and ask them for feedback which can improve their quality of performance in the organisation. The BWM human resource management is working more on this performance by enhancing them to learn their goals and objectives and they recognise that there is a greater need for the management to apply these performance tools in the company through which they can develop their reviews, skills and framework. In this management the employees are sharing their views and ideas with their leaders and managers so that they can find better ways measuring and improving the performance . The performance management of the BMW shows that how BMW is working its functions effectively in the environment. The performance of this company shows how they are executing their plans, goals, objectives and what will be the outcome of their performance? The purpose of the BMW management team is to achieve the better results by managing the performance and maintain the standards of performance of their work team. The main goal of the line managers is to create or develop a relationship or culture between them and their workforce to seek the responsibility for the consistent improvement in the performance and skills of their business procedures and processes. There are certain principles which BMW follows in performance management i.e. line manager transfer their corporate goals in into their human resource department at individual and group level, clarifying the goals to their workers, understanding and sharing the problems and finding solution to improve the performance, continuous feedback, encourage their subordinates for open and honest communication, mutual respect and transparency between them. These all basic principles implemented properly by this company HR team and it surely helps them in improving their performance management. In this we can conclude that performance management is to support by the managers to their workforce to improve their performance, skills, knowledge and experience while doing their job.

Employee Relations

In modern times relation with employees is essentially important and as a part of human resource strategy. Involvement and participation of both employee and managers in the organisation shows how strong is the relation between them and the difficulty of maintaining this relation for long time. In BMW the managers are constantly involving with their employees in several practices which directly improve their relations and performance in the organisation. The main task of managers is to maintain the employee relations so they can generate more commitments for their work and contribute to their operation effectively. The manager of the BMW focuses mainly on the engagements and commitments of their workers to maintain their employee relations. There are many benefits which BMW provides to its employees when they join the company like medical insurances, annual bonuses, dental and vision insurance, holiday pay, vacation pay, life term insurances which include accidental and death insurance, medical expenses, disability insurance according to long and short term which will be fully paid, personal day pay, sick leave, free education training and development. These all benefits which BMW provides to its employees play a crucial role in maintaining the relation with employees. These benefits also help the organisation to improve the performance and contribution of employees in the production of work. The chief executives of BMW are rising the salary and bonuses of their staff twice to the workers working in other companies. BMW is the only major and first company who had make the bonuses of assembly workers same as of the top managers in the organisation. BMW is showing a great contribution to improve the relations with the employees so that they work with dedication and hard work which increases the sales and production of the company. The spokesman of BMW in his interview said that they are creating transparent and regular relations with their employees so that there should be no gap between the managers and workers. They are giving bonuses to the superiors and subordinates depend on the company’s profit, sales and performance of each employee. BMW is also sharing profits with their line and top managers which is good in business to deal at the time of recession. During the time of recession the profit sharing motivates and encourages worker which is a good way for the BMW to make their workers employed.

There are certain factors which BMW has adopted to improve its relation with employees:

• Downward communication: The first factor that maintains the employee relation is the downward communication from managers to its subordinates. In this the managers should educate and trained their staff towards their role in the organisation which shows leadership in which employee has to follow his manager for executing the tasks and responsibilities.
• Upward problem solving and finding solution: Another factor for improving the relations is not only from managers to subordinates. It also from subordinates to its superiors in which the subordinates participate in the decision making process and support its managers in solving the problems by creating new ideas, opinions and find solution instantly. This motivates them to maintain cooperative relations by different suggestions, schemes and surveys etc.
• Task Participation:  Another category of improving the relations of employees with their managers is the participation and involvement of both of them in task or responsibility given to them. This also involves the job redesign in which they have to extend the task undertaken in work. This task participation involves financial, consultation and representative participation and involvement. Manager and employee are expected to play an important role in the development and maintenance of the tasks in the job. They need to follow the new techniques and strategies to complete and achieve their goals, objectives and tasks of the organisation and share the commitment between them.

Personal Management

Another important strategy of human resource management in BMW is the personal management. BMW HRM staff is managing the employees in achieving the goals and objectives. In this personal management system the managers manages the education, qualification, training and experience of the employees. This is the process of directing the employees in achieving the long term and short term goals make them flexible enough to deal with any changes in the situation with intelligence and open frame of mind. Personal management in BMW includes the following;

• Team Building: Team building also an important task in personal management system in the organisation. The managers have to build the teams according to the experience and qualification of the workforce. The manager has to maintain the understanding between the team and give them edge in the corporate staff.
• Effective Meetings:  Effective meeting means that the managers have to conduct the interview for the staff and the committee in which they have to focuses on the agenda of meetings, goals and objectives to achieve to be planned and prepared. Discussions and participation’s of the right people involved in these meetings. While arranging these meetings the personal management has to decide the time, place and venue of conducting these meetings.
• Time management:  The time management is the most essential point of the personal management. They have to manage the time to prepare and plan to complete their tasks and responsibilities to achieve the goals of the organisations. They have to maintain a balance between their personal and professional lives.
• Decision Making:   Decision making in the management helps to solve the problems to reach their goals and objectives and provide them alternatives for executing their plans. In this managers gives right to their subordinates to participate in decision making process and support their superiors which helps in maintaining the understanding and cooperation between them.

Related Posts:

• Human Resource Information Systems (HRIS)
• Comprehensive Human Resource Strategy
• Significance of Human Resources in International Business Arena
• Perceptions of the Human Resource among Top Management
• Efficient Use of Human Resources
• Challenges of Strategic Human Resource Management
• Key Factors that Contribute to Organizational Performance
• Managing International HR Activities
• Responsibilities of International Human Resource Management (IHRM)
• Internal and External Factors Influencing Recruitment

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• LeSS Case Studies

LeSS adoption at a bavarian car manufacturer

Valtech Germany was the selected supplier to help applying agile development to create the new BMW i car direct-sales process of the BMW Group. This required new supporting IT systems, all embedded into an existing IT landscape with more than 80 affected systems. There was a large program spanning many projects to create new supporting systems.

