This document provides a case analysis of Mercedes Benz's shift in strategy in the 1990s. It discusses three key shifts: 1) Canceling plans for a new truck plant in Germany due to overcapacity; 2) Transforming from a luxury car maker into a manufacturer of high-quality vehicles across market segments; 3) Developing new models like small cars, SUVs, and minivans. The analysis evaluates how these shifts improved Mercedes' competitiveness and discusses risks like increased competition, labor costs, and challenges launching new products. It concludes the strategies will yield long-term benefits despite short-term performance issues. The document also addresses questions on Mercedes' organizational structure, the role of a new SUV plant manager in Alabama
Its a presentation on strategies followed by BMW in different phase es and departments in the organisation.
Data collected from secondary sources (like websites,thesis,and reports) for this PPT
Its a presentation on strategies followed by BMW in different phase es and departments in the organisation.
Data collected from secondary sources (like websites,thesis,and reports) for this PPT
Islam shieha cv , MBA , MECH engineer , 17YRS EXPIslam Shieha
I am an MBA holder in Global Management Track with 17 years' total experience, 13 years of international Sales experience Specialty B2B sales in different industries
Designing Successful International Go-To-Market StrategiesHans Bech
This white paper describes some of the challenges associated with international market penetration for software companies with long value chains. Further, it gives two real life examples of how companies have overcome these challenges using very different approaches.
Company XYZ changed from a channel-based approach to internationalization through acquisitions. Company ABC chose an international joint venture strategy to compensate for lack of staff and funds.
1
2
Understanding Target Market
BMW Company
BMW is a company based in Germany, and it was established in 1916 to make military aircraft. Later it switched to building automobiles dealing with multiple brands BMW, Rover, Rolls-Royce, and Mini. BMW acquired these additional brands beginning as early as 1994 until the present time. The company is still outstanding on the sale of high-class cars. The company promotes a culture of top performance and teamwork, which makes it be highly ranked. The company has set up two main goals: one of them is to remain profitable, and secondly, it’s to raise the long-term value of BMW. The company has focused on making it collaborations stable between its three brands. Also, it employs employees who can enhance the spirit of teamwork and ready to take risks. It is also planning on how they can make universal engines that can be used by different car models. (Kasi, 2010)
Regarding customer analysis, the target group of its products is the young audience. Different car models have different clients. The BMW targets people of 20-65 years of age, MINI targets people aged 25-45 years finally Rolls Royce targets individuals who are 40 years and above. Regarding gender, these automobiles target both male and females. These cars are associated with people who have a high income that is professionals and executives. By geographic, these cars are sold both locally and internationally and mostly in the urban areas. (Dudovskiy, 2016)
SWOT Analysis
This company has various strengths. One of them is that its cars are classic, comfortable and less fuel consumption. The cars are additionally safe because of the technology involved; this makes them more durable. They are also environmentally friendly. Out of this, they have a strong reputation that makes them be known all over the world. This particular company has successfully maintained its corporate social responsibility, and also it has a high recognition in China; this attracts them more customers, which help them achieve their targeted sales.
On the other end, the companies still have some weaknesses. One of them is that their cars are very costly which may imply that the customers may be few. It has a high-cost structure that in a way may make the brand name to be weaker in some market segments. Brand portfolio diversification is also a weakness to the company. The company also has some opportunities including, plans for expansion, increase the price of fuel.
Despite the BMW Company performing at its best, it still faces stiff competition from other companies that make classic cars, for example, Mercedes-Benz, Acura, and Lexus among others. This acts as a threat to BMW Company, but hard work and dedication are enough to ensure that it out does the competition. The decrease in prices of fuel, the rise in the price of raw materials and rise in euro exchange rate all pose a threat to the company.
PEST Analysis
The external environment also has a great impac ...
1 Chapter 7. Supporting Business Strategy through Funct.docxaryan532920
1
Chapter 7. Supporting Business Strategy through Functional Strategies
In 2015, India’s packaged fruits drink market was valued at Rs. 11 billion (~US$200 million).
