Mercedes Benz Marketing Strategy Analysis

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Table of Contents

  • 1.0 Introduction
  • 2.0 Marketing environment Analysis
    • 2.1 PESTLE Analysis
      • 2.1.1. Political factors
      • 2.1.2 Economic Factors
      • 2.1.3 Socio – cultural Factors
      • 2.1.4 Technological Factors
      • 2.1.5 Legal Factors
      • 2.1.6 Environmental Factors
    • 2.2 SWOT Analysis
  • 3.0 Strategic Implications of Mercedes-Benz as per Environmental Analysis
    • 3.1 Strategic Mission of Mercedes-Benz
    • 3.2 Strategic Market Orientation
    • 3.3 Strategic Market Planning
      • 3.3.1. Present Status of the Organization
      • 3.3.2 Desired Future Position
      • 3.3.3 Strategic Movement to Achieve the Desired Future Position
      • 3.3.4 Evaluation of the implications of Strategic Decisions
  • 4.0 Competitive Strategic Analysis and Evaluation Between Mercedes-Benz and BMW
    • 4.1 Comparative analysis of the Strategic mission
    • 4.2 Comparative Analysis of Customer Segmentation and targeting Strategy
    • 4.3 Comparative Analysis of Business Strategies
    • 4.4 Relative Effectiveness of the Strategies
  • 5.0 Product/Market Growth & Marketing Strategies
    • 5.1 Porter’s generic strategic model
    • 5.2 Ansoff’s matrix
      • 5.2.1 Product development
      • 5.2.2 Market development
  • 5.3 Marketing Mix
    • 5.3.1 Products
    • 5.3.2 Price
    • 5.3.3 Place
    • 5.3.4 Promotion
    • 5.3.5 Physical Evidence
    • 5.3.6 Process
    • 5.3.7 People
  • 7.0 Conclusion
  • Appendix A
  • Reference List

1.0  Introduction

The purpose of the report is to evaluate the marketing strategy adopted by Mercedes-Benz to achieve the current and future objectives of the organization. The study consists of the examination of the external market and also of the company’s internal strengths and weaknesses in the market. It also discusses the opportunities of the company in the current market environment and also the threats it may face from its competitors and the external business environment. The marketing strategy and the marketing mix adopted by Mercedes-Benz has also been critically analysed in the report.

Mercedes Benz Marketing Strategy Analysis

Mercedes-Benz is a famous German Brand of automobiles, created by the merger between Daimler-Motoren-Gesellschaft (DMG) and Benz & Cie. in 1926. This event marked the birth of a new car brand to hold on to the tradition of the two oldest car manufacturers of the world and also to ensure a successful future for both the companies. The trademark of Mercedes-Benz represents the value of innovation, quality, awareness for tradition and performance (Daimler AG, 2015a). The enterprise is headquartered in Stuttgart, Germany.  The enterprise focuses on the manufacturing of luxury vehicles, trucks, passenger vehicles and buses. The Mercedes-AMG has been awarded the ‘Engine of the Year Awards 2015” which demonstrates the company’s expertise in the development and production of high performance engines (Daimler AG, 2015b). Mercedes-Benz won at the “World Car Awards” awards in 2015 for three consecutive times whereas the Mercedes-Benz C-Class won the “World Car of the Year 2015 Award”. This represents the tremendous popularity of the brand among its consumers (Daimler AG, 2015b).

2.0 Mercedes Benz Marketing Environment Analysis

In order to evaluate the macro environment in which the enterprise operates, Pestle Analysis has been conducted. This analysis will evaluate the trend and dynamics of the industry of Mercedes-Benz.

2.1 Mercedes Benz PESTLE Analysis

2.1.1. Political Factors

The government of Germany highly stable which facilitates the business environment of the nation. Germany’s recent coalition government is in the process of altering the successful reforms in well-meaning labour market measures, but this may affect the future investment in the German automobile sector. It is a high wage country with respect to the automobile industry. The government’s energy policy also affects the other industries which act as suppliers to the automobile industry such as the metal industry. The government also needs to design a sound educational policy as Germany is dependent on its human capital due to the lack of natural resources. However, the German government also takes steps to boost the automobile industry such as providing financial assistance including measures like loan guarantees and tax reliefs. Being located at the heart of the European Union, the nation enjoys a special benefit to exist in peace and harmony with its neighbours.

