BMW's Innovation Strategies
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Case Code : BSTR060
Case Length : 11 Pages
Period : 2002 - 2003
Organization : BMW
Pub Date : 2003
Teaching Note :Not Available
Countries : Germany
Industry : Automobiles and Automotive
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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BMW's Innovation Management Model
Industry observers have noted that the key to BMW's success was in its ability to nurture new ideas, short list the potential ones and process them till the end stage through an integrated innovation process.
The realization that a lack of infrastructure or resources to explore and exploit numerous new ideas generated was hampering BMW's new product development activities, was the first step towards devising its new innovation management model. In late 1997, the company roped in Business Innovation Consortium (BIC), a US based consulting firm that specialized in innovation management, to conduct a critical assessment of its innovation processes. BIC confirmed BMW's doubt that though many new ideas were circulating in the company, its innovation processes failed in selecting the best ideas and in allocating appropriate resources. According to the analysts, BMW's innovation related policies then, made it virtually impossible to find the best ideas and lead them to commercialization quickly...
The final stage in the innovation management process was innovation transfer. This stage ensured the smooth flow of the projects from research and pre-development stages to the development stage.
This stage was primarily aimed at transferring the innovation project in the pre-development stage, to its respective vehicle project managers, who carried on the actual development work. Innovation transfer was a comprehensive process and usually it took several months to complete. This was so because the stage was characterized by extensive negotiations between the vehicle project managers and the project managers. As the project managers were restricted by budget allocations made by IFCs,
they had to convince the vehicle project managers to limit the costs of
developing the end product within the budget allotted to them. The
innovation transfer stage was aimed at assessing the risks involved in
the project and minimizing them...
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