The document is a cover sheet and introduction for a student paper analyzing the internationalization strategy of Daimler Mercedes-Benz's automotive industry. It includes the student's name and program information, as well as a table of contents for the paper. The introduction provides background on Daimler, outlines Lafley and Martin's Playing to Win model that will be used to structure the analysis, and previews the key questions that will be answered about Daimler's strategy according to the model's framework.

1. Rachael O’BryanMBA 2014-2015 Managing Globally 1 | P a g e
Submission coversheet- Individual’s work
AshridgeMBA Programme
StudentName: Rachael O’Bryan
Programme [part-time or full-time MBA]:Full-time MBA
Assignment: Managing Globally
Title of Assignment:Daimler Mercedes-BenzAutomotive Industry InternationalizationStrategy
SubmissionDue Date[DD/MM/YYYY]: 09/03/2015
Word Count:2,044 words
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(Including:mainbodyof text,executive summary(ies), footnotes,captionsfortablesandfigures,
citationsorsimilar)
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Date Submitted[DD/MM/YYYY]:10/03/2015

2. Rachael O’BryanMBA 2014-2015 Managing Globally 2 | P a g e
Managing Globally
Daimler Mercedes-BenzAutomotive Industry
InternationalizationStrategy
March 2015
RachaelO’Bryan, Full-Time MBA Student 2014-2015
Managing Globally Module, Professor Marc Jones and Jean van Hoegaerden
2,044 words (+/- 10%)

3. Rachael O’BryanMBA 2014-2015 Managing Globally 3 | P a g e
Table of Contents
1. Introduction to Daimler Pg.4
2. Mercedes-Benz Strategy- What is their winning aspiration? Pg.5
2.1 Daimler’s Stated Strategy
3. Strategy Context- Where will they play, & how will they win? Pg.5
3.1 Global Market for Automotive Industry
3.2 Trends for the Automotive Industry
3.3 Market Entry Modes of Daimler Mercedes Benz
3.4 Drivers of Globalization
3.5 Strategic Sweet Spot
4. Strategy Context- Capabilities & what mgmt. systems are required? Pg.10
4.1 Resources & Capabilities
4.2 Support Systems
5. Conclusion and Recommendations Pg.11
6. References Pg.12
7. Appendices Pg.13

4. Rachael O’BryanMBA 2014-2015 Managing Globally 4 | P a g e
1. Introduction to Daimler
Daimler is of the world’s most successfulautomotive companies. The company’s founders, Gottlieb
Daimler and Carl Benz, made history with the invention of the automobile in the year 1886. With its
divisions of Mercedes-Benz Cars,Daimler Trucks, Mercedes-Benz Vans,Daimler Buses and Daimler
Financial Services, the Daimler Group is one of the biggest producers of premium cars and the world’s
biggest manufacturer of commercial vehicles with a global reach. Daimler sells its vehicles and services
in nearly all the countries of the world and has production facilities on five continents. Its current brand
portfolio includes, Mercedes-Benz, Smart, Freightliner, Western Star,BharatBenz, Fuso, Setra and
Thomas Built Buses. The company is listed on the stock exchanges of Frankfurt and Stuttgart (stock
exchange symbol DAI). In 2013, the Group sold 2.3 million vehicles and employed a workforce of
275,000 people; revenue totaled €118 billion and EBIT amounted to €10.8 billion (Daimler, 2015).
Below, in Figure 1.1, you will find Lafley & Martin’s Playing to Win Model. It is an integrated set of
choices that uniquely positions the firm in its industry, so as to create sustainable advantage and superior
value relative to the competition (Lafley & Martin, 2013). It starts with the purpose of the enterprise, its
motivating aspiration. Secondly, it focuses on a playing field where you can achieve that position. Third,
about the way you will win on the chosen playing field. Fourth, the set and configuration of capabilities
required to win in the chosen way. And finally, the systems and measures that enable the capabilities and
support the choices. The paper is positioned to answer these five key questions for Daimler.
Figure 1.1 An Integrated Cascade of Choices (Lafley & Martin, 2013)
What is our
winning
aspiration?
Where will we
play?
What
management
systems are
required?
What
capabilities
must be in
place?
How will we
win?