2.1.2 Economic Factors

The Eurozone crisis which affected the European states towards the end of 2009 has left the economy of Germany in a stagnant state. Since 2000, its GDP growth ranks 13th among the 18 Eurozone countries. The productivity growth of Germany has been averaged only to 0.9 % per year in the last decade. Though the company experienced a very strong export growth, exports has fallen because demand for automobiles from China has declined and the economies of Southern Europe has crashed. This slowdown in the whole European nations affected its most important automobile industry. Households have been trying to cut off their expenses and thus it is difficult for the automobile sector to increase its sales in the domestic as well as the surrounding economies (The European, 2014).

2.1.3 Socio- Cultural Factors

 The socio-cultural factors that influence the operations of the company in the market are the age, gender and the income of the population. Mercedes –Benz specialises in the production of luxury cars and thus targets the middle aged population. The median age of the population of Germany is 46.3 and has been increasing over the years (Worldometers.info, 2015). As a result, the company has a growing domestic market as the middle aged population has the capability to afford high priced cars manufactured by Mercedes-Benz. Thus, the company also targets the high income groups of the country. The GDP per capita of Germany has been rising till 2009. However, after the crisis affected the region, the GDP per capita has been fluctuating in the recent years (The World Bank Group, 2015).

2.1.4 Technological Factors 

The nation is recognized worldwide for its exceptional automotive industry and its superiority in engineering. German cars symbolize highly cherished values of quality, innovation, safety and design (The European, 2014).The nation’s world class research and development infrastructure, integration of industry value chain and highly skilled workforce creates a global unparallel automotive environment. This enables the automobile manufactures to develop technologies, which fulfils the desires and needs of the consumers and address the future mobility needs. Germany’s automotive industry leads the world in as an industry innovator with a major portion of turnover being generated from the new product innovations. Presence of complete industry value chains ensures that new and innovative products are made according to the highest possible technological standards. German Automobile manufacturers also emphasize on the safety conditions incorporated within a vehicle (Heymann, 2014).

2.1.5 Legal Factors:

Since the organization has international presence, it needs to remain committed to legal standards around the world. These include the various taxes and other regulation of the government in the automobile industry.

2.1.6 Environmental Factors:

One of the reasons of the emission of pollution in the world is road traffic. As an automobile maker, the organization needs to adhere to the various environmental laws at different production and sales region.

 2.2 Mercedes Benz SWOT Analysis 

Mercedes Benz SWOT Analysis

(Refer to Appendix A for elaborated information of SWOT analysis of Mercedes-Benz)

3.0 Strategic Implications of Mercedes-Benz as per Environmental Analysis

3.1 Strategic Mission of Mercedes-Benz

The proper internal and external environmental analysis has allowed Mercedes Benz’s to structure its mission statement which indicates the future mobility of the organisation in a sustainable and safe way along with exceptional products and services and trend-setting technologies. The goal of the organization is to become the global leader in innovation and technology, inspire customers and spread its business equipped with well-trained and skilled employees (Daimler AG, 2014).

3.2 Strategic Market Orientation

There are various costs and benefits associated with the strategic market orientation of the organization. Customer focus is one of the key features of market orientation strategy of Mercedes-Benz which influence them to concentrate more on developing and producing products that not only meet customer needs, but do so in a timely manner. It assists them to stay ahead in the competition in marketplace responsiveness (Kumar et al., 2011).

One of the major objectives of the enterprise is to create added value to the customers. Mercedes-Benz aims at reaching the top position in all the criteria of customer satisfaction by employing innovative ways to engage with the customers in order to understand their needs and preferences and thus design new products based on customer feedbacks and suggestions. For this purpose, Mercedes-Benz has designed new interfaces for sales and service processes to maintain contact with their customers all the time and also deliver customized mobility and transport services. Thus Mercedes-Benz is found to have a high degree of market focus (Daimler AG, 2014).