One of these projects was the new Unified Sales Platform (USP) system. USP was implemented from scratch and has integrated more than 30 external system interfaces. Other partner projects for the BMW i rollout remained in their non-agile process models. Therefore common milestones, reporting and collaboration across the projects became a challenge.

After developing for more than 2 years, USP was released in time, with high customer (BeNeLux market) satisfaction and high quality.

Phase 1: Before Multiple Feature Teams

In February 2012 USP development started in a challenging environment:

• high time pressure, because of the already defined launch target date
• the direct sales business process was still under discussion; not defined
• therefore the scope of the USP product was pretty unclear
• the majority of participants were not familiar with BMW Group business/sales processes or agile methodologies
• the USP project was embedded into a traditional program management system (the BMW i program)

Because of the mentioned circumstances the USP project decided to use Scrum and agile engineering practices to get early and continuous feedback about the product progress and the organizational progress. Development started first with one Scrum initial team to create a solid basis by finding and establishing the appropriate agile development process, development infrastructure and collaboration models with the business departments.

This initial team evaluated the tools they needed, set up the development environment and the continuous integration system, experimented with different Sprint lengths, and implemented the first business functionality to verify that the new organization could work.

Since the first Sprint the USP team demonstrated running and tested software after every Sprint.

Over time additional people were added, organized in traditional functional and component-team structures, reflecting the standard model used in the broader BMW i program.

This organization was used up to a USP Release 1.0.

Phase 2: Transition to Multiple Feature Teams & LeSS

The structure for Release 1.0 was adequate, but it was predicted (by us coaches) that it wouldn’t scale well for the next (and bigger) release. There was a need to be more flexible (agile) in the teams because priorities and requirements changed frequently. Different teams needed to be able to select various items from the Product Backlog, and be able to do complete end-to-end features. And there was a desire to reduce total feature cycle time from “time to market”.

In the prior organization, a team could only do one specialized functional or component kind of work. That constrained the ability to change Product Backlog priorities and flexibly “go to where the new work is.” And it lengthened average cycle time with handoff and delay between specialist groups. Plus it increased the coordination and integration effort and problems.

Therefore, in response to our suggestion, it was agreed to reorganize into multiple feature teams, working together in a LeSS adoption.

The goal was to create five new cross-component and cross-functional feature teams.

Due to existing commercial contracts and program-wide policies, the USP project group could not completely be reorganized into just feature teams. For example, there was a UI design governance group for UI consistency across the entire program. And there was a test-management group that coordinated program-wide test activities with other partner projects and provided reports to the overall program. This group did not do testing; that was still done by the implementing teams themselves. But the test-management group contributed to the “undone” department as well, such as organizing penetration (security vulnerability) tests by external companies. Plus, program policy required a project management group, that did reporting up to the (traditional) program management, and staffing, facilities, and equipment management.

Self-Designing Feature Team Workshop

It was also agreed to reorganize into feature teams with a self-designing team workshop , one of the LeSS experiments.

It took the group 3 cycles (each 20 minutes) to come up with an organization matching the vision: all feature teams should be able to work independently on all Product Backlog items across all stakeholders/requestors.

After forming the new teams, they created their new team name, found their team room, elected their Scrum Master and a “lead” developer (still a required role due to policy).

The whole self-designing team workshop lasted about three and a half hours. Details about the self-designing team workshop can be found here

Team-Building Workshops

A self-designing team workshop is a great start. But at the end of the self-designing team workshop there are new formed teams and they have to cope with new dynamics. This transition to feature teams, according to LeSS, was a serious change of the old system. The project group faced two aspects of scaling. At first, cross-team collaboration, working with all teams following the priorities of the one Product Backlog. This was covered and organized by our Sprint ceremonies and synchronized meetings in the LeSS context. The second aspect was related to the available knowledge within the teams. All teams got team members with knowledge of different components. But they represented a kind of bottleneck within the team and therefore this situation was an impediment for scaling. To improve on a systemic level it was needed to improve the knowledge sharing within the team. In addition it was an aim of the project management team to get these new teams as soon as possible effective again. Therefore the project management offered each team the opportunity to do an additional moderated team-building workshop. The purpose of this workshop was to lower social barriers, initiate measures for knowledge sharing, finding working agreements and reflection of team dynamics in a team challenge.

Workshop agenda:

The workshop took about three hours, followed by a lunch or a dinner. Some of the agenda topics are described in the following paragraphs.

“Team-Knowledge-Model” and “Agree on measures”

In this workshop the team members used the Team-Knowledge-Model (TKM) to visualize the knowledge distribution across the team members.

The teams did the Team-Knowledge-Model on a business and on a technical skill level.

In a TKM model all team members show their balance between skill-level (X-axes) and daily challenges (Y-axes) according to the project related knowledge domains. These axes are split into three areas: low, medium and high. Low means in terms of the challenges the team member has no or very simple tasks to do in that specific knowledge area. High challenges indicate that the team member works on high sophisticated tasks. Low, medium and high at the skill level could be understood and/or replaced by the experience level of Shu, Ha and Rhi as mentioned in LeSS.

The example above shows two X’s related to the “TEST FACHLICH” domain. One team member indicates, that her/his knowledge is sufficient for their daily work (currently learning by doing). Another team member has quite good knowledge about this domain but doesn’t work on that domain (that’s somehow waste of expert knowledge). If these two team members pair for tasks in that domain, both can benefit and return very fast into the flow area.

Furthermore the model shows that the team has got nearly all the needed knowledge within the team except the brown-colored domain. In this domain the team needs some help from other teams to increase the team knowledge quite fast. Click here to learn more about the Team-Knowledge-Model

After visualizing the knowledge distribution in a TKM, the teams defined based on these models appropriate measures to improve the knowledge distribution within the team e.g., by defining pairs to work on specific topics, organizing team coding dojos, etc. Some raised afterwards the need of cross-team knowledge sharing and initiated therefore Communities of Practices.