5. Rachael O’BryanMBA 2014-2015 Managing Globally 5 | P a g e
2. Daimler Mercedes-Benz Strategy-What is the winning Aspiration?
2.1 Daimler’s stated strategy
There are 4 elements to Daimler and Daimler Mercedes-Benz stated strategy (Daimler Annual Report,
2013):
1) Further strengthen the core business
2) Grow in new markets
3) Take the lead with “green” technologies and safety
4) Lead the way with the development of new mobility concepts and services
Figure 2.1.1 Daimler's StrategicPillars of Growth (Daimler,2013)
3. Strategic Context- Where will we play & how will we win?
3.1 The Global Market for the Automotive Industry
IHS Automotive, part of IHS Inc. (NYSE:IHS), forecasts global automotive sales for 2015 to reach 88.6
million, an increase of 2.4 percent over 2014, continuing an unbroken five-year run of sales recovery and
growth from the low point set in the depth of the Great Recession in 2009. The 2 countries that will see
the biggest growth in 2015 are the United States and China. China will lead the sector’s volume growth
with light vehicle sales to grow by 7 percent in 2015 to 25.2 million units, aided with increased auto
finance penetration, fast dealership expansion and government vehicle scrappage programs. IHS expects
premium vehicles in China to top two million units in 2015 with year-over-year growth of 15 percent.
Since 2007, China is the country with the largest manufacturing of automobiles in the world and since
2010 it is also the country with the largest manufacturing of passenger cars. The figures show that global
demand for premium cars remains healthy as the U.S. economy recovers and more people in China can
afford to buy high-end products (Culver, 2015).

6. Rachael O’BryanMBA 2014-2015 Managing Globally 6 | P a g e
In December 2014, car sales increased in all major regions of the world with growth fastest in China,
India and the USA. Europe had a positive year with the market in the EU expanding for the first time in
seven years. In 2014, Mercedes Benz had it fourth consecutive record year with worldwide sales
increasing by 12.9% to 1,650,010 deliveries. In December 2014, Mercedes Benz sold 163,171 cars – its
highest single month total ever. The USA remained the most important single-country market for
Mercedes Benz. Sales in the US increased by 5.7% in 2014 with 330,391 deliveries. In China, Mercedes
Benz enjoyed the strongest growth of the German luxury carmakers with sales increasing by 29.1% to
281,588 deliveries. In 2014, China overtook Germany as the second most-important market for Mercedes
Benz car sales. (Bekker,2015).
Figure 3.1.1 and 3.1.2 below represents the premium vehicle segment, in terms of units expected to be
sold, and where they’re expected to be sold. As noticed, China will be leading the way.
Figure 3.1.1 Global Insight to Worldwide Premium Segment (Fatprophet, 2013)
Figure 3.1.2 World’sLargestPremiumCar Markets(FinancialTimes,2013)

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3.2 Trends for the Automotive Industry
The trends today for the automotive industry are critical factors for driving growth and development in
this sector. Shifts in demographics, economic power, climate change, urbanization, and innovations in
technology are the main key factors that the automotive industry is focusing on. Global spending power
and population growth is occurring in the emerging markets (Dixon, 2015).
Table 3.2.1 lists past, present, and future trends in the automotive industry. A further analysis is depicted
in Appendix 1.
Five-Ten Years Ago Today Five-Ten Years from Now
 Higher prices for
consumer electronics
 More expensive oil
prices
 Cost cutting (ex.
identifying waste in fleet
operations)due to the
recession,where people
were keeping their cars
longer
(Dixon, 2015)
 Global Urbanization
(integrated mobility solutions
such as car sharing, etc.)
 Highest focus on investments
for innovation of new
technologies in vehicles
 Decline of new “Green”
vehicle sales due to decrease
in oil prices
 Governments giving huge
incentives to electric car
buyers.Ex. Denmark &
Israel
 Focus on China & BRIKT
 Increase in engines &
vehicle fuel efficiency
using petrol & diesel (will
cut 1/3 emissions by 2020)
 Diesel powered cars equal
50% of all cars on the road
by 2020
 Battery powered vehicles
to equal 10% of the market
by 2020
 Giant leap in efficiency of
new trucks (currently use
12% of all oil consumed in
the U.S.)
 Autonomous Cars in 2020
3.3. Market Entry Modes
Table 3.2.1 (Author, template from Bartlett, Christopher 1998)
3.3.1 Market Entry Modes (Jones, 2015)