3.3 Strategic Market Planning

The market planning is the process of evaluating the strength, resources and opportunities to set objectives, developing strategies and establishing guidelines which can assist the organisation to eliminate the threats of the external environment while minimising the internal weaknesses (Boone and Kurtz, 2011).

3.3.1. Present Status of the Organization:

The past year has been successful for the organization as its unit sales and revenue has increased and there were considerable increase in the profitability of the organization. The enterprise has also determined higher standards than its competitors in safety and environmental compatibility of its automobiles (Daimler AG, 2014).

3.3.2 Desired Future Position:

The organization aims at further growth in its profits and improvement in the efficiency of the processes. The future targets of the enterprise are to strengthen the core business, expand in new markets, being the foremost in green technologies and safety and move ahead with mobility and connectivity ideas (Daimler AG, 2014).

3.3.3 Strategic Movement to Achieve the Desired Future Position:

In order to reinforce the core business of the enterprise and make the customer focus stronger, the company is aligning its organizational structure more robustly with individual divisions and integrating sales and service actions to provide high quality service to customers. Their strategic movement has influenced to launch 30 innovative car models between 2012 and 2020. They have future growth strategy to expand in emerging markets such as Brazil, India, China, Russia and others. In order to make the future of mobility safe and sustainable, the enterprise has manufactured a huge range of optimized internal combustion engines, hybrid drives and locally emission free driving solutions. The company aims to reduce the CO2 emission in the European Union to 125g/km by 2016 (Daimler AG, 2014).

3.3.4 Evaluation of the implications of Strategic Decisions:

Mercedes-Benz has already launched two of the new models in 2014 named GLA Coupe and the long-wheelbase C-Class for the market in China. The enterprise has deepened its local activities in China, Brazil and India to reach the sales target in the Car division of Mercedes-Benz. It has also expanded its network of dealer in the Chinese Market and also established its largest training center for car dealership employees. The enterprise was successful in reducing the CO2 emissions from Mercedes-Benz cars which are newly registered in the European Union to an average of 129g/km (Daimler AG, 2014).The company is exploring the opportunities provided by digital technology by expanding the spectrum of mobility services and by expanding its innovative services through the enhanced digitization and networking (Daimler AG, 2014).

4.0 Competitive Strategic Analysis and Evaluation Between Mercedes-Benz and BMW

Bayerische Motoren Werke AG (BMW) is one of the closest competitors of Mercedes-Benz. BMW is a German automobile company which was founded in 1916. This group has produced almost 1,845,186 automobiles as well as 117,109 motorcycles. The organisation can be considered as one of the biggest competitors of Mercedes-Benz in terms of product innovation, market segmentation, targeting and positioning and marketing and selling strategies (Tay, 2003). Below is the comparison of between BMW and Mercedes Benz Marketing Strategies;

4.1 Comparative Analysis of the Strategic Mission

Mercedes Benz           BMW
According to the mission of the organization the competitive strategy of the organization is targeted to shape futuristic technology to the existing product. The organization is obliged and inspired to introduce ground breaking technologies as well as high quality products.The strategic mission of BMW is also focused towards providing futuristic technologies in terms of their products and services. Along with this competitive strategy the mission of the organization also describes their strategic movement to become the leading provider of premium products and services across the globe.

(Source: Connaughton and Madsen, 2001)

4.2 Comparative Analysis of Customer Segmentation and Targeting Strategy

Mercedes BenzBMW
  • This brand of automobile tends to segment and target the customer base as per their income and social status. The organization generally tends to target wealthy consumers.
  • The competitive strategy of the organization influences them to target middle to higher income population including male and female consumers.
  • The organization offers cars for every desire to their diversified consumer bases.
  • The targeted consumers are mainly consists of middle aged population.
  • Similar to Mercedes Benz, BMW also focuses on segmenting and targeting the premium consumers with high social and income status as well as desire for latest technologies.
  • BMW on the other hand, mainly targets the higher income population.
  • The design and offerings of their automobiles mainly serves the stylish and sporty desires of the consumers.
  • The targeted consumers of the organization are mainly young population and entrepreneur.