Dabur held a 55% share of the market, followed by PepsiCo at 30%; up from 50% and 25%
respectively a decade back. Fewer than 20% of the people in India consume fruit juices as part
of their diet, as compared to ~40% who consumed bottled water and ~60% who consumed coffee
and soft drinks. Over the past decade, the market has grown by 15-20% annually because of the
rising health-consciousness, and is expected to sustain that growth over the coming years. The
government of India has set targets to triple the size of processed food sector, by increasing the
level of processing of perishables from 6% to 20%, and value addition from 20% to 35%, as a
way to raise farm incomes (Sharma, 2015).
Dabur has been sourcing mass-produced lychee, guava, grapes, and mango juices from
the domestic vendors, and orange, apple, and pineapple concentrates from the overseas suppliers.
To be more responsive to the consumer needs, Dabur has been buying fruits directly from
farmers since 2004, and is processing them in-house in a new plant it set-up in Siliguri, West
Bengal. It has also migrated to a flexible production system to offer fruit in a variety of
specialized forms, such as juice, sauce, puree, smoothie, paste, and ketchup.
To grow its share of the overall market and grow even faster than the market, Dabur has
used customized Research and Development to boost the share of the under-served institutional
segment in its total sales from a fourth in 2003 to a third now. Amit Burman, the then CEO of
Dabur, noted, ‘Often, products are created when our [institutional] buyers tell us about their
culinary problems, which could range from getting pre-chopped onions in bulk to mixing the
best juice and yoghurt smoothie. As we have the experience and the network, and there is ample
capacity available in the country, it is easy for us to offer solutions (Srinivas, 2003).’
More flexible operations and sourcing system, and institutionally led marketing and
research effort has also helped Dabur realize its strategic intent of becoming a leader in the
broader processed fruits market, beyond just juices and concentrates.
In the previous chapter, we learnt about the three different types of business strategies –
cost leadership, differentiation, and growth mindset (besides ‘focus’). In addition to deciding
the overall strategy for their business, executives also need to develop and align functional core
competencies. Dabur’s growth business strategy has required new competencies in supply chain,
research and development, operations, and marketing. Each function relies on different and
specific techniques and technologies to achieve the common business objectives of cost
efficiency, customer and quality ...
Islam shieha cv , MBA , MECH engineer , 17YRS EXPIslam Shieha
I am an MBA holder in Global Management Track with 17 years' total experience, 13 years of international Sales experience Specialty B2B sales in different industries
Designing Successful International Go-To-Market StrategiesHans Bech
This white paper describes some of the challenges associated with international market penetration for software companies with long value chains. Further, it gives two real life examples of how companies have overcome these challenges using very different approaches.
Company XYZ changed from a channel-based approach to internationalization through acquisitions. Company ABC chose an international joint venture strategy to compensate for lack of staff and funds.
1
2
Understanding Target Market
BMW Company
BMW is a company based in Germany, and it was established in 1916 to make military aircraft. Later it switched to building automobiles dealing with multiple brands BMW, Rover, Rolls-Royce, and Mini. BMW acquired these additional brands beginning as early as 1994 until the present time. The company is still outstanding on the sale of high-class cars. The company promotes a culture of top performance and teamwork, which makes it be highly ranked. The company has set up two main goals: one of them is to remain profitable, and secondly, it’s to raise the long-term value of BMW. The company has focused on making it collaborations stable between its three brands. Also, it employs employees who can enhance the spirit of teamwork and ready to take risks. It is also planning on how they can make universal engines that can be used by different car models. (Kasi, 2010)
Regarding customer analysis, the target group of its products is the young audience. Different car models have different clients. The BMW targets people of 20-65 years of age, MINI targets people aged 25-45 years finally Rolls Royce targets individuals who are 40 years and above. Regarding gender, these automobiles target both male and females. These cars are associated with people who have a high income that is professionals and executives. By geographic, these cars are sold both locally and internationally and mostly in the urban areas. (Dudovskiy, 2016)
SWOT Analysis
This company has various strengths. One of them is that its cars are classic, comfortable and less fuel consumption. The cars are additionally safe because of the technology involved; this makes them more durable. They are also environmentally friendly. Out of this, they have a strong reputation that makes them be known all over the world. This particular company has successfully maintained its corporate social responsibility, and also it has a high recognition in China; this attracts them more customers, which help them achieve their targeted sales.