8. Rachael O’BryanMBA 2014-2015 Managing Globally 8 | P a g e
Daimler Mercedes-Benz is spread across the board. They happen to be engaged in wholly-owned
subsidiaries, joint ventures, and franchising throughout China, USA, South America, South Africa,&
Europe to name a few.
In In February 2013, Daimler acquired a 12% stake in Beijing Automotive Industry Holding Co Ltd
(BAIC) becoming the first western car manufacturer to own a stake in a Chinese company. Beijing Benz
Automotive Co., Ltd. (BBAC),a joint venture between Daimler and its Chinese partner BAIC,
commenced local production of Mercedes-Benz passenger cars in Beijing. Since 2013, the engine plant
production, and launch of the E-Class and C-Class cars for the Chinese Market have been produced in
China (Daimler worldwide, 2015).
Appendix 2 further lists other entry modes that Daimler Mercedes-Benz is a part of.
3.4 Drivers of Globalization
Jeannet identifies six ‘global logic’ dimensions as the drivers of globalization for an industry or sector:
customer, purchasing, information, competitive, industry, size or scale and regulatory logic (Jeannet,
Jean-Pierre 2000). Figure 3.4.1 outlines Daimler Mercedes-Benz scale on global logic dimensions.
Customers are placed as a 6 on the scale because customers from around the world have similar needs,
particularly in the premium market, but where it differentiates is in cultural specificities and climate. The
quality of the road infrastructure is different. For example, the prestige of the brand and the Mercedes-
Benz build is similar around the world, and appeals to similar people. Smaller cars dominate the market in
Europe, whereas in the U.S.A. and Middle East, SUV’s and other larger vehicles are more popular.
Information is placed as a 10 because information about the car market, technology, and emerging trends
is available globally. Mercedes-Benz is very well known for getting the recognition of the brand out there,
and making it available around the world.
0
2
4
6
8
10
Customer
Competition
Industry
Global Scale
Economies
Regulatory
Purchasing
Information
Global Logics Spiderweb
Global Logics
Spiderweb
3.4.1 Global Logics Spiderweb (Jeannet, 2000)

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Global scale economies are placed a 7. Recently, Daimler chose Mexico as the fifth country outside
Germany to manufacture Mercedes Benz models. Economies of scale is one of the attributes that the
company found in the country to raise the profit margin of its sales in America. The strategy was then
added production of their models with the brand Infiniti to generate a volume of 300 thousand units per
year so they can cut costs (Romero, 2014).
Industry logic is placed as a 9 because the success factors of Mercedes Benz’s brand values and products
are the same globally. The rationale for this would be that success worldwide depends on delivering on
cost, delivery, and product quality.
Competitors are a 9 because Mercedes Benz runs up against the same competitors in almost all territories
worldwide. Mercedes-Benz has always been known to have two major competitors, who are BMW and
Audi.
3.5 Strategic Sweet Spot- Daimler’s Capabilities
The strategic sweet spot of a company is where it meets customer’s needs in a way that rival’s cant,given
the context in which it competes (Collis & Rukstad, 2008). If first focusing on customer’s needs and
wants for Mercedes-Benz,one thing is for certain, it’s luxury, class, precision, and exceptionalism that
they’re looking for.
Mercedes-Benz capabilities seem endless. Mercedes Benz has a strong brand value and global leader in
premium cars. The company has a lack of capital constraints, a leader in innovation with more than $12
billion allocated for R&D to build the brand image even further, and is manufactured and assembled in
over 20 countries across the world (Zetsche,2013).
In terms of Mercedes-Benz top competitor’s offerings, BMW and Audi both demonstrate the same
dedication to German engineering, precision & exceptionalism, I believe their contrast is most evident per
the audience the brands target. BMW is known as the ultimate driving machine, with their focus clearly
on performance. BMW appeals to more of the aggressive, and dynamic driver. Audi is “sporty,
COMPETITORS
Offerings
CUSTOMERS
Needs
COMPANY’S
Capabilities
Context (technology, industry,
demographics, regulation, and so on)
Strategic Sweet Spot (Jones, 2015)

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sophisticated, & progressive” and is a technology leader. BMW and Audi, in my opinion, are in more of a
direct competition with each other than Mercedes-Benz.
The ultimate sweet-spot for Mercedes Benz would be the fact that Mercedes presents itself as the luxury
model for those less interested in bite, but more so in class. There is still an element of prestige and
exclusivity in Mercedes. For example - When I stop to profile the average Benz driver, I envision an older
business owner cruising down the street and enjoying the luxury that is MB. Mercedes Motto – Das beste
oder nichts = the best or nothing. Another sweet spot for Mercedes-Benz is the fact that it’s cheaper to fix
and maintain than Audi and BMW. Audi consistently came out on top, at an average 31% higher than for
Mercedes maintenance and repairs. BMW sat a little above Mercedes,but still 19% below Audi (Mirror
Online, 2014).
4. Strategy Context- What capabilities must be in place?
4.1 Daimler’s Resources & Capabilities
In figure 4.1.1 is Mercedes-Benz Target System from its Annual Report 2013. In 2010, sustainability was
incorporated into the strategic target system, thereby formally confirming its great importance for
Daimler’s business operations. The Daimler target system brings together six strategic dimensions which
are considered to be of key importance for achieving their overarching goal: to post profitable growth and
sustainably increase to the company’s value. These efforts are based on four values: Passion, Respect,
Integrity, and Discipline, and this forms the basis of their actions and helps the company to achieve its
goals (Zetsche,2013). This competitive architecture is rooted in their values through to their competitive
position, which all enables them to achieve profitable growth.
Figure 4.1.1 Daimler Mercedes Benz Target System (Daimler Annual Report, 2013)

