Question

Examine the various types of contracts available to BMW when dealing with international suppliers and advise them on which contracts would be most beneficial to achieve a competitive advantage.

Answer 1

The BMW Group has a host of global suppliers and contractors which works for the behalf of the business to provide it with various parts and materials to build its vehicles. The global contractors are the best source for the consumer value creation for the business in this competitive global market. It has 12,000 suppliers from 70 nations that have a similar environment and work practice like BMW associated with it.

In the international markets, various goods come at various prices based on the resources that the nations possess and the way it delivers and develops the same. The business has to locate those places to source the materials for the best of values including the supply chain costs for the long term business viability. For example, the business can outsource its steel to Australia, the rubber for the tires to Malaysia, aluminum to India based on the cost and constraint in the supply chain for the best of business value generation for the best of stakeholder’s benefits. This would make the supply-chain strong and long-term for the BMWs value-added products.