By this model the teams could get feedback whether the they have the right knowledge for their work on the Product Backlog or if they have some knowledge gaps. Based on this visualization each team defined and agreed measures to improve, e.g. who will do pair-programming, organize coding or testing Dojos, other training sessions, pair-working, reading books and sharing afterwards… These teams became aware of being self-responsible for individual and team learning as part of continuous improvement.

“Team Vision/Charter”

The team vision or team charter can help the team to focus on the same direction. So during this activity they created a vision e.g. “We are open minded, willing to improve and support each other.” or a team charter, where some teams defined rules like do’s and don’ts or defined other working agreements like: “We do pair-programming at least once a day”, “We keep our regression tests green”.

“Team challenge (outdoor)”

With the outdoor team challenge the team got the possibility to reflect on how they work together. How the team communication works, or how they act under time pressure. There were several iterations possible if a team didn’t succeed within the given time. This is a default procedure and is intended so that the team can reflect on their approach. Then they started another round. Some took three rounds others, while others succeeded in two. After the challenge, they all got a common understanding, that they succeed by good communication, inspect and adapt and involving all team members.

After the workshop the teams went for a sponsored lunch or dinner as they prefered. There the team members shared their insights and experiences about the workshop and deepened their understanding of their team dynamics.

One Product Backlog

As required in LeSS (because it supports whole-product focus, transparency, and simplicity), there was just one Product Backlog, worked on by all the feature teams. And after the transition to feature teams that could do end-to-end customer features (rather than component teams and single-function teams), each item in the Product Backlog represented a complete end-to-end customer feature.

To satisfy traditional project reporting of the overall program, we created an automated reporting solution that extracted data from the one Product Backlog, and presented it in a way familiar to the traditional “waterfall” program management group.

Product Ownership & the Design Governance Group

Complementing the one Product Backlog, in LeSS there is only one Product Owner prioritizing it, so that there is a strong and cohesive vision from someone with a strong sense of product ownership. In contrast, there is a default policy that the BMW Group does content, scoping and prioritizing decisions in a governing board. Many stakeholders across different business departments have to be included, if decisions will be taken. Therefore, a BMW Group project has a “design governance” group. This group does the prioritization work as team. This is of course not the same as the standard LeSS framework, but was the art of the possible, and such organizational compromises are especially common when a new way of working is introduced by an outside group (e.g., Valtech DE) rather than internally.

The ordering of the Product Backlog was done in conversation with all stakeholders. The following criteria influenced the order:

• Legal aspects
• Stakeholder target dates/milestones
• Expected value
• Possible risk reduction
• Remaining project budget per stakeholder

Related to the LeSS principle “Whole Product Focus”, once a Sprint (biweekly) the group did an overall Product Backlog refinement workshop with delegates from feature- and cross-cutting teams.

The design governance group organized the interaction between the different business departments (Subject Matter Experts) and the feature teams. Together with the feature teams they made sure that conflicts of concurrent requirements were solved before the according backlog Items were taken into a Sprint. Design governance group members also organized and participated at the feature team Product Backlog Refinement workshops.

Our Sprint Ceremonies in LeSS

In phase one the USP project started nearly on a green field. The system was build from scratch. The business department, responsible for the new BMW i sales process got just a system proposal, created in a traditional way. Therefore it was reasonable to break down this system proposal into backlog Items, in our case we wrote user stories with acceptance criteria. This was done on a very high level at the beginning of the project. Over time the teams refined these items according to their priority together with the subject matter experts from the business departments. There was a 1:1 relationship between business department/subject matter expert and a team. Coordination of functional aspects was done at governance group and business department level. Technical aspects were coordinated between the teams in a Product Backlog Refinement meeting in the mid of the Sprint as preview of the following Sprint and in a synchronization meeting at the end of Sprint Planning 1. In both meeting delegates from all teams participated.

The project agreed on following “Definition of Ready” (DoR) valid for all teams:

• Technically feasible
• UI mockups designed
• Acceptance criteria available
• Product Owner agreed
• Security, roles and rights defined

The governance group prioritized only Items matching the DoR for the next Sprint. The teams prepared a maximum amount Items for the next one and a half to two Sprints, according to the group’s velocity.

In phase two of USP, after transforming to feature teams the procedure of refinement changed. Now the project had to cope with requirements from different stakeholders, sometimes conflicting with other requirements or existing functionality. User stories as exclusive items were not sufficient anymore. The gap between the desired functionality from a stakeholder and existing functionality had to be expressed. Therefore the project group introduced the term topic, which described the difference between desired and existing functionality. At this level possible conflicts between requirements of stakeholders were solved. The design governance group was responsible for the topic level. They solved upcoming conflicts with the different business departments before they defined conflict free and roughly refined items. Together with the feature teams they did the further refinement of the items, which were handled as was used to be in phase one.

Scaling our Coordination & Integration Techniques

In LeSS, it is recognized that really strong continuous integration practices are critical for scaling success, so much so that it is one of the guides within the “technical excellence” section of LeSS. It enables coordination, internal open source, increased transparency, and whole-product focus. Thus, the USP group invested in improving the developer behaviors of integrating continuously , and also a powerful continuous integration (CI) system and related processes.

The heart of the CI system is the master-build concept. Every artifact (e.g., JAR files, configuration data, tests, etc.) needed for deployment or verification are bundled with a master-build number. All results (e.g. build artifacts, test results, logs and traces) of this system are stored with reference to it’s related master-build number in a central repository.

The CI system executes in 3 steps, by 3 major components:

• Compile and build the executables.
• Deploy and test, which deploys master-builds on target systems, executes end to end tests, and stores the according results, logs and traces in the central repository.
• Report on the results, creating a master-build history table, which shows the master-build numbers and all corresponding results. And then email interested people with a link to the reports.