 

4.3 Comparative Analysis of Business Strategies

Competitive strategiesMercedes Benz           BMW
Innovation and product development strategyThe organization has taken the lead in the market with its green technology. This technology has allowed the organization to focus on their competitive strategy with emission free, hybrid and efficient combust engine vehicles. Therefore, it has allowed them to increase safety and sustainability within their products.The organization has focused on developing M-division cars which allows them to introduce innovative ranges of products. These products have fulfilled their competitive strategies to serve the need of high performing and innovative cars.
Improvement of efficiencyThe competitive strategy of Mercedes Benz is mainly targeted towards strengthening their core business along with introducing efficiency strategy. Their competitive strategy is focused on expanding and renewing their model ranges.The efficient dynamics strategy of BMW is targeted to increase the efficiencies of their vehicle across the world. This strategy has allowed the organization to introduce more that 1,000,000 cars across the world with fuel saving technologies.
Consumer target and pricing strategyThe organization is targeted to the premium segment of consumers while they are also introducing products for middle as well as upper middle class populations. They have also taken strategic decision to reduce the prices of some of their product ranges such as Class A to attract the younger consumers. The organization has also expanded their products to new mobility ranges such as car2go and charterWay.The business strategy of the organization is focused on premium segment of consumers only. They generally high performing cars for their targeted consumers. The high performance and iconic products of the organization highlights the higher lifestyle of the consumers. Therefore, they offer premium pricing strategy to their consumers.
Market communication strategyMercedes Benz has utilized various social media sites as well as other digital media to attract and communicate with the potential consumers and communities. The representatives of the organization are indulged in face-to-face interaction with the consumers who have demonstrated little to no interests in the products.The business strategy of the organization also indulged in enhancing the market awareness of their products and services through different traditional as well as innovative mediums. The organization has also standardized their showroom on a global level to provide unique experience to their consumers.
Market expansion strategyThe competitive strategies of the organization are influencing the business to expand its market within the emerging economies of the worlds.The business strategy of BMW is also focused on expanding their market within different developed and developing countries across the world.

(Source: Connaughton and Madsen, 2001; Tay, 2003)

4.4 Relative Effectiveness of the Strategies

  • Strategic mission, market segmentation and targeting consumers: The strategic mission of Mercedes Benz has allowed the organization to focus on futuristic technologies while indulge in offering products and services for diverse section of the community across the globe. This strategy has allowed the marketers to increase their consumer database along with geographical horizon. This strategy has also reduced their market presence as a premium brand and increases their recognition as leading brand in different mobility. On the other hand, the mission of BMW has established the brand as a premium and sporty car. This mission and marker target has allowed the organization to create a strong market positioning while it has reduced the diversity of their consumer data base (Tay, 2003).
  • Innovation and product development strategy and product efficiency: The product innovation and development for both the organization has influenced the marketers to improve the brand visibility and sensation. The market survey regarding the visual and sensory impression of both the brand has demonstrated that consumers are more inclined towards BMW in terms of their visual impression while they describe that Mercedes is interesting in a sensory way. Therefore, the product innovation and development of Mercedes Benz has allowed the organization to introduce higher efficiencies in comparison to BMW. On the other hand, BMW has attracted a huge number of premium consumers in terms of its visual representation (Connaughton and Madsen, 2001).

(Source: Connaughton and Madsen, 2001)

  • Market communication and expansion: Both the organizations utilizes social media platform to communicate with the community and potential consumers. The face-to-face communication and over indulgence in the social media campaigning has entitled the Mercedes Benz brand as the emotional brand in comparison to BMW. Consumers are more emotionally attached to Mercedes Benz brands rather than BMW. On the other hand, the standardization of the showrooms induces more sentiment of the global consumers of BMW in comparison to Mercedes. In also needs to be highlighted the premium pricing and targeting process of both the organizations has also debarred them to attract a huge number of consumers who do not feel emotionally attached to either of the brands (Tay, 2003).

