Contents

Introduction......................................................................................................................................1
Mission statement………………………………………………………………………………….
Vision statement

Corporate Objectives………………………………………………………………………………
SWOT analysis................................................................................................................................2
Marketing strategy: -........................................................................................................................9
Marketing Objectives.....................................................................................................................14
Reference.......................................................................................................................................18

Introduction
In order for successful investigation and completion of the course work, the subject organization
opted is one of the leading automobile Mercedes – Benz, which has its own legacy and identity
among the customers with their presence in almost all the nations. It is a German company
specialized and uncompromised in luxury, performance and quality. The organization is not been
limited to a specific region or area, and they deals with luxury automobiles such as buses, trucks
and cars. Reliability of Mercedes –Benz vehicles are significant, and the strong presence of the
company in the industry induced to consider the company for the study and analysis.
Remarkably, the company is not comparable to the manufactures who produces small medium
segment vehicles because of the high market position, and the direct competitors of Mercedes-
Benz such as Volkswagen, Jaguar, BMW and Lexus, competiting with them in the market in this
level of standard. Although the main manufacturing and assembling centre of the company is in
Germany, they have assembling units in United States, France, Thailand, Vietnam, Brazil, China,
Indonesia, India, Malaysia, South Africa.

Before making a decision on strategy in all departments within the organization, it is essential to
evaluate the general environment of the organization. The primary objective of the strategic

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decision making in a organization is to generate competitive advantage in a sustainable level in
order to outperform over the competitors to attain the supremacy in the industry and thus lead to
profitability by making changes in the internal and external environment. According to the
current business scenario, the operations of the organizations are influenced highly on the
changes occurred in the environment. Environmental factors which affects the organization
internally and externally. Any organization has to create a corporate strategy that best suits to the
environment where they functions by considering the strengths and weaknesses. According to
Mintzberg. H (2009), the business environment in the global level is uncertain, so that to plan a
long term strategy is impossible.

In every organization, in order to present the direction, starts with a mission statement, secondly,
a vision, the means of reaching that direction, thirdly, to provide it with techniques and means
for accomplishment, the objectives, then finally, develop the plans for functioning of each
departments within the organization.

Mission statement

Mission statement is a statement written to brief the rational of the organisation. The mission
statement helps to lead the organisational functions so as to achive the ultimate organisational
goal of the organisation. On the other hand the mission statement is known as the pathway of
decision making in the organisation. Moreover, it offers the context or framework on which the
strategies of the organisation are formulated.
Being one of the major players in the automobile industry the mission statement of Mercedes-
Benz is ‘we entrust to go beyond each and every customer’s expectations by providing reliable,
excellent, high class and friendly products and after services’.

Vision statement
The vision statement summarizes what the company need to achieve and how the performing
environment should be. This mainly targets the future of the company. This is otherwise called
as the foundation of motivation. If an organization has a clear vision about their goals and
objectives then it will help them in decision making criterion. The vision of Mercedes- Benz is to
‘install cutting edge innovation and technology into its products and services’.

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The advantages of mission and vision statements is that it creates value to the participants in the
overall functional process such as managers, employees and the customers. These statements
makes a sense of opportunity and direction. Thus these statements have an indispensable role in
the decision making. Mostly both statements creates a confusion, however, the vision illustrates
the need and essentiality to attain the mission.

Corporate Objectives
 The primary objective of the company is to boost up the overall revenue steadily
in the years to come by increasing the sales. Years 2010/2011 revenue should be
in degree which shows a raise in the sales. However during the early stages of
2012 there shows a negative trend in the market.
 To enhance the profitability the organization need to develop certain programs in
order to improve the efficiency, and it should be cope with all the divisions of
operation within the organization.
 Develop manufacturing equipments for long term use.
 In order to provide quality performance the organization need to enhance the
functions of value chain. In order to reach these goal, new models such as lean
and JIT can be used. This helps the organization to become more cost effective,
flexible and faster, and therefore the organization can be more profitable and
competitive in the market.
 The organization need to create a strong network of activities worldwide by the
help of Information Systems for the well functioning and for knowledge transfer
with in the organization, and this helps the overall functions of the organization.

