#2 PRESENTATION

THIS #2 PRESENTATION WILL FOCUS ON THE INTERNAL ASSESMNET AND EVALUATION OF

THE COMPANY
The Resource-Based View (RBV)

The RBV categorizes resources available to the firm broadly as being tangible or
intangible in nature. For Mercedes-Benz, the VRIO strategic tool applied to the
identified resources to determine if the resources allow the building of competitive
advantage over the long run.

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2. Tangible resources

Tangible resources include those resources that are physical in nature and can be
easily identified by the organization and competitors

3. Intangible resources

Intangible resources refer to those resources that have no physical value but are still
owned and possessed by Mercedes Benz

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Major competitive advantage is by intangible resources

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The foundations of the MB are built on four corporate values:

• Respect: • Passion: • Discipline: • Integrity:

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Integrating Strategy and Culture, We analyse based on McKinney model

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A) Strategy
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Clearly defined

and communicated to all employees and stakeholders. This helps the organization manage
performance, guide actions, and devise different tactics that are aligned with the business
strategy. This makes operations for Mercedes-Benz more transparent and align the
responsibilities and actions of the company.

Guiding behaviour for goal attainment

SMART Goals are set with short and long-term deadlines in accordance with the business
strategy. This helps employees decide tactics and behaviours for attaining the set goals and
targets to help the business grow

Competitive pressures

addressed through suggestive measures and actions via strategic tactics and activities that
ensure sustainability for Mercedes-Benz via adapting to market changes and evolving
consumer trends and demands.

Changing consumer demands

MB takes into constant consideration the changing consumer trends and demands, as well as
the evolving consumer market patterns and consumption behaviour. to remain competitive
and relevant to its target consumer groups, indirectly helps to identify demand gaps in the
consumer market.

Flexibility and adaptability

besides reacting and responding to changing consumer patterns globally, but is also able to
locally and culturally adapt its products via localization for different countries and regions.
Moreover, the company is often able to proactively predict consumer market changes, and
devise strategic changes accordingly to meet the market trends.

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B) Structure

Organizational hierarchy

Mercedes-Benz has a flatter organizational hierarchy that is supported by learning and

progressive organizations. With fewer managerial levels in between and more access to
senior management and leadership, the employees feel more secure and confident and also
have higher access to information. allows quicker decision-making processes and increases
organizational commitment among the employees.

Inter-Departmental coordination

The company’s departments often form inter-department teams for projects and tasks that
require multiple expertise. All coordination between different departments is effective and
organized where has a systematic process for initiating and monitoring coordination between
departments to ensure smooth work operations and processes – and goal attainment

Internal team dynamics [department specific]

Mercedes-Benz encourages teamwork and team-oriented tasks.

Centralization vs. decentralization

Mercedes-Benz has a hybrid structure between centralization and decentralization. supports

decentralized decision making. Job roles at Mercedes-Benz are designed to be carried out
with responsibility, and employees often set their goals with mutual coordination and
understanding with their supervisors. also centralized in making sure that supervisors oversee
and approve the various efforts and tactics that employees choose to ensure that they are
aligned with the organizational strategy and values.

Communication

Mercedes-Benz has a developed and intricate system for ensuring communication between
employees and different managerial levels

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 1.3. Systems

Organizational systems in place

The systems at Mercedes-Benz are largely departmental in nature, and include, for example,
human resource management, finance, marketing,

Defined controls for systems

for evaluating performance and goal attainment. These controls and measures are designed
specifically for different departments based on the nature of their tasks and responsibilities.

Monitoring and evaluating controls

This monitoring of performance is continual and ongoing. This is largely done through
observation and informal discussions. Feedback to employees and overall department heads
is informally given regularly as and when it is required. Formal evaluation of performance is
also conducted semi-annually – or quarterly, depending on the need and the urgency of the
projects and assigned tasks. This ensures the identification of performance lags and
suggestive means of improvement

Internal processes for organizational alignment

all departments and systems within the organization are aligned and working in harmony and
all systems are designed to work towards goals and targets specific to their expertise under
the broader business vision and strategy. , the strategic leadership at Mercedes-Benz also
ensures that all systems are allocated with resources

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 2.4. Skills
Employee skills
Mercedes-Benz has a commendable workforce with high skills and capacities. All employees
are recruited based on their merit and qualifications.