On the other end, the companies still have some weaknesses. One of them is that their cars are very costly which may imply that the customers may be few. It has a high-cost structure that in a way may make the brand name to be weaker in some market segments. Brand portfolio diversification is also a weakness to the company. The company also has some opportunities including, plans for expansion, increase the price of fuel.
Despite the BMW Company performing at its best, it still faces stiff competition from other companies that make classic cars, for example, Mercedes-Benz, Acura, and Lexus among others. This acts as a threat to BMW Company, but hard work and dedication are enough to ensure that it out does the competition. The decrease in prices of fuel, the rise in the price of raw materials and rise in euro exchange rate all pose a threat to the company.
PEST Analysis
The external environment also has a great impac ...
1 Chapter 7. Supporting Business Strategy through Funct.docxaryan532920
1
Chapter 7. Supporting Business Strategy through Functional Strategies
In 2015, India’s packaged fruits drink market was valued at Rs. 11 billion (~US$200 million).
Dabur held a 55% share of the market, followed by PepsiCo at 30%; up from 50% and 25%
respectively a decade back. Fewer than 20% of the people in India consume fruit juices as part
of their diet, as compared to ~40% who consumed bottled water and ~60% who consumed coffee
and soft drinks. Over the past decade, the market has grown by 15-20% annually because of the
rising health-consciousness, and is expected to sustain that growth over the coming years. The
government of India has set targets to triple the size of processed food sector, by increasing the
level of processing of perishables from 6% to 20%, and value addition from 20% to 35%, as a
way to raise farm incomes (Sharma, 2015).
Dabur has been sourcing mass-produced lychee, guava, grapes, and mango juices from
the domestic vendors, and orange, apple, and pineapple concentrates from the overseas suppliers.
To be more responsive to the consumer needs, Dabur has been buying fruits directly from
farmers since 2004, and is processing them in-house in a new plant it set-up in Siliguri, West
Bengal. It has also migrated to a flexible production system to offer fruit in a variety of
specialized forms, such as juice, sauce, puree, smoothie, paste, and ketchup.
To grow its share of the overall market and grow even faster than the market, Dabur has
used customized Research and Development to boost the share of the under-served institutional
segment in its total sales from a fourth in 2003 to a third now. Amit Burman, the then CEO of
Dabur, noted, ‘Often, products are created when our [institutional] buyers tell us about their
culinary problems, which could range from getting pre-chopped onions in bulk to mixing the
best juice and yoghurt smoothie. As we have the experience and the network, and there is ample
capacity available in the country, it is easy for us to offer solutions (Srinivas, 2003).’
More flexible operations and sourcing system, and institutionally led marketing and
research effort has also helped Dabur realize its strategic intent of becoming a leader in the
broader processed fruits market, beyond just juices and concentrates.
In the previous chapter, we learnt about the three different types of business strategies –
cost leadership, differentiation, and growth mindset (besides ‘focus’). In addition to deciding
the overall strategy for their business, executives also need to develop and align functional core
competencies. Dabur’s growth business strategy has required new competencies in supply chain,
research and development, operations, and marketing. Each function relies on different and
specific techniques and technologies to achieve the common business objectives of cost
efficiency, customer and quality ...
James Yeagle - Regional & National Sales LeadershipYeagleJames
• I.T. Staff Aug, I.T. SOW
• Led sales teams with revenues that have ranged from $17 million to over $100 million.
• Led sales teams as small as 6 to teams as large as 75.
