BMW's "Company of Ideas" Campaign:
Targeting the "Creative Class"

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Case Details:

Case Code : MKTG137
Case Length : 17 Pages
Period : 2004-2006
Organization : BMW of North America LLC
Pub Date : 2006
Teaching Note : Available
Countries : USA
Industry : Auto & Ancillaries

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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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Background Note

BMW Group AG

BMW was founded in 1913, when Karl Friedrich Rapp (Rapp) set up Bayerische Flugzeug-Werke to manufacture aircraft engines in the Munich district of Germany. In 1916, during World War I, the company entered into a contract to manufacture aircraft engines for the Austrian-Hungarian army. In 1917, to meet the need for additional funds, Rapp gained the support of Camillo Castiglioni and Max Friz and the company rechristened itself as Bayerische Motoren Werke GmbH.

In the same year, the company ran into difficulties because of over-expansion. It was taken over by Franz Josef Pope and in 1918 he named it BMW AG.

In 1918, BMW manufactured its first aircraft engine, the Type IIIa. This engine could power a biplane¹² to reach an altitude of 5000 meters in just 29 minutes, creating a world record. After the World War I, the Treaty of Versailles (1919) put a ban on production of aircraft in Germany.

Thus, in 1919, the company started to manufacture railway brakes. In the same year it designed its first motorcycle engine. In 1923, it started manufacturing motorcycles and its first model R32, a 500cc shaft-driven motorcycle, designed by Max Friz, was launched. BMW forayed into car manufacture in the late 1920s. (Refer to Exhibit I for BMW's Logo). In 1928, BMW set up a car manufacturing unit in the Eisenach region of Germany and started manufacturing a small car called 'Dixi', based on the Austin Seven car¹³ under license. In the following year it acquired the Dixi Company.

It was BMW's first car and was marketed under the name BMW 3/15. Over the next decade, BMW launched a number of successful models. Its cars, especially the 327 saloon and 328 roadster, were considered very advanced for their time, and the roadster was even nominated as the 'Car of the Century' in 1999 by some auto experts.

With the start of World War II, BMW's car business took a back seat as it started manufacturing aircraft engines once again. Its aircraft engines and motorcycles were extensively used by the German army. Toward the end of the war, the company's plants were heavily bombed and those on the eastern part of the country were captured by the Soviet Union...

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12] A biplane is a fixed-wing aircraft with two main wings of similar spans, normally one mounted above, and the other level with the underside of the fuselage.

13] Austin Seven was a British car named after Sir Herbert Austin, its designer. The Austin Car Works were located at Longbridge in England. The plant at Eisenach was producing the cars under license from the British company.