Employee skills vs task requirements

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The company ensures that all its job requirements are met and that employees have the
necessary skills to perform their respective jobs in accordance with the values and culture as
well as the business goals and strategy of Mercedes-Benz

Skill management
It arranges regular training and workshops – internally as well as externally-to provide
growth and development opportunities for its employees.

Company’s competitive advantage

Human resources are one of the core competitive advantages of the company. The skills of
employees are developed specifically for job roles and requirements at Mercedes-Benz and
provide a competitive benefit to the company

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2.3. Staff
Employee skill level vs business goals
Mercedes-Benz has a sufficient number of employees employed across its global operations.
Employees for different job roles and positions are hired internally as well as externally –
depending on the urgency and the skill levels required. All job roles and positions are
designed to facilitate the achievement of business goals,
Number of employees
Mercedes-Benz employs a large number of employees. The number of employees varies from
country to country as per the requirements and needs of the business and operations.
Gaps in required capabilities and capacities
The human resource function of the business has a systematic process that aligns all other
departments to identify potential vacancies or skill gaps. Based on the nature of the need, the
human resource department arranges for recruitments which may be permanent or contractual
in nature, as well as arranges training sessions if needed for the current workforce

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2.2. Style 
Management/leadership style
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Mercedes-Benz has a participative leadership style and able to engage and involve its
employees in decision-making processes and managerial decisions. allows the leadership to
regularly interact with the employees and different managerial groups to identify any
potential conflicts for resolution,

Effectiveness of leadership style

Employees feel like they are active members of the organization who are valued for their
suggestions, feedback, and input. through participative leadership, leaders and managers are
able to identify current and potential conflicts within the Mercedes-Benz organization, and
actively work to resolve them as soon as possible.

Cooperation vs competition – internally

With its supportive and encouraging organizational culture, Mercedes-Benz gives way to
internal collaboration and cooperation between employees, systems, teams, and departments.
important since its operations are spread globally, and also because tasks and responsibilities
within the company often require inter-departmental feedback and input.
Team vs groups
Mercedes-Benz has effective and functional teams and works with them internally to achieve
its various business goals and objectives, and complete tasks.

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2.1. Shared values 

Core values

The core values at Mercedes-Benz include, but are not limited to creativity, honesty,
transparency ,accountability, trust, quality and heritage, ensures that all its activities and
operations are conducted with high ethical and moral standards that are redefined and
benchmarked against international criteria.

Corporate culture

The company has an international presence, and production units that are spread across
different countries. ensures that its organizational culture is supportive of diversity, and has
internal policies to reduce incidences of discrimination. encourages innovation and creativity
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by allowing independence for growth for individuals and teams –a supportive leadership
which works towards increasing employee motivation and job satisfaction

Task alignment with values

Mercedes-Benz ensures that all its job tasks and roles are aligned with the core values that the
company propagates to ensure a consistent and reliable brand image, as well as an honest
organizational culture.

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We found that MB is aligned with all 7 internal factors.

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Marketing Strategy of Mercedes Benz analyses the brand with the marketing mix
framework which covers the 4Ps (Product, Price, Place, Promotion). There are
several marketing strategies like product innovation, pricing approach, promotion
planning etc. These business strategies, based on Mercedes Benz marketing mix,
help the brand succeed. And position itself competitively in the market while
achieving its business goals & objectives.