SWOT ANALYSIS
SWOT is a method to realize and recognize the Strength, Weaknesses, Opportunity and Threat in
the current and future business environment. This analysis gives a clear understanding of the
position of the organization and helps in decision making while making corporate strategies. A
detailed SWOT analysis of Mercedes Benz has been done here;

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 Strength Weakness

Superior products More dependence for their premier ranges

Brand name High price

Operational excellence

Global presence

Opportunities Threats

Growing wealthier classes in the developing Price increase of raw materials

countries like China and India
Present down turn due to the recession

Strength

Brand name: Mercedes- Benz has a brand equity and perception, and the brands are clearly and
efficiently positioned in the market. With the help of the renowned brand name and value the
company can target and attract specific customers around the world. The company uses various
parameters in order to make regular reviews of the positioning of their brands in the market so
that the company can manage the value preservation successfully.

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Global presence: the company has their presence in almost all parts of the world. Currently, the
company aims to concentrate more on the developing countries so that they can make use of their
potential. Availability of low cost manufacturing infrastructure cuts their production cost
noticeably and this helps them more cost competitive in the production process. And also this
helps the company to add a competitive advantage over their competitors in the industry.

Operational Excellence:

Mercedes Benz has excellent operational facilities that help them to produces and sells their
products more efficiently than any other competitors. Lean production techniques help them to
avoid the wastage both in terms of cost and time and enable them to achieve excellent efficiency
in production and service. Along with that they were also implemented ‘Efficiency-improving
programs’ to bring standardization in all fields of their operation and the value chain. They also
gain a competitive edge over other by innovation and technological leadership.

Weaknesses

High price of their products are their main drawback that we can pick easily from their history.
Most of their brands were not affordable for the middle class people in the world. Another
important weakness is that they were not yet introduced the small and cheaper cars in the market.
The statistics shows that there is a steep increase in demand for the small car all over the world.
Generally, if they want to hold the markets like India and China they need to focus on the middle
class people in those countries.

Mercedes-Benz was fined a record US$30.66 million in 2009, due to their inability to meet
“Federal Corporate Average Fuel Economy” regulations of United States. Mercedes Benz spent
a total of €1.7 billion on environmental protection in 2008 (2007€1.5 billion).

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Opportunities
The development in the developing countries like India and China creates more and more
prospective consumer classes for the group in those parts of the world. The economies of these
countries are showing a upward trend rather than the western countries. If they concentrate of
these parts of the world with affordable brands then they can gain a sustainable competitive
advantage over their competitors in the international market. Another factor that create more
opportunity for the group is the increase in number of the wealthier class around the world. This
would create more demand for their premier brands like A class and May Bach.

Threats
The financial downturn is the main threat for the organisation. Even though most governments
announced they are overcome the recession it will take more time to settle down the economy of
these countries. The strong presence of their competitors is another factor that has an
apprehension over the organisation. Their key competitors like Volkswagen, BMW, Lexus etc
are trying to gain a strong hold on the market by developing more economically affordable and
reliable cars for the growing consumers around the world.

The former and conventional mutual responsibility agreement for controlling the CO 2 emissions
are eliminated and more strict and tight control norms were set out b y the European Union
regulatory committee over the car manufacturing companies. In the year 2009, the European
union commission made it clear that they want the average new car emit no more than 130g of
CO2 per kilometer by 2012 those cars made in the EU.

Porter’s five forces model

Potential
entrants

Threat of new
entrants
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Supplier’s Buyer’s
bargaining Industry bargaining
power Competitors power
 Rivalry

Substitutes

This model is known as the outside-in strategy in business to analyse the attractiveness
in the structure in the industry, and it analyse five fundamental competitive forces.
Porter’s Competitive Forces model is an useful common tool for business strategy.