Running head: NEW PRODUCT LAUNCH MARKETING PLAN
II
1
NEW PRODUCT LAUNCH MARKETING PLAN II
7New Product Launch Marketing Plan: Part 2Basil Balogun, Ashleigh Closen, Deyana Salman, Michell Simpson, Shawn StacyMKT/571
August 3, 2014
Steven Kraus
New Product Launch Marketing Plan: Part 2
Being able to target market profiles and create a position statement allows companies to identify ways to connect to the consumers. By identifying these needs the company can target opportunities to be successful in a competitive market. The target market profile describes the steps needed for managers to devise a specific platform to sell the HMI devices. By targeting the appropriate consumer market Siemens can increase the chance of success of sales at the product launch and ensure consistency for future sales. Siemens first needs to pinpoint the correct target base for the launch of the HMI product. Identifying the consumer is the appropriate first step in the process to begin the target market profile
Identifying the consumers buying behaviors is a necessary process to align the production strategy before implementing the whole plan. Without understanding the buying behavior of the consumer, it is quite impossible to draw the attention of the consumers towards the organization (Glenn Muske (2012): Understand Consumer Buying Behavior).
Good quality is a consumer demand that must be held to the highest standard. In addition to good quality there must be attention paid to the specific variety to offer the consumer interested in the HMI product.
Luring customers in to try the product is a huge task in itself. Offering the product to consumers in such a way that the buyers are motivated to the Siemens product is also very important. These decision motivators are what can bring the customers to Siemens and developing the target market profile will enable Siemens to retain consumers as well. Some examples of motivators Specific to the HMI are the following: allowing the customer to trust the product, ease of use, getting the customer excited about the product, showing the customer the need of the product, and how the product can improve their current experience.
Product life Cycle (PLC) is the process a product will go through from the when it is introduced to growth, maturity and decline. Product life cycle can be divided into several stages. Each stage can then be explained through four marketing mix implications called the four Ps.
Introduction Stage
a. Product: Patents and trademarks are obtained is this stage. The quality level is established and how the branding will be done.
b. Pricing: Penetration pricing strategy can be used and low introductory price is set to gain market shares or high skim pricing strategy to recover cost quickly.
c. Promotion: This is done to build brand awareness.
d. Place: Where the product will be sold and distribution strategy.
Growth Stage
a. Product: Features and packag.
12Pricing and Distribution Model BMWThe Bayerische Mo.docxmoggdede
1
2
Pricing and Distribution Model: BMW
The Bayerische Motoren Werke (BMW) group is a leading Germany car manufacturer specializing in the production of automobiles and motorcycles (Wu, 2017). The company was founded in 1913 and since has diversified its operations into over 40 countries globally, with over one million employees distributed across its subsidiaries, depots, showrooms, and manufacturing plants. The organization’s business strategy based on its powerful brand image, with its core values being technology, innovation, quality, and reliability. The company has through the over one century that it has been in existence lived to the ideals of its vision strategy has modeled around identification of potential and growth encouragement (Byun, 2014) In this discussion we shall seek to establish the company’s distribution model and price setting mechanism.
BMW Distribution model
The BMW group has over 4, 400 dealers worldwide who are tasked with the selling new cars produced by the company, old cars, parts and even offering of after sale services (Li et al., 2014). The distribution channel adopted by the organization is meant to help align the organization’s operations with the customer needs, as the customers can place their orders, make inquiries and even give feedback on the various car models through the dealers, who directly submit the information to the company.
Distribution strategy
Companies according to Byun (2014) have to ensure their products reach the final customers in such a manner that the product is still affordable and of the expected quality. Over the years the BMW group like all other automobile manufacturers has mostly relied on the supply-push philosophy, where they manufactured the various vehicles models to a high supply with the expectation of pushing the product down the chain of demand through rigorous marketing. The company relied heavily on the traditional dealers to market their various brands and with the turbulent market economy pushing the conventional dealers to hike the prices and reduce the services offered to the customers.
The shrinking dealer margins made the dealers to impair the service quality provided to the clients, and this prompted the management of the BMW group to rethink their overall distribution strategy (Wu, 2017). The company through the decline in the sales margin and increased competition in the market opted to adopt the customized distribution strategy where the clients would be able to place orders and specifications on the various vehicle brands. The company would collaborate with its dealers to produce cars that are tailored and made to suit the customer needs. The group also has ingrained technology in its distribution process through the adoption of web-based services, easing the process of carrying out market surveys, tracking customers shopping habits as well as monitoring the dealers’ performance in real-time.
Positioning within the channel
The BMW group has through t ...