The technical view on this concept shows that it is highly scalable and it doesn’t matter if developers work onsite, offsite or even offshore.

Each system build, created every 15 minutes, was tagged with a dedicated ordered version number. The latest successful (non-failing unit and module tests) system build was deployed on a target-similar environment.

Afterwards the end-to-end tests on smoke level were executed. The smoke level describes a subset of the automated regression tests reflecting the most important test scenarios to get fast feedback for developers on integration level. The test results were connected to the master-build number and documented in the master-build history table.

Only master-builds with successful smoke test run results were taken into the next stage. The next stage was the automated regression runs. As part of the “Definition of Done” the teams implemented the acceptance criteria of an Item into an automated regression test (“executable requirements”). All available regression tests were executed in this stage. In parallel some quality runs, such as Sonar runs or performance measuring were executed as well. These results were documented in the build history table of the corresponding master-build.

All tests were tagged with a reference to the related Product Backlog item and therefore to the functional structure of the USP areas. So it was possible to see in which functional area of the product a problem exists and which was fine.

By clicking through the areas all group members were able to drill down to the problematic item and could analyze the problem from a functional perspective i.e. which acceptance criteria was broken. Of course at the lowest level (not shown) the connection to the technical/code level was provided e.g. expected amount of list entries was <2> and received <0>, or exceptions details….

So everyone could immediately get an overview about the current functional quality of a dedicated master-build.

Feedback Cycles

Especially in large-scale development in LeSS, short CI system feedback cycles are critical because it is not possible for everyone to be talking together all the time, so the CI system needs to become a signalling tool that tells the group quickly when there are problems. Then people can figure out who to talk with to coordinate on solving the problem. In this way, a CI system with fast feedback becomes a tool for coordination.

Calculated from the check-in the continuous integration team was able to keep the fast feedback cycle time for smoke runs between one and one and a half hour. Regression results were available two to three times a day, approximately duration of three to five hours

By a growing functionality of the system the amount of tests increases as well. To keep the cycle times low it’s necessary to parallelize the test runs. This requires more virtual servers and of course more hardware, too. A master-build was deployed on several servers. Tests were split into functional areas according to their tagging (e.g., “finance tests”) and executed on different servers at the same time. Afterwards the test results were merged to a single report.

Structural Aspects

In addition to the environments for automated testing, there were two environments fully integrated with all other relevant BMW Group IT systems for manual testing. Acceptance of item, as required by the “Definition of Done” (DoD), was only possible on these two systems. Also, each feature team got their own test environment for internal exploratory testing. They were able to add new functionality on these test servers and run the test automation against it. Benefit: fast integration feedback before check-in. All these servers were deployed according to the BMW Group staging process via a central Jenkins server.

All other stakeholder could see the displayed master-build number and look in the build history table the functional quality of the current installed software very easily. Green smoke and regression runs were conditions of the overall DoD. Therefore everyone could verify if an implementation had side effects on existing functionality.

Coordination on Failed Builds

The CI system sent out an email with a functional result overview to people after each build/test run. This email contained additionally links to the functional and technical build details provided by the CI system. A so-called “regression daily”, short stand up meeting with delegates from each team was used to coordinate the activities in case the regression run overnight failed.

System Integration

The BMW i program planned an overall six month system integration test phase. There was a fixed code freeze for all related projects announced. Because the USP project was able to deliver high quality software, the BMW i program requested more features and changes as last minute wishes of the markets. So they skipped the code freeze for the USP project. Until two weeks before technical “Go Live” the USP delivered new functionality every week (still having bi weekly Sprints) into the overall system integration environment. During this period the overall test management, incl. test units in the markets found 95% less defects than in one other comparable BMW Group project. And one-third of those small number of defects were not related to the USP functionality. No critical issues related to USP functionality, which blocked the business and / or couldn’t be solved within very short time periods were discovered in the first five weeks after the “Business Go-Live”.

So the automated test and integration practices of this group strongly contributed to the overall success.

In our coaching of USP we followed the LeSS principles. Very important was the “whole product focus” so we integrated all relevant partner systems in the own development process. As part of the “Definition of Done”, the project defined and executed integration tests of the overall program BMW i from the beginning. Together with the functional test automation, it was a major contribution to the successful launch in autumn 2014. According to my experience with comparable projects the USP project reached an outstanding quality.

Furthermore the project’s transparency and customer centric (LeSS principles) approach, by showing them (as per LeSS) running software every common-to-all-teams single Sprint and on demand throughout the project and adjusting the Product Backlog according to the customers feedback, ensured the high customer satisfaction.

Through empirical process control the project was able to provide realistic, fact-based, concrete-running-features progress forecasts (versus the illusion of “Gantt chart progress”), improving predictability and reliability. The high quality created trust by the overall program and traditional test management, customer and partner system. While other partner systems had to stick to their traditional integration test phase, the USP project was allowed and able to deliver new features (“late” changes) until two weeks before technical GoLive!

LeSS and agile principles provided an excellent guidance throughout the project and they were in many cases the basis for critical project decisions.

BMW’s CRM: Case Study

Bmw’s crm: introduction.

The purpose of this research paper is to analyze the impact of Customer Relationship Management (CRM) on BMW, as CRM is one of most effective strategic tools to change the consumer behaviour.

This paper concentrates on the number of issues like conceptual framework of CRM, the adoption of CRM framework, CRM in the automobile industry, methodological framework, customer database, the effectiveness of CRM strategy on this company, the position of BMW, and so on.

Background of the Problem

The Sky News (1) reported that the luxury carmaker BMW has shocked with an 8% of its profit fall due to global financial crisis in 2008, and the company has aimed to overcome the situation by increasing sales, cutting its cost and reducing its staff within 2012.