Mercedes Benz Product Strategy:

Mercedes Benz is one of the leading premium car brands in the world. One of the
strongest points of Mercedes is its products. Mercedes Benz has a wide range of
passenger cars, light commercial and heavy equipment vehicles as a part of its
marketing mix product strategy. However, the strongest in its product portfolio will be
the luxury car segment which consists of Sedans, SUVs and sports cars as well. In
the new generation segment, it has A-class, B-class and the CLA. In the sedan, it
boasts of the E-class, C-class and S-class. Also, the Mercedes Maybach S class is a
true essence of luxury in its own. The Mercedes can boast about its products as not
only it has the best of design and luxury but also the best of technology. The 4matic
and BlueTEC is one of the best technologies till date. Also, apart from dealing with
new cars, Mercedes also deals with pre-owned Mercedes through its Mercedes
Benz certified portfolio. By 2022, the company is focusing on investing $11bn for
having electric & hybrid cars in the market.

Mercedes Benz Price/Pricing Strategy:

Mercedes Benz is a premium priced luxury car brand.
Being in the luxury segment, it caters to a niche segment who value quality more
than the price and so the price is always on the higher end. In the overseas market
where Mercedes Benz has a huge product variety available, the prices range from
$30,000 to $100,000 and above. Primarily it caters only to the luxury car market, and
#2 PRESENTATION

hence it invests a lot on high-cost materials. Thus, the Mercedes Benz marketing mix
pricing strategy is that of premium pricing, based on its features and competition.

Mercedes Benz Place & Distribution Strategy:

Mercedes Benz cars are present all across the world. Mercedes caters to a number
of countries worldwide, with its dealerships and service stations present across
various countries. The major markets are China, Asia pacific, Europe, Germany,
North America etc. A global reach shows the strong place & distribution strategy in
the marketing mix of Mercedes Benz. Mercedes has hundreds of dealerships across
the major metros and cities globally. It has its factories and plants set all across the
world in Asia, North America, South America, Africa, Europe etc. Mercedes has its
factories present in Germany, South Africa, India, France, Brazil, USA & Hungary.

Mercedes Benz Promotion & Advertising Strategy:

Mercedes Benz has always been an aggressive promoter. The marketing mix
promotional strategy of Mercedes Benz uses all media channels like TV, print,
online, billboards etc. Being catering to the luxury segment, Mercedes did not feel
the need for the traditional methods of advertising. Mercedes’s marketing strategy
always focused on its products, technology etc. but with the changing times and
customer attitudes they have also resorted to increase its communication with
consumers worldwide through online marketing, social media presence, print media,
etc. Also, Mercedes has built its brand awareness through various customer centric
activities like the Mercedes trophy, which is an international amateur golf tournament
where golfers from around the world compete. Also, it organizes various drives like
the International driving platform, Luxe drive, etc. where motor enthusiasts get an
opportunity to drive the Mercedes cars in challenging locations. Hence, this covers
the Mercedes Benz marketing mix.

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Financial ratios of MB from 2015-2020

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Liquidity ratios

In decreasing trend but MB CR is still greater compared to the industry average

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2. Leverage ratios
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Typically, a LT debt ratio of less than 0.5 is considered good or healthy. Comparing MB with
its industry average, its doing well.

The debt-to-equity (D/E) ratio general large companies in fixed asset-heavy industries (such
as manufacturing) may have ratios higher than 2.MB debt/equity is still better than industry
average

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3. Activity ratios

Comparison with the industry average, MB is doing good.

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4. Profitability ratios

The net profit margin, ROE & ROA in comparison to IA, MB is doing better in all the
three categories mentioned.

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MIS

Mercedes-Benz Company use the three categories of the information system .the
Departmental information system which connect between the different department
of the Mercedes-Benz Company like the supply department ,human resources
department and finance and accounting department also all other department its
Combine all under the enterprise resources planning system (ERP) which include all
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internal and external management information across an entire organization and it

work to make the business and planning inside the organization become easier and
more efficient using the network that make the flow of information inside the
company more effective , and make working with business activity more faster and
reliable because the operating works at the real time like for example dealing with
customer car order , also bill of the material used of producing the cars ,supply chain
planning and the company receivable .