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4.2 Support Systems
Because Daimler Mercedes-Benz has such a big, global presence,the systems in place must first start out
on their corporate HQ level, and then funnel down to the rest of the world. Daimler is particularly
interested in aligning the Daimler Corporate Governance system internationally and making it transparent
(Daimler, 2015). According to the 2013 Daimler Annual Global Report, figure 4.1.1 Daimler Mercedes
Target System is the structure used to follow their deeply rooted values to profitable success.
5. Conclusion and Recommendations
On the basis of the analysis, Daimler Mercedes-Benz has an appropriate strategy. The company is
effectively developing their brands, and taking measures to increase efficiency and competitiveness in the
market. They also focused on emerging markets in China and the BRIC countries, and were the first ever
Western car manufacturer to enter the market in China. The company is only continuing to grow.
Daimler should continue to focus on protecting and building its reputation. To build on this strategy and
mitigate risks going forward, Daimler should continue to build local presence and relationships with
emerging markets to capitalize on the increase in premium car sales over the next 5 years in those
markets.

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References
AK,S. (2014). Connected carmarketto surpassUS$131.9 billion by 2019: Transparency marketresearch.
Retrieved03/06,2015, from http://www.prnewswire.com/news-releases/connected-car-market-to-
surpass-us1319-billion-by-2019-transparency-market-research-279934152.html
Bartlett,C.A.,& Ghoshal,S.(1998). Managing AcrossBorders:TheTransnationalSolution (2nd
Ed.)
London:randomHouse BusinessBooks.
Bekker,H.(2015). 2015 (January) international:Worldwidecarsales. Retrieved03/06,2015, from
http://www.best-selling-cars.com/
Booz&Company.(2015). Automotiveperspective
2015.http://www.strategyand.pwc.com/media/file/Automotive-perspective-2015.pdf
Collis,DavidJ.,&Rukstad,Michael.(2008). Can You Say WhatYour Strategy Is?(1st
ed.,page 89)
Harvard BusinessReview
Culver,M.(2015). Slower,not lower:IHS automotiveforecasting 88.6million unitglobal light vehicle
marketin 2015. Retrieved03/06,2015, from
http://www.businesswire.com/news/home/20150202005123/en/Slower-IHS-Automotive-Forecasting-
88.6-Million-Unit#.VPnIxS6jBnB
Dixon,P.(2015). Future of the automotiveindustry (auto trends).Retrieved03/06, 2015, from
http://www.globalchange.com/future-of-the-automotive-industry-auto-trends.htm
FatProphets.(2013). The WorldwidePremium CarSegmentis Expected to Grow. Retrieved03/06,2015
Hanna, R.,Unfried,A.& Ostermann,D.(2015). Megatrendsdriving theautomotiveindustry. Retrieved
03/06, 2015, fromhttp://www.pwc.com/gx/en/automotive/issues-trends/megatrends-driving-the-
automotive-industry.jhtml
Jeannet,J.(2000). Managing witha global mindset.InHarlow:FinancialTimesPrentice Hall (Ed.),(pp.
pg.70-74)
Jones,M. StrategicSweetSpotModel;MBS-MT ElizaExecutive Education.
Jones,M. Globalisation Strategies:MarketEntry ModesModel
Lafey,A.G., & Martin, R. (2013). What strategyis(andisn't). Playing to win: How strategy really works
(1st ed.,pp.pg.14-16). Boston,MA: Harvard BusinessSchool Publishing.
Romero,E. (2015) Mercedes-BenzManufacturingMovesto Mexico.Retrieved03/09,2015, from
http://www.global-recruiters.com/mercedes-benz-manufacturing-moves-to-mexico/
Waldmeir,P.(2013). Luxury carmakersin china digital drive. Retrieved03/06,2015, from
http://www.ft.com/cms/s/0/4446fd74-8c5b-11e2-b001-00144feabdc0.html#axzz3Qnc0KUpZ
Zetsche,D.(2014). Daimler annualreport2013. Retrieved03/06, 2015, from
http://ar2013.daimler.com/to-our-shareholders/objectives-and-strategy

