Executive Summary

Mercedes-Benz came from both individual companies which is Daimler-Motoren-

Gesselschaft who aimed to create an internal combustion engine and Benz & Cie. that

manufactured an automobile. On June 28, 1926 formally merged after the death of Gottlieb

Daimler the founder of Daimler-Motoren-Gesselschaft. Both factories agreed to use the

name Daimler-Benz AG. An Australian read from a magazine about the company and its

product. He offered to buy 36 unit and because of that they named the cars after his

daughter Mercedes that was then 10 years old.

After the partnership with Jellinek the Australian investor, the Mercedes-Benz have

been race and won almost all the competitions. The invention never stopped, they have

developed a faster a safer version of the models. They are producing not just cars, but also

vans, trucks, buses, couches, lorries. Success was long but then comes a time of struggle and

failures. Some models were having problems when it comes to the design and the engine

starter. These problem affected the sales but not enough for it to go beyond BMW only that

Toyota was on the top when it comes to the Automobile ranking.

The success of the sedan and the SUVs is still at its peak and even in the coming

years foreseen to increase sales. Mercedes-Benz is aiming to develop not just their

invention but the management, one of these is their plan on cultural development.

According to Zetsche the current head of the Mercedes-Benz “, one of the most important

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lessons learned from Leadership 2020 is this one: If you give people instructions, then ideally you will

get the results you had expected. However, if you give them greater freedom you can get ideas far

beyond expectations.”

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 Mercedes Benz

Year 1886 Karl Benz invented the very first petrol-powered car also called Benz Patent

Motorwagen an internal combustion engine. His invention caught the attention of the investors

when his wife Bertha Benz drove it for the highly publicized first long distance road trip, 106 km (66

mi) with a motive of visiting her mother and proving her husband that after all his failures this

invention of his will be a financial success. Gottlieb Wilhelm Daimler an engineer and industrial

designer. Daimler is the developer of liquid petroleum vehicle he sued Benz for violating his 1883

patent on hot tube ignition. Daimler won the case so Benz had to pay for the royalties of DMG

(company owned by Daimler) they never talked to each other before and after the case.

After Daimler died both companies did cooperate in many ways, 1926 they decided to

merge then one named Daimler-Benz. The motto of Daimler “best or nothing ” then adopted by the

by Daimler-Benz’s Slogan. The name Mercedes Benz came from an Entrepreneur, successful racing

driver’s daughter who invested and promoted Daimler-Benz invention Emil Jellinek because of his

promise to buy 36 automobiles for 550,000 goldmarks along with his terms and conditions, to

produce a faster and safer version of the car after the death of a racer. European high society bought

the car in large numbers making it the commercial success that convinced the company directors

there was a future in automobiles.

Production increased greatly and DMG rapidly increased in size and number of employees.

DMG officially registered the Mercedes trademark in June 1902. Mercedes Benz is under the

company of Daimler Motoren Gesellschaft or Daimler Motors Corporation a German engineering

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company that manufactures automobile founded by Maybach and Daimler. The enterprise began to

produce petrol engines but after the success of a small number of race cars built on contract by

Wilhelm Maybach for Emil Jellinek, it began to produce the Mercedes model of 1902. After this

automobile production expanded to become DMG's main product, and its automobile trademark

and it built several models. In 1998 a further merger happened with Chrysler soon became

DaimlerChrysler. In 2007 the name DaimlerChrysler changed to just Daimler AG when Chrysler was

sold.

Because of the achievements that Mercedes-Benz had achieved from the race Daimler AG it

became the companies trade mark. It is known to be the fastest and safest car by that time that was

invented by Germans. Mercedes-Benz is known to be the status-car to own, Hollywood stars,

important personalities and even car racers aimed to have their very own Mercedes-Benz.

By the year 2006, Dieter Zetsche became the head of Mercedes-Benz car by 2019 he is about

to retire from his position. The management of Zetsche have faced lots of struggle by the decrease

of sales in the market by the year 2012. Their rank fell behind BMW, by that time Mercedes-Benz

struggles to increase sales by investing billions. The problem was that the BMW has wider range of

models unlike Mercedes-Benz that only had class A and B, second was that the quality was a bit

lousy and the design was troubling and there were no alternative drive systems. The several cars

built from 2014 to 2017 was being recalled because of the involved fire hazards, according to a

report, several such fire incidents had happened and the cause was an issue in the engine starter.