5.0 Product/Market Growth & Marketing Strategies

Mercedes Benz needs to focus on modifying their product and market growth strategies to improve their market share, consumer communication and market attractiveness. There are two major growth strategies, such as Porter’s generic strategic model and Ansoff’s growth strategic matrix, that the organization needs to follow in terms of improving their market competitiveness and sustainability model (Kotler, 2008).

5.1 Porter’s Generic Strategic Model

The generic strategic model of Porter describes various strategic solutions which assist organizations to achieve their competitive advantages in the chosen market. The organization needs to follow the differentiation strategy of the generic model (Kotler, 2008).

Porter’s Generic Model

Mercedes Benz porters generic model

(Source: Kotler, 2008).

This strategy assists organizations to focus on differentiating their products, services and offerings to create a unique perceived value to the consumers. This strategy can assist the organization to secure a competitive position within the highly competitive market with a number of large as well as medium and small players. Mercedes Benz can introduce innovative and unique features within their existing products while focusing on introducing new and diversifies products for the market. This strategy will allow the management to differentiate their products from the rest of the competitors in the market. This strategy will also enable them to generate profit by offering premium prices in exchange of values (Kotler, 2008).

As per example, Toyota has utilized the product differentiation strategy in various levels that has allowed them to increase their market competitiveness in the global platform. The organization utilizes broad market scope that allows them to deal with a huge portion of diversified consumers. It also assists them to fight back increased market competition and saturation (Berthon, et al., 2012). The differentiated offerings of Toyota includes

  • SUVs, four wheel trucks, for consumers who live in areas with severe weather conditions.
  • Prius, hybrid car, for eco-friendly consumers.
  • Corolla lines for consumers seeking low prized vehicles.
  • Other standard as well as premium cars (Berthon, et al., 2012).

Mercedes Benz also needs to introduce new ranges of products with different and flexible pricing for different segments of consumers across the globe. The organization has already introduced charterWay which can be utilized for heavy weight carrier. They can also differentiate their product line into solar power cars, fuel efficient cars and other eco-friendly cars in the emerging market due to the increased demand. This strategy will enable the marketers to secure a competitive position along with their market expansion. This process will also enable them to increase their business sustainability by increasing their consumer database and attractiveness in the new as well as existing market segments.

5.2 Ansoff’s Matrix

The growth strategies of ansoff’s matrix, such as market penetration, market development, product development and diversification, can assist a number of organizations to fulfill their individual requirements to increase their market competitiveness and growth potential (Lamb et al., 2011).

Ansoff’s Matrix

Mercedes Benz Ansoff Matrix

(Source: Lamb et al., 2011)

The marketers of Mercedes Benz need to focus on product development and market development strategies.

5.2.1 Product Development:

The product development strategy will enable the organization to innovate and introduce new products for their existing market. This strategy will allow the management to reduce the threat of market saturation. This strategy will also enable them to increase their consumer attraction and loyalty by offering them to and attractive product ranges (Lamb et al., 2011).

As per instance, Venturi Automobiles has introduced new electric car ranges known as Fetish to their existing market which has allowed the marketers of the organization to capture a huge portion of the competitive market segment of their existing market. This product development strategy has also allowed them to increase their market sustain ability and profit ratio by increasing consumer attractiveness. This innovative approach has not only assisted the organization to eliminate their market saturation, but also has enabled them to secure a leading position in the electric and high performance car segment (Prajapati, et al., 2014).

Hence, Mercedes Benz needs to increase their investment in the research and development process as well as market research facilities. The market research procedure will allow them to gather information about competitor’s initiative and consumer demands. Therefore, R&D initiatives will enable them to offer futuristic product ranges to their consumers in existing market.

5.2.2 Market Development:

Along with product development strategy the market development initiative will allow the organization to improve their competitive position during their new market expansion process. This strategy will enable the marketers to offer their existing product in a new pricing strategy to the untapped as well as emerging markets. This strategy will allow the marketers to gain economies of scale by improving the sales of existing products (Lamb, et al., 2011).