Enterprise Excellence is Inclusive Excellence.pdfKaiNexus
Enterprise excellence and inclusive excellence are closely linked, and real-world challenges have shown that both are essential to the success of any organization. To achieve enterprise excellence, organizations must focus on improving their operations and processes while creating an inclusive environment that engages everyone. In this interactive session, the facilitator will highlight commonly established business practices and how they limit our ability to engage everyone every day. More importantly, though, participants will likely gain increased awareness of what we can do differently to maximize enterprise excellence through deliberate inclusion.
What is Enterprise Excellence?
Enterprise Excellence is a holistic approach that's aimed at achieving world-class performance across all aspects of the organization.
What might I learn?
A way to engage all in creating Inclusive Excellence. Lessons from the US military and their parallels to the story of Harry Potter. How belt systems and CI teams can destroy inclusive practices. How leadership language invites people to the party. There are three things leaders can do to engage everyone every day: maximizing psychological safety to create environments where folks learn, contribute, and challenge the status quo.
Who might benefit? Anyone and everyone leading folks from the shop floor to top floor.
Dr. William Harvey is a seasoned Operations Leader with extensive experience in chemical processing, manufacturing, and operations management. At Michelman, he currently oversees multiple sites, leading teams in strategic planning and coaching/practicing continuous improvement. William is set to start his eighth year of teaching at the University of Cincinnati where he teaches marketing, finance, and management. William holds various certifications in change management, quality, leadership, operational excellence, team building, and DiSC, among others.
Tata Group Dials Taiwan for Its Chipmaking Ambition in Gujarat’s DholeraAvirahi City Dholera
The Tata Group, a titan of Indian industry, is making waves with its advanced talks with Taiwanese chipmakers Powerchip Semiconductor Manufacturing Corporation (PSMC) and UMC Group. The goal? Establishing a cutting-edge semiconductor fabrication unit (fab) in Dholera, Gujarat. This isn’t just any project; it’s a potential game changer for India’s chipmaking aspirations and a boon for investors seeking promising residential projects in dholera sir.
Visit : https://www.avirahi.com/blog/tata-group-dials-taiwan-for-its-chipmaking-ambition-in-gujarats-dholera/
Business Valuation Principles for EntrepreneursBen Wann
This insightful presentation is designed to equip entrepreneurs with the essential knowledge and tools needed to accurately value their businesses. Understanding business valuation is crucial for making informed decisions, whether you're seeking investment, planning to sell, or simply want to gauge your company's worth.
The world of search engine optimization (SEO) is buzzing with discussions after Google confirmed that around 2,500 leaked internal documents related to its Search feature are indeed authentic. The revelation has sparked significant concerns within the SEO community. The leaked documents were initially reported by SEO experts Rand Fishkin and Mike King, igniting widespread analysis and discourse. For More Info:- https://news.arihantwebtech.com/search-disrupted-googles-leaked-documents-rock-the-seo-world/
RMD24 | Debunking the non-endemic revenue myth Marvin Vacquier Droop | First ...BBPMedia1
Marvin neemt je in deze presentatie mee in de voordelen van non-endemic advertising op retail media netwerken. Hij brengt ook de uitdagingen in beeld die de markt op dit moment heeft op het gebied van retail media voor niet-leveranciers.
Retail media wordt gezien als het nieuwe advertising-medium en ook mediabureaus richten massaal retail media-afdelingen op. Merken die niet in de betreffende winkel liggen staan ook nog niet in de rij om op de retail media netwerken te adverteren. Marvin belicht de uitdagingen die er zijn om echt aansluiting te vinden op die markt van non-endemic advertising.
Improving profitability for small businessBen Wann
In this comprehensive presentation, we will explore strategies and practical tips for enhancing profitability in small businesses. Tailored to meet the unique challenges faced by small enterprises, this session covers various aspects that directly impact the bottom line. Attendees will learn how to optimize operational efficiency, manage expenses, and increase revenue through innovative marketing and customer engagement techniques.
Premium MEAN Stack Development Solutions for Modern BusinessesSynapseIndia
Stay ahead of the curve with our premium MEAN Stack Development Solutions. Our expert developers utilize MongoDB, Express.js, AngularJS, and Node.js to create modern and responsive web applications. Trust us for cutting-edge solutions that drive your business growth and success.