With such a strategic alignment, it is suspicious whether the CRM practice of BMW would be collapsed or cut its existing standard. Under such a background problem, the aim of this research paper is to provide a clear overview of CRM about BMW to identify the best customers and their choice in order to offer best service to retain the loyalty of customers by maximising current and lifetime value of customers.

BMW’s CRM Strategy: Literature Review

This literature review has been organised with following sub-chapters based on prominent authors and outstanding researches by most famous theoreticians of concurrent CRM study-

Conceptual Framework of CRM

Thompson, A. et al. (223) pointed out that the applicable definition of CRM has generated as a procedure of maximising customer’s values by means of concurrent marketing activities, integrating proper management of customer’s knowledge and information and maintaining long-term relation with them.

Starting from nineties, the corporate world has been keeping more emphasis on CRM as a fundamental component of Enterprise Resource Planning and the corporate houses taken huge imitative to standardise and categorise the informational resources with large investment with the aim to enable the corporate firms to prop up CRM as well as e-commerce to generate sustainable growth.

The Adoption Framework of CRM

Stoner et al (87) added that, there are four obligatory elements, which are essential for triumphant implementation of CRM and the four tools has driven from the theoretical framework of CRM implementation and these are demonstrated in the figure below-

Figure-1: Framework of CRM

Source: Stoner et al (87)

These four essential elements to successfully putting into practice of CRM at any organisation are concerned with – relationship marketing, apposite organisational structure, control of data warehousing and data consumption for customer management, and the four elements generate the framework of CRM necessary for any organisation that intend to implement.

The basic principal of CRM has put down on the philosophy of relationship marketing while the succeeding feature of CRM adoption has concerned with suitable organisational structure along with data warehousing is the third significant feature to the centre of attention on to effective formation of a triumphant CRM accomplishment and next to lay emphasis on data utilisation.

Limitation of CRM Implementation

Robbins and Coulter (214) addressed that the join up of the above four rudiments of CRM implementation should support the organisations to get better outcomes in their marking drives as well as business operations though there are a number of obstacles to introducing a CRM system for a particular organisation.

Nevertheless, the most awful limitations may include as lack of skills, malfunction to appreciate the benefits, insufficient investment, underprivileged quality of data, and poor evaluation structure where the skills for data shortage by using the new system is the most significant dilemma of CRM implementation

CRM in Automobile Industry

IBM Business Consulting Services (8) explained that the CRM of automobile industry has turned just into a slogan in the rather than appropriate integration and evidenced that the sector has lacking with the understanding of the core values of CRM.

For automobile industry, CRM could be assessed as the organisational function aimed to get better customers focal point along with sensitivity and openness by analytically assembly and utilising customer’s appropriate data to creating value-add alternatives.

It is also observed that, among the auto manufacturers BMW and Volkswagen have previously put into practice of functions those are more than ever victorious in positive CRM concerns where the existing stepladders being occupied by the automobile CRM incorporated with optimising multi-channel features, supporting financial services, optimising dealers’ management along with combination of CRM with SCM 1 .

The contemporaneous automotive consumers are progressively hold greater information than ever about the market and have an extraordinary altitude of choice while customer loyalty has no more forward-looking approach in the automobile industry and thus the auto manufacturers and traders have to work hard to gain and retain customers in the competitive market position.

To interact with the tremendously high customer expectations in this ear, auto manufacturers, dealers, and traders are eager to provide efforts for CRM to ensure effectual marketing boosted sales and quality customer service.

BMW’s Customer Relationship Management: Research Methodology

The purpose of research methodology is to provide a brief description about process of report formation and this paper would follow Robert Yin’s case study approach to apply qualitative research approach with descriptive analysis.

However, Yin’s approach would assist to co-ordinate the knowledge with CRM theories because the discussion chapter analyzes the position of BMW Group considering both theoretical and practical perspective.

As the word limit and time is too short, this report will formulate only with secondary data sources due to availability of this sources with low cost and effort. In addition, these sources have already recognized by the publisher, therefore, this report will use several published management books of renowned authors, previous published research works on CRM issues, annual report 2010 of BMW Group, and so on.

BMW’s Customer Relationships: Discussion

To develop the product quality, service range and increase profits, BMW has been maintained CRM strategy since 1999.

Building a Customer Database

Building a customer database was the initial activities for this company to establish their relationship with the customers, and BMW has strong network with IT infrastructure, for instance, it uses the application of Siebel Systems to gather information about the customers.

At this point, BMW creates a full database of its customers after gathering the information about them to evaluate the customers’ demand and other issues. BMW is committed to follow data protecting acts as the company has corporate social responsibility and values to maintain privacy policy strictly.

BMW’s CRM Strategy in communicating with its customers

Customer satisfaction.

Most of the customers believed that after sales service of BMW was not that much satisfactory and few customers dissatisfied with BMW because the cars are user friendly and BMW would not like to provide prompt feedback (Finlay 1).

On the other hand, many the satisfied customers argued that they receive quick response from BMW about their problem and the company monitors their problem seriously and offered free service while they find appropriate.

However, one of the major problems of the company regarding efficient management of CRM is customers after buying the car want to share their problems of using the car with the company and BMW is not able to concentrate equally on all of the customers.

• The key reason of data analysis is to identify the different potential customers from different segment and BMW uses the modern concept of Life Time Customer Value (LCV) as the profit generated from each customer;
• However, Caly (1) stated that BMW also considers the sales volume and using the application system to calculate the customers how many times customer enter the site of the company for purchase and for other information.

Response to the Customer

BMW justified the claim that the response rates of BMW to the customers are not very good because dealers make the late though they quickly response in accordance with the customers’ demand.

Here it is important to mention that the customers buy BMW cars from the dealer point and the after-sale service also provided from the sales point; therefore, the customers contact with dealer to solve their problems and BMW gives the service through the dealer point.