The market entry strategy of Italian car manufacturing company, Fiat, in China market can be considered as an effective example of market development. The organization has initiated a joint venture with Chinese car assembling company to introduce modified version of their existing car models in the china market. This market development strategy has allowed the organization to increase their sustainability in the global market (Maielli, 2015).

Therefore, the management of Mercedes Benz should adopt new market entry strategies to introduce their existing products in the new market. They also need to initiate joint ventures and acquisitions within new and emerging market segments to utilize the local expertise to modify their products as per local demands. This process will reduce the cost of the organizations while increase their competitiveness in the market.

5.3 Mercedes Benz Marketing Mix

Apart from the growth strategies the organisation also needs to focus on their marketing mix strategies such as product, pricing, placement, promotion, physical evidence, people and process to introduce consumer and market focused offerings along with improved communication and services (Stone, 2001; Groucutt, et al., 2004).

  • 5.3.1 Products: The products manufactured by the Mercedes-Benz Car division include a broad spectrum of the Mercedes-Benz brand and it’s “Mercedes-AMG” and “Mercedes-Maybac” sub-brands (Daimler AG, 2014). The new product ranges of the organisation need to include high-quality small cars, solar power cars, fuel efficient cars, electric and battery powered cars. They need to concentrate on the present ability of their heavy weight and carriage vehicles such as large, medium and small SUV trucks. The vehicles need to carry high visual impression along with high performance technologies to attract consumers.
  • 5.3.2 Price: The company designs its pricing strategies depending on the price sensitivity of different markets. It has been found by the enterprise that the markets of trucks in the Asia and Africa are price-sensitive (Daimler AG, 2014).In general, the company aims at delivering the best product among the competitors and thus do not compromise on the price. As a result, its products are highly priced and serve the middle aged consumers with a high purchasing power. They also need to introduce price skimming strategy for their modified product to increase their market attractiveness and competitiveness.
  • 5.3.3 Place: The brand has an international presence with more than 8500 sales centers worldwide and production facilities in 19 countries. The main country of manufacture for the car division is Germany but it has production facilities in the United States, South Africa, France, China, India and other countries. In total, the Mercedes-Benz cars have 18 production sites worldwide with expansion plans in Beijing, Brazil, the United States and India. The most important markets for Mercedes-Benz Cars in 2014 were Germany with 16% of unit sales (Daimler AG, 2014). The other markets include the Western Europe, United States and China with 23 %, 20% and 17% unit sales respectively (Daimler AG, 2014). They need to introduce the joint venture market entry strategy with the new and emerging market. This process will allow the marketers to gather in-depth market knowledge while reducing the price of production.
  • 5.3.4 Promotion: Promotional activities include advertisement, personal selling, sales promotion and public relations (Blythe et al, 2005). The organization maintains public relations by conducting road shows in the presence of the media personnel and also by offering test drives to the journalists (Mooij, 2009). Mercedes-Benz undertakes diverse measures to support weaker markets based on the degree of regional unit sales. Mercedes-Benz also uses need to improve their after sales servicing processes by offering free or privileged after sales services for their premium consumers. They need to properly track the product lifecycle, hence, need to provide adequate services to improve the performance of the vehicles (Daimler AG, 2014).

The company has recently aimed at targeting the young generation. This was one of the strategies undertaken for the survival of Mercedes-Benz as a luxury car brand in the slowly recuperating economy. According to a survey conducted by the company, among the potential customers aging between 21 to 29 years old, about 59% had a satisfactory perception about the brand and only half of them expressed their willingness to purchase a Mercedes car. The innovative and rigorous digital advertisements and physical store campaigns has allowed the major competitors, such as BMW, to attract major consumers (The Daily Pennsylvanian, 2014). Therefore, Mercedes Benz must increase their focus and investment in the digital media advertising. They also need to modify the visual effects of their physical stores. They can utilize their interactive social media pages to promote in-store promotional campaigns along with free test drives and product knowledge sessions.

