Assignment

International University College Dobrich

Business Environment Company: Mercedes Benz Prepare by: Ferian Arben IBM 1st year Reviewer: Robert Stevenson

2011

Page of content:
Introduction History of Mercedes Benz For what Mercedes is famous SWOT analysis Strengths Weaknesses Opportunities Threats PEST analysis Political factors Economic factors Social factors Technological factors Conclusion Advantages Disadvantages References 3 page 3 page 3 page 5 page 5 page 6 page 7 page 7 page 8 page 8 page 9 page 9 page 10 page 11 page 11 page 11 page 12 page

Introduction The global business environment can be defined as the environment in different independent countries, with external factors to the home environment of the organization, influencing decision making on resource use and capabilities. This includes the social, political, economic, social, technological, strengths, weaknesses, opportunities, threats environments. History of Mercedes-Benz In 1886 Karl Benz and Gottlieb Daimler had founded the most popular and famous worldwide nowadays company - Mercedes & Co in Mannheim, Germany. The name of the company is thanks to the Karl Benzs daughter, which name is Mercedes. The company is a German manufacturer of automobiles, buses, coaches, and trucks and the first one who create petrol-powered car by Karl Benz's creation. The Mercedes automobile was in the marketplace in 1901 by Daimler Motoren Gesellschaft. The first Mercedes-Benz brand name motor vehicles were produced in 1926, following the merger of Karl Benz's and Gottlieb Daimler's companies into the Daimler-Benz company. Member of the DaimlerChrysler Group, one of the biggest automobile manufacturers in the world, Mercedes Car Group plays an essential role in the success of DaimlerChrysler. It is the world market leader in the luxury segment which gives to their customers excellent reputation, particularly in the area of safety technology. For what Mercedes is famous McLaren F1 The production of this car listed seven years. From 1992- 1998 year and there were just 100 cars produced. During that time this car was something like the car from future for the people. Its design was perfect. But even if it was produced under the name of Mercedes the engine in this car was from BMW. It was 6.1 and it had 627 hp. And in 31 of March 1998, it set a record as the fastest road car in the world,

with a top speed 240mph (386km). And till now it is still the fastest naturally aspirated car in the world. In 2009 in the TV program Top Gear there was a made a race of Bugatti Vyeron and McLaren F1 on which McLaren take a first and second hundred kilometers faster than Bugatti. And the owners of Bugatti were impressed. Because they thought that their car is the best one all over the world. And the price for this road monster 970,000$.

During the years Mercedes Benz introduce many technological and safety innovations and the company Mercedes-Benz is one of the most well-known and established automotive brands in the world, and is also the world's oldest automotive brand still in existence today.

SWOT (strengths, weaknesses, opportunities, threats) analysis of Mercedes Benz

The SWOT analysis provides both internal and external analysis of the company. It discusses the strengths and weaknesses of a business - internal analysis. It also discusses the opportunities and threats coming from the external environment and that way states where the company should focus and what the potential threats might be.

Strengths everyone can say at least five strengths of Mercedes, here are some of them: y y y y y Strong brand name Successful F1 team Safety and Comfort (high quality) Modern and Innovative (High class) Strong competitor

Strong brand name The name Mercedes Benz is one of the famous and strong brand names in the world. Proved in the time with numerous advantages and style, the name Mercedes is on the top in the world charts. With many customers in seven continents, F1 fans, owners clubs the company can still maintain the interests of people with new products on the market. Successful F1 team Nowadays a lot of people prefer to drive fast cars, to give like presents cars, we see that young people and teenagers prefer fast and new cars which makes driving with high adrenaline and more memorable. Mercedes can satisfy all customer needs and Mercedes GP Petronas F1 Team (the full name of F1 team) can prove it, very good and well-known team which is always in top 3 or top 5. Their drivers are two of very popular men in the world - Michael Schumacher and Nico Rosberg .To have a successful F1 team is very good strategy for marketing development and makes brand name more preferred.

Safety and comfort - Most of the cars is equipped with a five-speed automatic transmission that offers maximum smoothness, well-spaced ratios, best-in-class long service life and excellent fuel economy. The improved fuel economy can be attributed to a torque converter lockup clutch which engages in all forward gears. The automatic transmission's electronic control unit continually processes signals relating to torque, engine speed, accelerator pedal position, wheel speed and traction, and it then communicates with the other control units to adapt all shift operations to both the driving situation and the comfort requirements. If desired, the driver can also control the shift range manually by moving the selector lever to the right or left (plus/minus). This is particularly helpful on downhill gradients, where drivers can take advantage of engine braking. Safety features As soon the brand will introduce new generation cars and functions. Here are some of them: The Intelligent Light System provides five lighting functions (Cornering light function, Country mode, Motorway mode, Active Light System and Enhanced fog lamps), which are activated depending on the driving conditions. The Speed Limit Assist is able to detect speed limit signs. The optional PARKTRONIC - Parking Guidance supports the driver when parking. It the cockpit display then provides a schematic representation of the recommended parking maneuvers. Modern and innovative Mercedes have a long list of different types of cars from cheap to really expensive, from Mercedes Smart to Mercedes McLaren. With modern vision, innovative, high class, quality the company gives a choice from 13 classes cars. For a first time Mercedes shows Anti-lock braking system and celebrated its world premiere in the S-Class in 1978. The background of the company can give a lot of examples for their achievements. Strong competitor As already mentioned above, Mercedes is one of the strongest competitors in automobile industry. Some of the well-know strong brands are BMW, Audi, Toyota (Lexus), Aston Martin. Weaknesses If you ask for weaknesses of Mercedes, they will be just few but it did not make them less important. y Price