Whereas for Organizational information system the company use a lot of information
system like the DSS this system use to support the organizational Decision making
and using the what if analysis for future planning, moreover the Mercedes company
use the OAS to support the data workers who share information by using different
software like spreadsheets, desktop publishing, communication through voice mail,
email, teleconferencing.

Finally the Inter- organizational system for Mercedes its system allows the flow of
information to be controlled by more than one organization in order to reach a
desired supply-chain management system and to have more advantages of having
exchange of technologies between organizations, Mercedes did that by having the
IPhone Interface Plus information system that enable Mercedes company to using
Smartphone’s as a media Center once the iPhone connect to the vehicle electronics
it well become easy to use the hardware controls , and it became easy to larger the
display on the vehicle’s dashboard to control and view content while driving and
enjoy iphone feature. ,The Mercedes-Benz app have been designed specifically for
the in-car use, making it easy to interact with social networks like email, GPS
services, Twitter, and Face book , furthermore its use to Tracking the service
progress of your vehicle and any problem the system find in the car for faster
checking of any errors face the car and this provide better service for the Mercedes
–Benz customers .

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R&d
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Daimler has continuously invested in R&D.Daimler Greater China has opened a new state-
of-the-art Mercedes-Benz Research & Development Centre in China and has extended its
local R&D network. In total, 112 million EUR has been invested into the Beijing-based
research and development facilities for Mercedes-Benz passenger cars into this new site
alone, according to a press release from the company.

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Value Chain Analysis (VCA) taken Bloomberg 2019

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Upon analysis, we listed all the strength and weakness ,Our IFE rating at 3.20
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In #1 we highlighted the Pestel analysis on the opportunities and threat faced by MB.
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We also found out 8 other issue and challenges faced by MB

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And distributed them accordingly to STRATEGY ISSUES AND CHALLENGES
EXPLAIN IF REQUESTED or got 5 min time
FAILURE GAP.
1. Seek to engage all stakeholders.
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Mercedes Benz seeks to engage with all stakeholders in order to share views and
experiences and discuss controversial issues in a constructive manner. Mercedes Benz
defines stakeholders as individuals and organisations that have legal, financial, ethical, or
ecological expectations regarding Daimler.
 
2. Failure to recall
Mercedes signed the settlement agreement, admitting mistakes were made during the
recalls of 1.4 million vehicles. Mercedes had additional problems with notifying dealerships
about planned recalls and even misestimate the percentage of vehicles affected by recalls.
According to the $20 million settlement agreement, Mercedes-Benz will pay a $13 million
civil penalty now, but an additional $7 million will be deferred and could become payable if
specified conditions are not satisfied.
 
3. Procurement Market Challenges
Risks arise in particular from fluctuations in the prices of raw materials and energy, financial
bottlenecks for suppliers, and over-or under-utilization of production capacities. The level of
costs depends on the price development of raw materials. Due to largely unchanged
macroeconomic conditions, price fluctuations are expected with uncertain and inconsistent
trends also for the year 2021. Rising raw-material prices may therefore have a negative
impact on the profit margins of the vehicles sold and thus lead to lower earnings in the
respective segment.
 
The financial situation of some suppliers remains tense due to the gloomy market
environment. Supplier risk management aims to identify potential financial bottlenecks for
suppliers at an early stage and to initiate suitable countermeasures. Specifically, depending
on the warning signals recorded and the internal classification, regular reporting dates are
agreed upon for suppliers at which key performance indicators are reported to Daimler and
any support measures can be determined if necessary.
 
Daimler's planned electrification of new model series and the better-than-expected
recovery of demand in particular are faced with the risk of increased volumes of
components from suppliers. This could result in over-or under-utilization of production
capacities for certain suppliers, and thus lead to supply-chain disruption. Uncertainties
related to the covid-19 pandemic may also lead to supply bottlenecks and thus production
interruptions.
 