Know more: https://www.synapseindia.com/technology/mean-stack-development-company.html
VAT Registration Outlined In UAE: Benefits and Requirementsuae taxgpt
Vat Registration is a legal obligation for businesses meeting the threshold requirement, helping companies avoid fines and ramifications. Contact now!
https://viralsocialtrends.com/vat-registration-outlined-in-uae/
Personal Brand Statement:
As an Army veteran dedicated to lifelong learning, I bring a disciplined, strategic mindset to my pursuits. I am constantly expanding my knowledge to innovate and lead effectively. My journey is driven by a commitment to excellence, and to make a meaningful impact in the world.
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
Putting the SPARK into Virtual Training.pptxCynthia Clay
This 60-minute webinar, sponsored by Adobe, was delivered for the Training Mag Network. It explored the five elements of SPARK: Storytelling, Purpose, Action, Relationships, and Kudos. Knowing how to tell a well-structured story is key to building long-term memory. Stating a clear purpose that doesn't take away from the discovery learning process is critical. Ensuring that people move from theory to practical application is imperative. Creating strong social learning is the key to commitment and engagement. Validating and affirming participants' comments is the way to create a positive learning environment.
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A personal brand exploration presentation summarizes an individual's unique qualities and goals, covering strengths, values, passions, and target audience. It helps individuals understand what makes them stand out, their desired image, and how they aim to achieve it.
"𝑩𝑬𝑮𝑼𝑵 𝑾𝑰𝑻𝑯 𝑻𝑱 𝑰𝑺 𝑯𝑨𝑳𝑭 𝑫𝑶𝑵𝑬"
𝐓𝐉 𝐂𝐨𝐦𝐬 (𝐓𝐉 𝐂𝐨𝐦𝐦𝐮𝐧𝐢𝐜𝐚𝐭𝐢𝐨𝐧𝐬) is a professional event agency that includes experts in the event-organizing market in Vietnam, Korea, and ASEAN countries. We provide unlimited types of events from Music concerts, Fan meetings, and Culture festivals to Corporate events, Internal company events, Golf tournaments, MICE events, and Exhibitions.
𝐓𝐉 𝐂𝐨𝐦𝐬 provides unlimited package services including such as Event organizing, Event planning, Event production, Manpower, PR marketing, Design 2D/3D, VIP protocols, Interpreter agency, etc.
Sports events - Golf competitions/billiards competitions/company sports events: dynamic and challenging
⭐ 𝐅𝐞𝐚𝐭𝐮𝐫𝐞𝐝 𝐩𝐫𝐨𝐣𝐞𝐜𝐭𝐬:
➢ 2024 BAEKHYUN [Lonsdaleite] IN HO CHI MINH
➢ SUPER JUNIOR-L.S.S. THE SHOW : Th3ee Guys in HO CHI MINH
➢FreenBecky 1st Fan Meeting in Vietnam
➢CHILDREN ART EXHIBITION 2024: BEYOND BARRIERS
➢ WOW K-Music Festival 2023
➢ Winner [CROSS] Tour in HCM
➢ Super Show 9 in HCM with Super Junior
➢ HCMC - Gyeongsangbuk-do Culture and Tourism Festival
➢ Korean Vietnam Partnership - Fair with LG
➢ Korean President visits Samsung Electronics R&D Center
➢ Vietnam Food Expo with Lotte Wellfood
"𝐄𝐯𝐞𝐫𝐲 𝐞𝐯𝐞𝐧𝐭 𝐢𝐬 𝐚 𝐬𝐭𝐨𝐫𝐲, 𝐚 𝐬𝐩𝐞𝐜𝐢𝐚𝐥 𝐣𝐨𝐮𝐫𝐧𝐞𝐲. 𝐖𝐞 𝐚𝐥𝐰𝐚𝐲𝐬 𝐛𝐞𝐥𝐢𝐞𝐯𝐞 𝐭𝐡𝐚𝐭 𝐬𝐡𝐨𝐫𝐭𝐥𝐲 𝐲𝐨𝐮 𝐰𝐢𝐥𝐥 𝐛𝐞 𝐚 𝐩𝐚𝐫𝐭 𝐨𝐟 𝐨𝐮𝐫 𝐬𝐭𝐨𝐫𝐢𝐞𝐬."
