BMW Going on the Offensive

However, outside its home market, Rover did not have a strong brand image. The Honda Group (Honda), a leading Japanese automobile company, had a 20% stake in Rover. In 1993, British Aerospace faced a severe financial crunch, following which it began restructuring its operations. The company decided to focus on its core businesses and discontinue its non-core businesses. In line with the above decision, British Aerospace decided to sell off Rover Group. Rover Group comprised of Rover brand and the Land Rover brand. BMW felt that acquiring Rover would help it expand its product range, as Rover had a strong presence in the mass segment. BMW was especially interested in the Land Rover brand, which was the leader in the four-wheel-drive segment...

To execute the restructuring plan effectively, BMW reorganized its management board and appointed new chiefs for its various divisions, such as production, R&D, and sales and marketing. Commenting on the board's reorganization, Milberg said, "With the new team, we will put the reorientation of the BMW Group appropriately into practice." BMW also strengthened its R&D operations, increased its production capacity and enhanced its dealer network to support the overall plan. As BMW was already a major player in the premium segment, it decided to leverage this position and further expand its reach in that segment. Hence, the company sought to establish itself at all levels (from entry level to the top) of the premium car segment...