Inadequacy
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1. Trade conflict escalation

A renewed escalation of the trade conflict between the United States and China would
continue to be a significant risk for the further development of the world economy. Most
areas are, meanwhile, affected by the conflict, and there is the threat of increasing
technological and economic disconnection between the two countries. This could
significantly affect the development of unit sales by Mercedes-Benz Cars & Vans. In
addition, the danger that countries will implement increasingly protectionist measures such
as specific market-access barriers or industry requirements for increased local value-added
would lead to higher costs at Mercedes-Benz Cars & Vans and Daimler Trucks and Buses,
adversely affecting business developments and sales possibilities.
2. Issues surrounding the development of unit sales
The lack of market acceptance of certain vehicle models in individual regions can have a
negative impact on earnings. Causes of declining vehicle sales may also arise, particularly in
the context of a partially unstable economic environment and political or economic
uncertainty.A rising oil price and volatile exchange rates can also lead to market uncertainty
and thus to falling demand for vehicles.
 
3. increasing price and competitive pressure
The launch of new products by competitors, more aggressive pricing policies and poorer
effective pricing in the after sales business can lead to increasing competitive and price
pressure in the automotive segments and have a negative impact on profitability.
Continuous monitoring of competitors is carried out in order to recognise these risks at an
early stage. Depending on the situation, product-specific and possibly regionally different
measures are taken to support weaker markets.
 
A Critical Incident
1. Covid-19 Pandemic
The COVID-19 pandemic is a major significant risk for the development of the global
economy. If the further course of the infection necessitates even more drastic and
comprehensive containment measures than assumed,  this would have a major impact on
the economic recovery and international trade relations. The broader and more
comprehensive the lock-downs, the greater the impact.  For the Daimler Group, the risks
arising from the further course of the pandemic could, on the one hand, adversely affect
both unit sales and sales processes, and on the other hand, could lead to significant negative
effects on production and supply chains.
 
Crisis
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1. Increase in public and private debt

The increase in public and private debt resulting from the pandemic and the
countermeasures required to combat it could lead to speculation in the capital market due
to some countries’ debt situations. This, in turn, could further increase uncertainty among
consumers and investors. In the event of rising interest rates, this development could
worsen further. The rising burden of interest and principal payments could restrict
companies’ scope for future investment, thus dampening future economic activity. Lower
investment activity would have a particularly negative impact on unit sales of Mercedes-
Benz.
 
2. Stricter regulations to reduce vehicle emissions and fuel consumption
Most companies have stricter regulations to reduce vehicle emissions and fuel consumption
to reduce the environmental impact of vehicles, including limits on noise emissions, as well
as pollutants from the emissions caused by production facilities. Non-compliance with laws
applicable within the numerous regions may lead to important penalties and reputational
damage, and may even mean that vehicles couldn't or may not be registered within the
relevant markets. This additionally includes risks from current activities with reference to
legislation on Real Driving Emissions (RDE). Additionally, the chance exists that vehicles
already on the market could be reworked. Mercedes-Benz Cars & Vans is confronted with
the aforementioned risks due to relevant laws requiring necessary targets for common fleet
fuel consumption and CO2 emissions of recent vehicles.
 
3. Challenges in free-trade agreements
The position of the Daimler group in key foreign markets might be laid low with the
conclusion of or changes in free-trade agreements. If free-trade agreements are over while
not the participation of states within which Daimler has production facilities, this might lead
to a competitive disadvantage for Daimler compared with competitors that manufacture
within the countries that are members of the free-trade agreements. Additionally, if the
content of the free-trade agreements presently utilised by Daimler is considerably stricter or
the conditions of future free-trade agreements are more restrictive, this might considerably
impair the position of the Daimler cluster, because the cluster might now not or solely take
pleasure in those free-trade agreements. At the same time, however, the conclusion of
recent free-trade agreements might conjointly lead to opportunities for the Daimler group.

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