1. Mercedes Benz Case Analysis
Presented By:
Name: Avanish Anil Chippalkatti
PGDM Number: 21129
Presented To:
Prof. Chandan Palaksha
Assignment Questions
1. 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?
Beginning in 1992 Benz has taken many steps that shaped into shifts in strategy. We
will check one by one and provide opinion on how this shift in strategy improve
Mercedes Benz’s competitiveness in the global auto industry:
A. In 1992 November Benz said that they are not going to continue with new
truck plant at Ahrensdorf in eastern Germany. The plant had been intended to
be Europe’s modern truck plant with more than 4000 employees and more
than 4000000 vehicles a year starting in 1994.Because of the sharply
worsening structural problems in the European truck industry and even
because of the over capacity at existing plants.
According to me this was the right decision to drop the plan because
US market was having a good business in trucks and Mercedes was
having a plant in U.S. Here in Germany if they were planning for a
new plant then they should have that demand if there is no demand
why a company will invest so much. This will simply bring lots of
troubles to the company in terms of cost and labor and not going to add
any advantage to the company in terms of competition.
Rather they can focus on current plants and try to innovate the product
and create some demand in the market.
If they get some demand, they can manufacture I current plants and
export or if the demand is more then plan for the new plant near the
sales.
2. B. In 1993 January newly appointed chairman Helmut Werner announced that the
firm would transform itself from a luxury cars automaker into manufacturer of
high-quality vehicles in all segments of the market.
This was a good move by Benz because they were facing competition
by Japanese auto makers and other competitors who were selling
almost similar cars at cheaper price.
As Benz was not at all having manufacturing units in other countries
their price was also high because of which their sales came down.
Rather than only focusing on luxury cars if they provide high quality
vehicles in all segments, they can get more market share and attract
customers.
C. Continuation to the previous announcement to improve the portfolio and
compete in the market Benz developed several new automobiles. 1. Small cars
for mid-market and lifestyle vehicles which had become popular, SUV and
minivan.
After this the plan of global exposure was right and they planned this
to manufacture minivan in Spain and were searching for a new plant
for small cars.
In October 1993 they announced the new plant as Alabama which is a
very small town in Vance US. I think many people would say that this
was a wrong decision because that place was not having any facilities,
but I am sure in the long run it’s good strategic move. Because now
they got the place in very cheap price and even the subsidies worth 200
million from the government.
Cheap labor.
Other infrastructure, water, and electricity they can plan and
implement. The city will be developed in coming days.
There were lots of risk in these new strategies as well:
Competition was the biggest risk.
Labor cost in other developed countries will be more.
Choosing Alabama as new plant where they don’t have any facilities. Building
everything from scratch is a real challenge.
They decided to add more products into their portfolio but adding new products is not
an easy job.
Research and development.
Consumer Analysis.
Pricing.
Conclusion: Even though company was not able to perform the way it wanted I think still the
new strategies will yield good results in long run.
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?
The structure of an organization that allows it to carry out its strategic plan and achieve its
goals is referred to as organizational design.
From the Exhibit 2 we can clearly see that there are some units which are doing good, but
some are not performing well, their Net income is in negative and not making good number
of sales as well. They must focus more on such units to improve by either providing more
support to them or combining them with others, or they can try to drop them and focus on
units which are providing profit.
As Benz has number of products under its portfolio, they can go for below organization
designs:
Divisional Design:
As Benz began to add a variety of new goods, acquire other firms, or grow into other
geographical areas, they divided into divisions. Each division has its own profit and
loss statement as well as a division leader.
The division clarifies the performance of each division for everyone, including
investors. It also implies that if a division fails, it has no effect on the rest of the
organization.
One distinction between a division and a wholly owned subsidiary is that employees
in a subsidiary are not members of the parent organization.
Divisional structures can take many different shapes. Businesses identify them by
market, product, or geography, or they can be part of a matrix of functions and other
business units.