Other Factors

There are many other factors reflecting on the CRM and the performance of the company, such as –

• The quality and design of the product is very significant from CRM point of view and BMW produces high quality premium car to attract the customers;
• BMW concentrates on the communication strategy, such as it sends massage to the existing customers regarding new product or services and all other issues and it has 24-hour call centre and web facilities to help the customers;
• BMW provides the opportunities to the customers to change or sale their old car to buy a new model from the company. However, it is also useful for those who do not have enough money to buy a new car and BMW offers new motor parts to the customer if necessary and it with less charge to the loyal customer of the company.

BMW’s position in terms of CRM compared to industry rivals

BMW has both direct and indirect competitors of different brands, such as, General Motor (GM), Mercedes-Benz, Daimler AG, Volkswagen Group, Honda, Toyota, Ford, Nissan, PSA Peugeot Citroen, Hyundai-Kia, Suzuki, Fiat, and Alfa Romeo etc. According to the annual report of GM Corporation (2009), all competitors have maintained CRM program in order to retain old customers and develop new customers for the company.

The market share of BMW Group and customer satisfaction rate are lower than that of competitors in the global market, which indicates that CRM performance of this company is inferior to the industry rivals. However, Buttle (28) stated that the relation with the customers reflected the sales volume share; so, profit trends and numbers of car sales indicate the success of CRM of the organization.

Number of car sales

According to the report of Shankar (1), Toyota Corporation was able to generate highest revenue in 2010 by selling the maximum number of car in global market.

In contrast, BMW was not in top ten automobiles though previous years it held sixth position in terms of car sales, which demonstrates the poor condition of CRM of the company as top ten companies produces similar cars and offers high quality products. The relationship of Volkswagen, Ford and Toyota with the customer is stronger than BMW and this company need to fill up this gap immediately to become market leader.

Figure 2: Numbers of car production

Source: Self generated

Figure 3: Market Share

Source: Bekker (1)

Profit level

According to the annual report 2010 of BMW, the company experienced economic problem in 2009 due to global financial crisis but it has generated about 60.5 billion euro as sales revenue and more that 5094 million euro. However, most of the automobiles faced crisis in 2008 and recovered the position gradually but it is not in top ten for losing 12.77% market share in 2009 though BMW was in sixth position in global market.

For promotional activities, BMW highlights customer service and commits to provide any regular feedback when the vehicle in BMW’s workshop or local service centre though the company failed to ensure this; thus, customers become anxious and think to go paid up workshops rather than the BMW’s free service.

On the other hand, this company is less responsive to the market especially in the year 2009 where customer face economic problem and cannot afford high cost luxurious cars, but it did not reset its pricing strategy and showed any interest to produce low cost cars.

CRM & BMW: Conclusion

Recommendations.

• BMW should develop a successful CRM program in order to increase sales revenue from new products and to protect the company from making unnecessary costs and decreasing its investment risk;
• As many customers have experienced late response from the BMW, it needs to take prompt initiatives in order to improve or adopt more effective data base system to collect and retrieve data about the customers;
• It is important to open more call centres to enhance customer care services and give the solution of the problem of the BMW customers;
• Development of communication skills is one of the most significant factors to develop global operation and to provide right message;
• It should check the CRM strategies of the rivals because competitors like Volkswagen and Ford took various CRM initiatives to boost revenue by integrating SAP software, ERP and other latest solutions;
• In addition, BMW needs to take technological advantages and integrates Microsoft [Dynamics] CRM;
• The management of BMW should increase budget for CRM program;
• BMW should strictly pursue the provision of Data Protection Act;
• The response of BMW to the customers should make quick to solve the problem of the customers; so, the company should arrange regular training program;
• To minimise customer’s tension, BMW ought to provide updates to the customers about their car while it is in service.

Successful integration of CRM system is one of the main factors of competitors’ success in terms of profit margin and market share. As the customers of this company show moderately satisfactory impression about customer’s service, BMW should improve its position by using latest software, and providing other services.

Works Cited

Bekker, Henk. The profit and market share of automobile market. 2009. Web.

Buttle, Francis. Customer Relationship Management. 2 nd ed. London: Butterworth-Heinemann, 2008. Print.

Caly, Ralf. How BMW Channels Information to Everyone Involved in a Car Purchase: An Interview With Ralf Caly , Customer Think Corporation . 2006. Web.

Finlay, Steve. BMW Uses CRM to Aid Service Sales . 2008. Web.

IBM Business Consulting Services. Challenges for the automotive industry in an on demand environment . 2004. Web.

Shankar. Top 10 Highest Motor Manufacturers in the World 2011 . 2011. Web.

Stoner, Finch, Freeman Edward. & Gilbert Daniel. Management. Delhi: Prentice-Hall, 2003. Print.

Robbins, Stephen. & Coulter, Mary. Management. New Delhi: Prentice Hall, 2003. Print.

The Sky News. BMW Hit by a Crushing Dent in Profits. 2009. Web.

Thompson, John., et al. Strategic Management. New Delhi: Tata McGraw- Hill Publishing Company limited, 2007. Print.

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IvyPanda. (2024, March 30). BMW’s CRM: Case Study. https://ivypanda.com/essays/the-impact-of-customer-relationship-management-crm-on-bmw-research-paper/

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1. IvyPanda . "BMW’s CRM: Case Study." March 30, 2024. https://ivypanda.com/essays/the-impact-of-customer-relationship-management-crm-on-bmw-research-paper/.

Bibliography

IvyPanda . "BMW’s CRM: Case Study." March 30, 2024. https://ivypanda.com/essays/the-impact-of-customer-relationship-management-crm-on-bmw-research-paper/.

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Moderna and OpenAI partner to accelerate the development of life-saving treatments.

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Moderna partners with OpenAI to deploy ChatGPT Enterprise to thousands of employees across the company. Now every function is empowered with AI, creating novel use cases and GPTs that accelerate and expand the impact of every team.