Such recalls hurt the brand image and lead to negative publicity.

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Change

On the year 2014, Mercedes-Benz reorganized manufacturing operations along its vehicle

architecture to improve its flexibility lift productivity and reduce fixed costs in order to limit

investments for each model line. This system shall eliminate the need for individual plant director.

They are planning to create three legally independent business units under the shared roof and

leadership of Daimler AG: Mercedes-Benz Cars & Vans, Daimler Trucks & Buses, and Daimler

Financial Services AG. Planned to submit a resolution concerning the restructuring and put it to a

vote at the annual meeting of Daimler AG in the coming 2019.

Strengths: Weaknesses:

1. Brand Recognition- the brand is globally 1. Expensive Models and High

renowned premium vehicles. its Maintenance Costs- Mercedes-Benz is

popularity has kept increasing rapidly a very expensive that is why it’s

during the past few years, known popularity is very high in a developed

mainly for its luxury sedans. Now it is market.

better known for its sporty car models 2. Vehicle Recalls- an issue on the engine

and SUVs. starter which lead to several fire

2. Large range of Popular products- C class accidents that they have to recall

as the best selling model which sold several models.

around 425,000 units. Since its launch

in 1982, it has delivered more than 9

million units. SUVs gained popularity

and sold more than 700 units

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 3. Financial Performance- sold more than

2 million vehicles. In US alone, it sold

more than 340,000 vehicles in 2016.

March 2017 was its most successful

month where it sold more than

228,296 cars. 89.28 billion Euros which

was a 7% increase in revenue from

2015.

4. High Popularity in Developed Nations- .

It achieved strong double-digit growth

in 2016 in the major markets of Great

Britain (+16.6%), France (+16.7%), Italy

(+16.6%), Spain (+18.2%) and Belgium

(+17.5%)

5. Local Production Facilities- has a global

production network that is spread over

4 continents. vehicle plants in France,

Germany, Brazil, USA, Hungary and

South Africa, vehicle assembly plants

are located in Thailand, Vietnam,

Indonesia, Malaysia, India and joint

venture in China and cooperation in

Renault Nissan in Mexico, USA and

Slovenia.

Opportunities: Threats:

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 1. Increased Demands in the Asian 1. Intense competition- intense

Markets- the demand of SUV’s competition with BMW and Audi in the

expected to be high in China, the global market.

Automotive market there might 2. Stiffer Fuel Emission laws-

continue expanding. implementation of stricter laws on

2. Rising demand of Premium vehicles and reducing emissions and fuel

SUVs- demand of premium vehicles has consumptions or in the process of

kept on rising not only in the nations doing so.

that are developing. SUVs are being

love by the Millenials.

3. Growth of Automobile Industry- the US

market has seen growing demand

caused by several factors like cheaper

gas prices and easy credit options.

Recommendation

1. To improve the brand reputation by producing the safer models.

2. To improve the engine starter so it may not cause another damage to the brand and

trust of the consumer.

3. To improve the partnership with local Chinese automakers. (Beijing Benz Automotive Co.

Ltd.)

References:

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Sources: https://www.cheshnotes.com/2017/05/mercedes-benz-swot-analysis/

https://www.forbes.com/powerful-brands/list/#tab:rank_industry:Automotive

https://en.wikipedia.org/wiki/Mercedes-Benz

https://www.autosphere.ca/autojournal/dealerships-news/2017/12/04/mercedes-benz-retail-
organization-changes/

http://www.spiegel.de/international/business/mercedes-falling-behind-competitors-despite-
strategy-changes-a-858260.html

http://europe.autonews.com/article/20140910/ANE/140919998/mercedes-reorganizes-
manufacturing-operations-to-reduce-costs

https://www.daimler.com/company/corporate-governance/board-of-
management/zetsche/linkedin/cultural-change.html

https://en.wikipedia.org/wiki/Dieter_Zetsche

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