Essay BMW Mini EV – Decision Making Under Uncertainty – Report Writing – Management Assignment Help

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BMW MINI EV: DECISION MAKING UNDER UNCERTAINTY
In April 2017, BMW AG (BMW) faced a big decision regarding which plant should produce the first electric version EV (electric vehicle) of BMW’s iconic Mini car. The B MW’s operations team in the United Kingdom (UK) was determined to make the Mini EV at its historical home base in the UK. However, given the uncertainty arising from the UK’s decision to leave the European Union (EU) (“Brexit”), how would the team be able to convince BMW corporate leadership?

The main assembly line for the Mini was in Cowley, England. It employed a highly integrated production and distribution network spanning the UK and Continental Europe. Gasoline engines for the Mini were manufactured by BMW in Hams Hall in the UK, but many parts came from Germany or other parts of Europe.

The decision of where to produce the Mini Electric was strategically important for BMW because it represented a key element in BMW’s plans to introduce electric versions of its main models and for 15 to 25 per cent of its cars to be sold with an electric engine by 2025.

Following the Brexit decision, the future legal basis for trade between the UK and the remainder of the EU was highly uncertain. Depending on how the trade negotiations turned out, different types of trade barriers between EU and the UK were expected to emerge. BMW needed an arrangement that would support its electric-mobility ambitions under a variety of different policy scenarios.

BMW AG
BMW was founded in 1916 and headquartered in Munich, Germany. The company focused on luxury car and motorcycle brands, manufacturing vehicles in Germany, Brazil, China, India, South Africa, the UK, and the United States. In 2016, BMW sold 2,367,603 cars and 145,032 motorcycles.

The largest markets were China (516,785 cars sold in 2016), the United States (366,493), Germany (298,928), and the UK (252,205). In 2016, total group revenues were €94.1 billion, and earnings before interest and taxes (EBIT) were €9.39 billion. A list of BMW’s global production plants can be found in Exhibit 1. Mini was part of the BMW group; it sold 360,233 cars in 2016.

The Mini—Heritage and Target Market
A fuel shortage sparked by the 1956 Suez Crisis inspired Leonard Lord, president of the British Motor Corporation (BMC), to commission the creation of a “proper miniature car.” Designed by Sir Alec Issigonis, it was a small, no-frills car that made optimal use of its small structure. Called the “Mini” and introduced in 1959, the car was manufactured at BMC’s plants in Longbridge and Cowley, England, as well as around the world.

The car focused on functionality. Customers had to request heating units, as they did not come standard. It was after a partnership with racing car maker John Cooper that the Mini earned a reputation for performance, and its popularity grew when British fashion model Twiggy and American actor Steve McQueen were photographed driving the car, as well as when the brand was featured in several movies.

The Mini brand had been owned by a series of British firms and was last owned by the Rover Group when BMW acquired it in 1994. The latest iteration of the Mini retained the design heritage of the original. Anders Warming, Mini’s head of design, described the brand as follows: “Mini has always been about new ideas, inspiration, and a lot of passion, and these things are not going to change.”