1. Entry of competitors- to evaluate the capability and other barriers of new

entrants to compete.
2. Bargaining power of buyers – evaluate the position of buyers and to check
whether the buyer can bale to order large volumes by work together.
3. Substitutes threat – to analyse the ways to substitute a service or a product and
also to reduce the price.
4. Suppliers bargaining power – to assess sellers position in the market, whether
there are many suppliers or a monopoly supplier.
5. Rivalry among the existing players – to examine, the competition between the
existing competitors, and to checke whether there is a dominant player exist.

A sixth competitive force is often used as well, which is;

6. Government – monitoring Governments policies

New Entrants Threat :

 Requirement of more capital

 Economies of extent
 Switching costs for customers
 Entrance to the distribution channels in the industry
 Entering in to new technology
 Loyalty of brand loyalty

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  Retaliation possibility from existing players
 Regulations from the Government

Threat from Substitutes:

 Willingness of buyer to substitutes

 Performance and relative price of substitutes.
 Quality of the substitutes
 Switching costs for customers

Suppliers bargaining power:

 Analyses the brand name of the supplier whether it is strong

 Evaluate the number of buyers and to check whether there are dominant
suppliers
 Suppliers profitability – are they forced a price raise.
 In the area of quality and service
 Suppliers threaten to incorporate forward to the organisation procedures such as
opening new retail outlets
 There wont be any kind of threat from the customer to integrate Buyers do not
threaten to integrate in reverse into supply.
 Switching cost may help the supplier to search for new buyers

Buyer’s Bargaining Power

 Buyer concentration , whether in the industry, there are only less dominant
customers and numerous sellers
 Buyer profit – whether buyer forced to be sturdy.
 Forward and backward mix up in the industry may be a threat.
 Differentiation – whether the products are standardised
 Role of quality and service.
 Switching costs- whether the customer finds easy to switch the supplier

Rivalry force

 Competition structure – if there are many rivals, then the rivalry will be powerful
and the rivalry is less if the company is a market leader.
 Cost structure in the industry- organisations with high price helps rivals to
produce products by reducing the costs.
 level of differentiation of product- this is regards to the rivalry among products in
the same industry.
 Cost switching - when customer has high switching costs, there will be only low
rivalry.
 Objective of strategy – if the rivals have aggressive expansion plans, then the
competition will be powerful. In a highly matured industry, the competition is low.

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  Exit barrier – if the industry leaving barriers are more, the rivalry between
competitors are more.

Strategy: - is a process “that can allow an organization to concentrate its limited resources on
the greatest opportunities to increase sales and achieve a sustainable competitive advantage”.
Most of the strategies are revolve around the key concept that customer satisfaction is the
foremost objective. According to porter there are “three different generic strategies by which an
organization could achieve competitive advantage. These were cost leadership, Differentiation
and cost Focus”. After the successful development of the marketing strategy it is vital to
implement it by using all the available resources. It is essential to consider the resources and
competencies before the implement those strategies. (Porter 2007)

It is not possible to count the number of marketing strategic options available for an organisation.
Obviously, there are three important and broad-based, general strategies remain for us to choose
from.

o cost leadership
o differentiation
o cost focus

Reference
Mintzberg. H (2009) Managing., Berrett Koehler Publishers

Johnson G., Scholes K. and Whittington (2006) Exploring Corporate Strategy: Text and
Cases, Prentice-Hall.

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 Kotler P., Brown L., Adam S., Armstrong G., (2001), “Marketing 5th Edition”, Australia,
Sydney: Prentice Hall

McDOnalds,M.,2004.Marketing planning,3rd edn,London: Butterworth Henemann

Porter, M. E. (1980) “Competitive Strategy: Techniques for Analysing Industries and

Competitors, New York, The Free Press.

Mercedez Benz (2007).History of Mercedes Benz,available online at www.mercedes-

Benzmuseum.com (accessed 13/11/07)

http://www.dft.gov.uk/consultations/closed/emissionstandardseuro5/ (accessed on16-11-

07)

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