Divisions of Geography:
Operating geographical business units allows a firm to tailor its products and services
to the culture, requirements, and tastes of the host place.
Coordination and control can be difficult to handle. Nonetheless, decision-makers
who are a part of or extremely familiar with the population's culture and tastes can
overcome this.
The benefit is that the firm may extend its worldwide brand presence while still
serving consumers and suppliers in the host nation.
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.
4. The Alabama facility should be on the lookout for an experienced local who is having all the
details about that geographical region and local culture and having experience in operations,
supervisor to assist in the development and implementation of appropriate processes
throughout the Alabama production plant in order to facilitate business growth. He should
also evaluate the plant's operating processes and provide recommendations for how to
enhance them. He should be able to handle projects well and communicate effectively. In
order to excel in this capacity, he must be a competent problem-solver with acute, analytical
thinking. If he is goal-oriented and has strong organisational abilities, he would be an ideal
candidate to lead a new plant.
Requirements
Organizational abilities
Time-management abilities include the capacity to define goals, prioritise work, and develop
schedules—all of which are required for someone to control the daily operations of a
manufacturing facility. Individuals must also have decision-making abilities to make
decisions on plant objectives, resources, and recruiting. Because they frequently work alone,
they must be self-motivated and able to focus. A person must also be organised to keep
records and establish an atmosphere that fosters productivity.
Leadership abilities
You must be able to motivate people, promote employee self-esteem and confidence, and
create a favourable work atmosphere. Communication abilities, such as making presentations
or public speaking, are also necessary.
Technical abilities
This category covers computer skills, math skills, design skills, financial skills, and
operations skills. You must have a thorough grasp of financial principles and accounting to
generate budgets and evaluate detailed financial data for a manufacturing unit.
Interpersonal abilities
He must be able to communicate effectively to provide employees and supervisors with
precise and explicit instructions. To comprehend how a message is received, they must
practise active listening and be able to read nonverbal signs such as facial expressions and
body language.
Other Requirements:
Previous experience as an operations supervisor or similar role
Hands-on experience implementing operational processes
Excellent project management skills
Knowledge of operational principles and policies
A degree in operations management or business administration
5. Responsibilities:
Active participation in business strategy planning and decision-making setting for
multiple business functions.
Research strategies to continue improving operations and cut costs.
Screen and document on divisional performance.
Monitoring and supervising and develop staff.
Provide assistance and support.
Ensuring adherence to management policies and regulations
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 a
reciprocal 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
system that Germans have worked hard to build. How would you reply?
The primary reason for our decision to export the work is to ensure our worldwide survival in
the automobile industry. The competitiveness in the vehicle industry has grown throughout
the years. Japanese and European enterprises are gaining market share. Our revenue comes
from passenger cars and commercial vehicles. If we look at our recent sales (1993), our
passenger vehicle sales have declined by 39 percent in terms of units from 153738 in 1992 to
94500, and commercial vehicle sales have decreased by 27 percent. Toyota's Lexus, Nissan's
Infiniti, and Honda's Acura are gaining market share by offering comparable quality vehicles
at cheaper rates than we do. These businesses have reduced production costs.
1. Labor expense: When compared to nations in Europe, Asia, and the United States, our
country has the highest hourly labor cost. Furthermore, the overall weekly working hours are
lower than in other countries. This drastically raises our production costs.
2. Car Import Tax: - In the United States, the government imposes a 10% tax on automobiles
imported from other nations that cost more than $30,000. This added expense raises the price
of our vehicles, making them unaffordable.
6. 3. If we produce our automobiles in Germany, we will not have a global footprint and will be
unable to grow our business. As a result, income generation would be constrained as
production costs rise and taxes on exporting and importing rise.
4. If we decide to build factories in Germany to increase production since we already have
many rivals and our sales are declining, we may incur a loss, and the only way to balance this
is to lay off employees. This causes unemployment and has an influence on our economy.
5. By expanding our worldwide footprint, we will not only be able to cut our automobile
production costs, but we will also be able to tap into diverse markets in other nations,
resulting in increased sales. Then we might reconsider the Ahrensdorf assembly factory in the
country's east.