Case Study

1. SHRI DHARMASTHALA MANJUNATHESHWARA
INSTITUTE FOR MANAGEMENT DEVELOPMENT
SUBJECT: INTERNATIONAL BUSINESS
ROLL NO.: 21124
BATCH: PGDM 2021-2023
SECTION: C
TOPIC: MERCEDES-BENZ CASE STUDY
SUBMITTED BY: SUBMITTED TO:
ANUSHKAKAUSHAL PROF. CHANDAN PALAKSHA
21124

2. MERCEDES-BENZ CASE STUDY
Q1) Evaluate the advisability of Mercedes Benz’s announced shift in strategy. How might this
shift in strategy improve Mercedes Benz’s competitiveness in the global auto industry? What
are the risks?
Ans 1) According to me the announcement of shift in strategy of Mercedes Benz could be
beneficial for them as they are already losing the market and they need to make changes to
keep themselves still running in the market. Their first strategy was to abandon the plan the
build a new truck assembly plant at Ahrensdorf. This strategy was implemented seeing the
worsening condition of truck industry in the Europe. A plant which for now will not provide
them with any benefit it is better to stop it and change the focus to some other corner. Their
second strategy was to transform the firm from a luxury automaker to afull line manufacturer
offering high quality vehicles in all segments of the market. This was implemented to survive
in the market. Even the company realized that they must change their style and strategy in
order to stay alive in the industry. In this strategy they planned to manufacture new
automobiles like small cars focusing on middle income consumers and develop two lifestyle
vehicles – a minivan and a four-wheeler SUV, both of them becoming increasingly popular at
that time. Their third strategy was to set up production plants overseas and not just Germany
and go global in terms of production also. Their plan was also to manufacture these minivans
and SUVs outside Germany.
All these announcements might cause a major shift in the direction because these were quite
a few big announcements which would also cause a change in the other companies, forcing
them to change their strategies as well. With the change in strategies this might attract more
foreign labour as labour in Germany was quite expensive. This will also help them cut costs
and reduce the prices as the manufacturing cost because of labour in Germany was very high.
Their strategy of manufacturing new cars will provide more choices to the customers, and this
will also help the company to reach more audience as the middle-income people are more in
number than the people who buy luxury cars.
Although there are a few risks involved according to me in this liketo expand their production
globally they need to find new sites and find labors which would be difficult for them in a new
place. For manufacturing a new vehicle also, they need to invest money and time in the
planning of those cars, how to market them etc. so that they would make profits and stay in
the market.

3. Q2) The legal structure of Mercedes Benz’s worldwide organization is presented on Exhibit 2.
For managerial purposes (as opposed to legal purposes) what organization design would you
recommend for Mercedes Benz’s passenger cars Division? What are the implications for the
global distribution of activities and decision-making processes?
Ans 2) According to me customer centricity is very important in any company. There should
be a proper person allotted to look after product project and should be answerable to the top
management.
The organization should create the new function of COO to properly manage all areas that
are operationally involved in the innovation, development, and value generation process. All
business operations should be able to regulate it effectively throughout a product's life cycle.
As a result, these areas will be integrated inside Daimler AG's board of management and
governed from a specific source. Redundancies will be reduced, the efficiency of the
organization will be increased, and Daimler as a whole will become more versatile by
combining the financial areas of Daimler AG and Mercedes-Benz under one single authority
who will be a board member of Daimler AG and also responsible for finance & controlling and
Daimler Mobility.
Daimler AG should actively pursue its product, electrification, and digitization drive as part of
its long-term business plan. In order to respond even rapidly and more accurately to changing
consumer requests and complicated market demands in the future, the company's
organizational structure should be progressively developed. Through closer and more
effective cooperation, the goal should be to improve the development and production
processes of cars, technology, and services.
Q3) Consider the person in charge of Mercedes-Benz’s new SUV activities in Alabama. What
job description would you propose for that person? By what measures.
Ans3) According to me a person who is the in charge of the Mercedes-Benz new SUV activities
in Alabama should possess the following qualities:
 Leadership
The person should be an effective leader. Good supervisors take initiative while also
providing support, motivation, and accountability to other team members. They have
their own robust skillsetandare willing to perform menial or mundane tasks to ensure
a program or organization runs properly.
Supervisors also must possess the ability to objectively evaluate their team members;
identify their strengths and apply them to the appropriate areas; and recognize any
needs for improvement.
 Problem solving

4. The person should have the knowledge to solve the problems, if any arrive while
manufacturing the car or during that period of time. He should possess creativity,
critical thinking and consistency which will help his delegates and the company.
Supervisors are relied on frequently to take the lead when an issue arises. Their job is
to find the root of the problem and then follow an acceptable and structured process
for addressing it.
 Technical Skills
Since this is about manufacturing cars the person in charge should have knowledge
about the technicality about cars,its parts and process. He should be able to make out
ifanything during the manufacturing process goes wrong and should be ableto correct
it.
 Time and priority management
Every supervisor must know that they have limited time in which they have to
complete the production. A good supervisor is able to prioritize and delegate
accordingly to ensure they are completed in a timely and efficient manner. With
excellent time-management skills, a supervisor is able to oversee their team’s heavy
workload in the most productive way without leaving employees feeling stressed and
burned out.
Q4) Assume the role of Mercedes-Benz’s new chairman, Helmut Werner. Suppose that
following your recent announcements you have come under vocal criticism by several
elements of German society. One critic argues that Mercedes-Benz’s leadership in the world
automotive industry has been due in large measure to the German educational system
(supported by German taxpayers), the German transportation and communication
infrastructure (also paid for by public funds), as well as by the enduring loyalty of German
workers. A firm which has benefitted from these public goods, he maintains ought areciprocal
obligation to include ways to contribute to a high national standard of living, rather than to
export jobs, since the export of jobs will inevitably lead to an erosion of the social systemthat
Germans have worked hard to build. How would you reply?
Ans 4) Mercedes-Benz is headquartered in Stuttgart, Germany. Despite the fact that
Mercedes-Benz has taken significant steps to broaden its market and relocate production
sites to other nations, the earnings generated in other countries will be credited to Germany.
We shall be aware of the negative implications of exporting jobs to other countries as the
Chairman of a worldwide known corporation. To respond to the critique, there were grounds
for shifting the workforce, including the fact that labour rates in Germany were substantially
higher than in other countries, and this was a significant component in the organization's
production costs.However, producing money for the company and lowering operational costs
are both necessary for the company to run smoothly and stay competitive. Because we can
acquire inexpensive labour in other parts of the world, we can keep our cars more affordable
and sell additional units on the market. To avoid this issue, we urge that the national

5. government step forward and establish uniform hourly labour wages, as well as offer
economic stimulus to businesses through subsidiaries.