  • 5.3.5 Physical Evidence: The physical evidence attracts the consumer to purchase the product. This includes the images of the products, outlets, staff appearances, customer service, atmosphere in the outlets etc. (Ireland, et al., 2008). Innovative road shows and in-store campaigns can attract a huge portion of the population toward the brand.
  • 5.3.6 Process: The way of providing a service and the behaviour of the people who deliver the service affects customer satisfaction (Cravens and Piercy, 2008). Mercedes- Benz must concentrate on consolidating the sales and service activities in order to provide superior customer service throughout the entire life-cycle of the vehicle.
  • 5.3.7 People: The employees of the organization interact with the consumer and thus represent the brand in the market. Thus the people should be adequately trained, well-motivated and must possess the right attitude (Sengupta, 2005). Mercedes- Benz needs to conduct extensive training programs in order to develop the required skills, as the people of the organization represent its values. They also need to concentrate on hiring local people in all their operating market to properly communicate and serve the needs of local consumers (Daimler AG, 2014).

7.0 Conclusion

Mercedes-Benz has been successful in maintaining its position as a premium car brand in the middle of financial crisis affecting most of its major markets. The overall economic conditions have considerable influence in the sale of the automobile industry. The organization has managed the risk situation through the introduction of innovative products, technologies and services and thus constantly attracted the attention of the customers. It engages in intense research and development of technologies and digital services to maintain contact with its customers all the time.

The organization must continue to introduce innovative products and thus expand its business at various emerging markets, develop green technologies to maintain safety and sustainability and also improve its customer service through digitization.

Appendix A

Strengths

  • Brand name: Mercedes-Benz is one of the most popular brands in the world. Thus, is strong brand image allows the enterprise to charge high price for their products.
  • Technology: It holds patents for most of the safety features in automobiles and with its superior technology; it is able to meet the needs of the customer in a better way than its competitors.
  • Financial leverage: The company manufactures and assembles automobiles across the world and thus makes its operations cost-effective.
  • Market orientation: The organization has high market orientation and thus predicts the future trends in the market and this helps the enterprise to gain comparative advantage in the market for automobiles.
  • Innovative culture: The enterprise continuously introduces innovation in its products and this attracts the consumers of the brand constantly.

Weaknesses

  • Weak management: Mercedes-Benz is a popular brand with international presence and needs effective management to hold its position in the market. However, the weak management within the organizational structure increases business risks and reduces profit as human resource acts as an asset to any organization in the modern world.
  • Lack of effective customer service: The slow responsiveness to its customers by Mercedes-Benz may disappoint the customers and thus will force them to move to the products of its competitors who respond more quickly to the customer problems.
  • Lack of scale: The cost per unit of the vehicles are high and thus the enterprise needs to reduce the cost of manufacturing by taking advantage of globalisation while maintaining its quality standard.
  • Cost structure: The cost of manufacturing is high for Mercedes-Benz than its competitors.

Opportunities

  • Innovation: More and more innovation by the company will help Mercedes-Benz to produce unique products to attract new consumers and fulfil the specific needs of the existing consumers.
  • International expansion: Mercedes-Benz has an international presence and thus must use this opportunity to enhance its business by adopting an appropriate marketing strategy.
  • New Products: Introduction of new products in the existing market helps the organization to increase its revenue.
  • New services: Offering new and quick customer services helps the business to maintain customer loyalty and increase customer satisfaction. This leads to the expansion and diversification of the customer base of the organization.
  • Financial leverage: Taking advantage of the balance sheet allows the company to expand into various markets and new products, particularly in the fragmented markets.

Threats

  • Change in tastes: The taste and preferences of consumers may change rapidly given the large variety of products offered by the international automobile industry. To overcome this threat, the organization needs to constantly incorporate innovation and creativity in their enterprise.
  • Fluctuating revenue: Volatility in revenue flow may hinder the investment plan of the business and thus affects the growth of the organization.
  • International competition: The presence of several international competitors serving the same markets and the similar consumer segments provides intense competition to Mercedes-Benz which may lead to the decrease in profits of the company.
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