Moderna has been at the intersection of science, technology, and health for more than 10 years. Moderna’s mission is to deliver the greatest possible impact to people through mRNA medicines—with the COVID-19 vaccine being their most well-known breakthrough. 

The company has partnered with OpenAI since early 2023. Now, ChatGPT Enterprise is evolving how Moderna operates across each function.

Moderna is using its platform for developing mRNA medicines to bring up to 15 new products to market in the next 5 years—from a vaccine against RSV to individualized cancer treatments. In order to achieve its ambitions, Moderna has adopted a people-centric, technology-forward approach, constantly testing new technology and innovation that can increase human capacity and clinical performance.

We believe very profoundly at Moderna that ChatGPT and what OpenAI is doing is going to change the world. We’re looking at every business process—from legal, to research, to manufacturing, to commercial—and thinking about how to redesign them with AI.

Moderna brings AI to everyone

Moderna adopted generative AI the same way Moderna adopts other technology: with the mindset of using the power of digital to maximize its positive impact on patients. To allow AI to flourish, they knew they needed to start with the user and invest in laying a strong foundation for change.

Moderna’s objective was to achieve 100% adoption and proficiency of generative AI by all its people with access to digital solutions in six months. “We believe in collective intelligence when it comes to paradigm changes,” said Miller, “it’s everyone together, everyone with a voice and nobody left behind.” For this, Moderna assigned a team of dedicated experts to drive a bespoke transformation program. Their approach combined individual, collective and structural change management initiatives.   

Individual change management initiatives included in-depth research and listening programs, as well as trainings hosted in person, online and with dedicated AI learning companions. “Using AI to teach AI was key to our success”, Miller points out. Collective change management initiatives included an AI prompt contest to identify the top 100 AI power users who were then structured as a cohort of internal Generative AI Champions. Moderna’s culture of learning led to local office hours in every business line and geography, and scaled through an internal forum on AI, which now has 2,000 active weekly participants. Lastly, structural change management initiatives included engaging Moderna’s CEO and executive committee members to foster AI culture through leadership meetings and town halls as well as incentive programs and sponsored events with internal and external experts.  

 This work led to an early win with the launch of an internal AI chatbot tool, mChat, at the beginning of 2023. Built on OpenAI’s API, mChat was a success, adopted by more than 80% of employees across the company, building a solid foundation for the adoption of ChatGPT Enterprise.  

90% of companies want to do GenAI, but only 10% of them are successful, and the reason they fail is because they haven’t built the mechanisms of actually transforming the workforce to adopt new technology and new capabilities.

Building momentum with ChatGPT Enterprise

With the launch of ChatGPT Enterprise, Moderna had a decision to make: continue developing mChat as an all-purpose AI tool, or give employees access to ChatGPT Enterprise?

“As a science-based company, we research everything,” said Brice Challamel, Head of AI Products and Platforms at Moderna. Challamel’s team did extensive user testing comparing mChat, Copilot, and ChatGPT Enterprise. “We found out that the net promoter score of ChatGPT Enterprise was through the roof. This was by far the company-favorite solution, and the one we decided to double down on,” Challamel said.  

Once employees had a way to create their own GPTs easily, the only limit was their imaginations. “We were never here to fill a bucket, but to light a fire,” Challamel said. “We saw the fire spread, with hundreds of use cases creating positive value across teams. We knew we were on to something revolutionary for the company.”

The company’s results are beyond expectations. Within two months of the ChatGPT Enterprise adoption: 

• Moderna had 750 GPTs across the company
• 40% of weekly active users created GPTs 
• Each user has 120 ChatGPT Enterprise conversations per week on average

Augmenting clinical trial development with GPTs

One of the many solutions Moderna has built and is continuing to develop and validate with ChatGPT Enterprise is a GPT pilot called Dose ID. Dose ID has the potential to review and analyze clinical data and is able to integrate and visualize large datasets. Dose ID is intended for use as a data-analysis assistant to the clinical study team, helping to augment the team’s clinical judgment and decision-making.

 “Dose ID has provided supportive rationale for why we have picked a specific dose over other doses. It has allowed us to create customized data visualizations and it has also helped the study team members converse with the GPT to further analyze the data from multiple different angles,” said Meklit Workneh, Director of Clinical Development at Moderna. 

Dose ID uses ChatGPT Enterprise’s advanced data analysis feature to automate the analysis and verify the optimal vaccine dose selected by the clinical study team, by applying standard dose selection criteria and principles. Dose ID provides a rationale, references its sources, and generates informative charts illustrating the key findings. This allows for a detailed review, led by humans and with AI input, prioritizing safety and optimizing the vaccine profile prior to further development in late-stage clinical trials. 

“The Dose ID GPT has the potential to boost the amount of work we’re able to do as a team. We can comprehensively evaluate these extremely large amounts of data, and do it in a very efficient, safe, and accurate way, while helping to ensure security and privacy,” added Workneh.

Improving compliance and telling the company’s story

Moderna’s legal team boasts 100% adoption of ChatGPT Enterprise. “It lets us focus our time and attention on those matters that are truly driving an impact for patients,” said Shannon Klinger, Moderna’s Chief Legal Officer. 

Now, with the Contract Companion GPT, any function can get a clear, readable summary of a contract. The Policy Bot GPT helps employees get quick answers about internal policies without needing to search through hundreds of documents. 

Moderna’s corporate brand team has also found many ways to take advantage of ChatGPT Enterprise. They have a GPT that helps prepare slides for quarterly earnings calls, and another GPT that helps convert biotech terminology into approachable language for investor communications. 

“Sometimes we’re so in our own world, and AI helps the brand think beyond that,” explained Kate Cronin, Chief Brand Officer of Moderna. “What would my mother want to know about Moderna, versus a regulator, versus a doctor? How do we tell our story in an effective way across different audiences? That’s where I think there’s a huge opportunity.”