13. Rachael O’BryanMBA 2014-2015 Managing Globally 13 | P a g e
Appendix1- Trendsin the Automotive Industry
Five-Ten Years Ago Today Five-Ten Years from Now
 Higher prices for
consumer electronics
 More expensive oil
prices
 Cost cutting (ex.
identifying waste in fleet
operations)due to the
recession,where people
were keeping their cars
longer
(Dixon, 2015)
 Global Urbanization
(integrated mobility solutions
such as car sharing, etc.)
 Highest focus on investments
for innovation of new
technologies in vehicles
 Decline of new “Green”
vehicle sales due to decrease
in oil prices
 Governments giving huge
incentives to electric car
buyers.Ex. Denmark &
Israel
 Focus on China & BRIKT
 Increase in engines &
vehicle fuel efficiency
using petrol & diesel (will
cut 1/3 emissions by 2020)
 Diesel powered cars equal
50% of all cars on the road
by 2020
 Battery powered vehicles
to equal 10% of the market
by 2020
 Giant leap in efficiency of
new trucks (currently use
12% of all oil consumed in
the U.S.)
 Autonomous Cars in 2020
Today, almost half of the world’s population lives in cities. Current estimates suggest that world carbon
emissions from burning fossil fuels – coal, oil and gas – will rise by 16% between now and 2030. Over
the same period, the average global temperature will increase by between 0.5°C and 1.5°C (Hanna;
Unfried; Oysterman, 2015).
The cost of electronics are down 20% from just 10 years ago. Electronics contribute over 90% of
innovations and new features (Booz&Company, 2014). Electric vehicles are one of the most important
ways to reduce motoring costs, reduce carbon use in transport, improve air quality and reduce global
warming. Expect battery-powered vehicles to be 10% of the market by 2020. Much of government
economic stimulus packages for the auto industry have been linked to green tech, of which a huge
proportion is things like battery technology (Dixon, 2015).
Regulation is a major driver of the industry. In many countries, government has imposed strict
environmental regulations, such as fuel economy and emissions standards. There is also a consolidation of
suppliers, meaning there are smaller numbers of larger global players. OEMs are increasing model choice
while decreasing vehicle architecture. Finally, there are a greater number of customers utilizing online. In
summary, these key trends indicate what the automotive industry focuses on (Dixon, 2015).

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Appendix 2- Further Market Entry Modes
Because of the need for greater production capacity in the U.S, Mercedes-Benz is moving production of
the R-Class from its Tuscaloosa, Ala. plant to AM General's Commercial Assembly Plant in Indiana. Just
in January of 2015, Mercedes-Benz has selected AM Generalto manufacture the Mercedes-Benz R-Class
luxury vehicle. Under the multi-year agreement, AM General becomes Mercedes-Benz's first and only
contract manufacturing operator in the U.S. (Adams, 2015). http://www.prnewswire.com/news-
releases/am-general-selected-as-mercedes-benz-first-and-only-contract-manufacturer-of-vehicles-in-the-
united-states-300026208.html
Daimler has had a permanent presence in Brazil with its wholly-owned subsidiary Mercedes-Benz do
Brasil since 1956 and has established itself as a leading commercial vehicle manufacturer in Latin
America. Also, Mercedes-Benz South Africa (MBSA) is a wholly-owned subsidiary of the global
company, Daimler AG. The company acquired a manufacturing plant in East London which has been
building vehicles in South Africa for over 60 years. Today MBSA manufactures Mercedes-Benz C-Class
cars, commercial vehicles and buses, as well as assembly of Freightliner trucks, a leading American
brand. MBSA`s headquarters,marketing and support divisions are located in Zwartkop, Gauteng, from
where the Mercedes-Benz,smart, Freightliner, Western Star and FUSO products are marketed and
financed (Daimler Mercedes-Benz,2014). Below, in chart 3.3.2, details the wholly-owned subsidiary
group structure. http://www.mercedes-benzsa.co.za/corporate-structure/mercedes-benz-south-africa/
3.3.2 Daimler Mercedes-Benz South Africa Wholly-Owned subsidiary Group Structure (Daimler Mercedes-Benz, 2014)