CASE ANALYSIS “ BMW ACQUISITION OF THE ROVER GROUP
The case is one of the acquisitions of a firm operating in the automobile industry, by another. It calls for a strategic Analysis, by analyzing the internal and external environment to enable:
An understanding of where the firms are and how they got there.
An understanding of the resources and the environment
An understanding of the Industry and key success factors
Consideration of the competitive strategy
The case covers the following periods:
Rovers strategic alliance with Honda's had developed into a wide-ranging relationship that was the envy in the Industry. The company had been acquired by British Aerospace, who however had an intent to sell the company by August 1993. This period of the early 1990's was characterized by a worldwide recession as the dominant factor. The company continued with the alliance developing stylish, quality and reliable vehicles. Sales performance was very good in UK and Japan.
March 1992- January 1994: Process Of Sale
The Company underwent a period of where several other car manufacturers proposed to buy rover. The earliest offer was from Volkswagen in 1992. The company was impressed largely by the outcome of Rovers' alliance with Honda. Ford also was interested in buying Rover, as were Peugeot and Fiat. During this period there was also talk of a management buyout of Rover.
As competition intensified BMW required to grow in size in order to survive global competition. BMW finally bought Rover in January 1994.
The case describes the strategy of the two companies in the Automobile industry.
The theme of the case is basically one of strategic option and especially by acquisition. Minor themes on strategic analysis, structure, globalization and competitive strategy options are evident in the case.
In order to consider the strategic option and acquisition it is important to take into account the environ