A team of a few thousand can perform like a team of 100,000

With an ambitious plan to launch multiple products in the next few years, Moderna sees AI as a key component to their success—and their ability to stay lean as a business while setting new benchmarks in innovation. 

“If we had to do it the old biopharmaceutical ways, we might need a hundred thousand people today,” said Bancel. “We really believe we can maximize our impact on patients with a few thousand people, using technology and AI to scale the company.” 

Moderna has been well positioned to leverage generative AI having spent the last decade building a robust tech stack and data platform. The company fosters a culture of learning and curiosity, attracting employees that excel in adopting new technologies and building AI-first solutions.

By making business processes at Moderna more efficient and accurate, the use of AI ultimately translates to better outcomes for patients. “I’m really thankful for the entire OpenAI team, and the time and engagement they have with our team, so that together we can save more lives,” Bancel said. 

Chronic wasting disease: Death of 2 hunters in US raises concerns of 'zombie deer'

The 2022 report of two hunters who developed neurological diseases after eating potentially infected deer meat has raised concerns 'zombie deer disease' could pass to humans as mad cow disease did..

Two hunters who ate meat from a population of deer known to have chronic wasting disease − or "zombie deer disease" − developed similar neurological conditions and died, raising concerns that it can pass from animals to humans.

Found in deer in northern Colorado and southern Wyoming in the 1990s, chronic wasting disease (CWD) has been recorded in free-ranging deer, elk and moose in at least 32 states across all parts of the continental U.S., according to the U.S. Centers for Disease Control and Prevention .

Deer infected with CWD may be called "zombie deer" because the disease leads to weight loss, lack of coordination, stumbling, listlessness, weight loss, drooling, and lack of fear of people.

The 2022 case did prove that CWD could infect humans. But scientists and health officials have been concerned that CWD could jump to humans as mad cow disease did in the United Kingdom in the 1990s . In 2022, scientists in Canada published a study, based on mice research, suggesting a risk of CWD transmission to humans .

Here's what you need to know about chronic wasting disease and whether you need to worry about it.

Researchers identify troubling case involving 2 deaths

Researchers at the University of Texas Health Science Center at San Antonio have reported how two hunters who ate venison from a deer population known to have CWD died in 2022 after developing sporadic Creutzfeldt-Jakob disease (CJD), which is a neurological disease like CWD.

The second man to die, who was 77, suffered "rapid-onset confusion and aggression," the researchers said, and died within a month despite treatment.

"The patient’s history, including a similar case in his social group, suggests a possible novel animal-to-human transmission of CWD," they wrote in the case report , which was presented earlier this month at the annual meeting of the American Academy of Neurology and published in the peer-reviewed journal Neurology.

The researchers did not say where the men lived or hunted. But the highest concentration of CWD-infected deer can be found in Kansas, Nebraska, Wisconsin and Wyoming, according to CDC and US. Geological Survey reports.

Because of the difficulty in distinguishing between the diseases, the researchers said the case does not represent a proven case of transmission. However, "this cluster emphasizes the need for further investigation into the potential risks of consuming CWD-infected deer and its implications for public health," they wrote.

'Zombie deer disease': What to know about chronic wasting disease and its spread in the US.

What is 'zombie deer disease'? What are prion diseases?

Also known as chronic wasting disease, "zombie deer disease" is a prion disease, a rare, progressive and fatal neurodegenerative disorder that affects deer, elk, moose and other animals, the CDC says.

In prion diseases, the abnormal folding of certain "prion proteins" leads to brain damage and other symptoms, according to the CDC. Prion diseases , which usually progress rapidly and are always fatal, can affect humans and animals. 

Creutzfeldt-Jacob disease (CJD) and variant Creutzfeldt-Jacob disease (vCJD), which is a form of mad cow disease, are prion diseases found in people.

Mad cow disease  is an example of a prion disease that can spread from cattle to humans, and some researchers have likened "zombie deer disease" to it.

For instance, with mad cow disease, it usually took four to six years from infection for cattle to show symptoms, according to the Food and Drug Administration . Deer may have an incubation period of up to two years before the onset of symptoms. So, the animals could have the disease but look normal until the onset of symptoms, such as weight loss, notes the U.S. Geological Survey .

The development of vCJD in humans in the wake of mad cow disease – its official name is bovine spongiform encephalopathy, or BSE – through eating meat from contaminated cattle has concerned scientists about the possible transmission of chronic wasting disease (CWD) to humans.

Can 'zombie deer disease' be transmitted to humans?

Even though there has been no known confirmed case of deer-to-human transmission of "zombie deer disease,' concerns have risen since officials found CWD in a dead deer in Yellowstone National Park in November.

"As of yet, there has been no transmission from deer or elk to humans," Jennifer Mullinax, associate professor of wildlife ecology and management at the University of Maryland, told BBC . "However, given the nature of prions, CDC and other agencies have supported all efforts to keep any prion disease out of the food chain."

Should CWD transmit to humans, it could create a "potential crisis" similar to what mad cow disease caused, Michael Osterholm, director of the Center for Infectious Disease Research and Policy at the University of Minnesota, told BBC .

"However, it’s important to note that BSE and CWD prions differ structurally, and we do not yet know whether the pathology and clinical presentation would be comparable if CWD transmission to humans were to occur," he said.

Meanwhile, chronic wasting disease continues to spread to more states; the most recent is Indiana. The disease was detected this month in a male white-tailed deer in the northeastern part of the state, which borders part of Michigan, where CWD had been detected earlier, according to the Center for Infectious Disease Research and Policy .

The U.S. Geological Survey updated its tracking of chronic wasting disease on Friday to include 33 states (adding Indiana), as well as four Canadian provinces and four other countries (Finland, Norway, Sweden and South Korea).

Contributing: Sara Chernikoff and Julia Gomez

Follow Mike Snider on X and Threads:  @mikesnider  & mikegsnider .

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