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Mercedes Benz Case Solution
In the UK, the automobile industry is on the decline. This is due to the fact that there have been policy changes in the UK, which have presented uncertainty for the customers. Apart from that, there is a shift in consumer demand with a rise in shared or rented vehicles rather than car ownership. Changes in taxation have also led to a decline in the demand for cars (Thomas, 2019). However, the emergence of technology in the automobile sector, such as gesture recognition and artificial intelligence, has resulted in an increase in industrial competitiveness. New entrants in the market are posing threats to existing companies even though the emergence of technology forecasts a growing market demand for smart cars. Export friendly policies by China and other countries are also a threat to the automobile industry in the UK (Global Market Insights, 2020).
This report will cover the industry analysis of the automobile sector and analyse the company Mercedes-Benz and assess the problems that the company faces. This analysis will help in developing a set of recommendations for the company according to the direction in which the industry is moving.
Following questions are answered in this case study solution
Resource Strategy Analysis
Role of Marketing in Developing the Brand
Case Analysis for Mercedes Benz
2. Industry Background
Technological advancement has played a crucial role in the manufacture of environmentally friendly automobiles. However, the global uncertainty of fuel prices and value-added taxation on battery, hybrid, and hydrogen cell cars have resulted in low demand for the cars. The automotive industry in the UK is standing against taxation, including the taxes on insurance to assure an increase in affordability, which will lead to an increase in demand. The industry analysts forecast growth in car sales to one million cars just by the removal of value-added tax on the cars (Leggett, 2020).
A slump in the automotive industry has resulted in a decrease of 11.9% in employment in the automotive sector of the UK while salaries have also reduced by 2%. This indicates that companies in the automotive industry were hesitant to expand their operations because of lowering demand and political instability in the country (Myles, 2020).
Several companies in the country were trying to relocate because of the uncertainty of Brexit. This is because of the dependence of the companies on imports for several manufacturing parts. An increase in the customs taxes or a delay on the imports would have impacted companies’ financials drastically (Paris, 2019). Currently, the continuing uncertainty over Brexit has resulted in the industry failing to attract giant businesses who would manufacture car batteries. Since the global automotive industry is rapidly shifting towards more environmentally-friendly car manufacturing, the slump in the UK automotive industry could result in great losses for the country as a whole. China is leading car battery production globally; however, car manufacturers look for ways to manufacture their car batteries to reduce the costs associated with importing these batteries (Jolly, 2020). This industry background shows that the UK automotive industry needs policy changes or company-specific strategic changes to address the issues.
3. Company Background
Mercedes-Benz is a German automobile company founded in 1955. The company has approximately 1.52 million employees and is listed as one of the world’s most valuable brands of 2019 by Forbes, with a brand value of $33.2 billion (Forbes, 2019).
Mercedes-Benz has a board of management who elects a chairman. The major company decisions, such as strategic changes are made by the board. The company focuses on sustainability for all of its stakeholders, including its customers, investors, employees, and society as a whole (Daimler, 2020c).
In terms of climate protection, Mercedes-Benz has made goals for 2039 named ‘Ambition 2039’ in which the company focuses on delivering CO2 neutral vehicles. However, the goals are stated to be flexible according to the technological changes and the demands of the future consumer. The company also focuses on digital purchasing and allowing increased convenience to the customer for a car purchase. The group also stated that it would be prioritizing its resources for increased profitability and growth. The development of a corporate culture that includes enthusiasm, courage, and determination is vital for the attainment of the company’s goals (Daimler Group, 2019).
Mercedes-Benz’s mission statement is comprised of three aspects. Firstly, reinventing the invention and focusing on balancing sustainability and luxury. Providing customers according to their needs and preferences. Secondly, creating sustainable value to attain profitable growth. Thirdly, transforming, and reinventing the team to become agile according to the changing times (Daimler, 2020b).
The company values diversity, integrity, discipline, passion, and excellence. The company rewards achievements and good performance. These values are what have driven Mercedes-Benz to become one of the leading luxury car brands in the world. They hire on the basis of shared values and commitment to perform (Mercedes-Benz, 2020). This shows that the company is performance-driven and considers its employees as its assets.
v. Target Audience and Customers
The target audience for Mercedes-Benz is people in their late 20s to 40s belonging to the middle to high-income group. The company targets its customers through events in which the target audience takes interest, such as viewers of golf tournaments (Buss, 2018).
4. Strategic Analysis
5. Resource Strategy Analysis
Daimler Group, which includes the brand Mercedes-Benz has launched a Daimler corporate academy. The mission of the academy is to develop the existing human resources of the firm to make its human resources competitive in the automobile sector globally. It includes disseminating business skills as well as managerial and leadership skills to further improve employee and team performance (Daimler Group, 2019).
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