y Lack of communication between the heads of office and the staff due to the method of communication they use y The costs of vehicles are much more higher than other vehicles in market which the majority of people cannot afford Germany's car makers produce a lot of beautiful, advanced cars that consumers around the world cannot wait to buy. Sales of Audi, BMW, Mercedes and Porsche were at record levels last year. Mercedes Benz offer to their customers high quality, safety, comfort, class, luxury and why not new feelings when you drive. The prices always was high and they are still high, even 15-20 years old cars, the company make the price to convert in weaknesses, but they are still one of the best on the market. Opportunities y Joint venture y Improving safety, comfort, and sustainable mobility y Providing fascinated vehicles for customers by the supportive of DaimlerChrysler Group y Professional sport sponsorship Before we go through the opportunities of the business, we have to take seriously on the threats at first. Apparently, Mercedes Benz is a global brand company and yet they are facing a lot of difficulties as well. Although they have a lot of difficulties, they still can handle them properly. Treats y A tax increase for importing vehicles y Less educated employees in China, but also very expensive to hire employees in Europe y Competitors that the Mercedes company had BMW (the most direct competitor), Luxury small car market with less expensive sub-compact model, Cadillac (GM)-Concentric diversification, Lincoln (Ford)Attract satisfied customers with improved products, Lexus (Toyota)- Sticker prices
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considerably below other luxury cars It is very common that every company has its own weaknesses. As Mercedes Company is a large company, therefore it's quite obvious the business has the deficiency of communication in the organizations. Although the costs are very high, the advantages have overweighed the disadvantages, thus there is the attractiveness which leading the people willing to buy.

PEST (political, economic, social, technological) analysis of Mercedes Benz

From the various types of macro environmental analysis we focused our attention on the PEST analysis. As we know PEST stands for: Political(government legislations, taxes, duties), Economy(side business, banks, loans), Social (demographic and cultural aspect of the external macro environment) and Technological factors(new technologies, research and develop, new model cars ).

Political factors It includes government regulations and legal issues and defines both formal and informal rules under which the firm must operate. The cars and trucks are powered by engines running on fossil fuels i.e. gasoline and diesels, emitting carbon gases that pollute the environment, the green house effect - the governments within the European Community have introduced various legislations to minimize the emission of such gases forcing the manufacturers to develop less polluting engines, Euro 4 - automobiles are also major causes of road accidents hence, government legislations have been introduced to improve safety to car drivers as well as the users of public transportation Economic The Mercedes-Benz has manufacturing plants in many countries including Germany, the United States, Brazil, South

Africa and many more. Its factories employ ten of thousands of people to make cars and distribute them globally. The immense size of its operations and its global presence also means that it also contribute significant amount to the various government in taxes and duties. The company follows federal and state fair employment laws under that prohibit harassment and protect employees against discrimination on the basis of race, color, sex, national origin, age, religion, marital status, ancestry, pregnancy, and disability in regards to selection, hiring, promotion, transfer and compensation . Economic factors It affects the purchasing power of the potential customers and firms cost of capital. As there are many competitors, like BMW, in the market, it affects the economic growth rate of the company as compare with other car companies. The company also contributes a lot to the local economy through local out-sourcing of materials and parts. With such huge side business, a lot of money in various currencies, US Dollar, Euro, Japanese Yen, is involved and a lot of banks are partners of Mercedes-Benz, providing banking services including loans and foreign currencies support, earning these banks interest income and foreign exchange service fees and gains. Social factors It includes the demographic and cultural aspect of the external macro environment. Social Mercedes cars are expensive and luxury cars by most people. Owning a Mercedes-Benz is synonymous with being rich and successful. Although most brands of cars, be they Japanese or European made, are of the top quality and with the most trendy style, Mercedes-Benz has successfully promoted itself to be the best car. This is achieved through a lot of media promotions and advertising involving popular personalities like famous sportsmen, movie stars, singers and top fashion models. The Participation of Mercedes GP Petronas F1 Team in Formula 1 races also give wide television coverage to the brand. Due to the success and effectiveness of these promotions, even a 5 year old kid knows that the 3-point star Mercedes-Benz logo represents quality and high class. Now the company has introduced low priced cars, therefore middle and low income level customers can also buy these cars and can feel rich. On the other hand, young customers do not

show much interest in Mercedes cars as they think that these cars made for mature people and have old look. Technological factors Technological there are many large and well established automobile manufacturers in the world including, BMW and Audi from Germany, General Motors and Ford from the United States and Toyota and Honda from Japan, to name a few. Moreover, many countries also have car manufacturing capabilities through their own development or through technology transfers from the established manufacturers. Hence, the automobile industry is very competitive. Companies keep introducing new models, with the latest design and technology to increase sales. The company spent huge sum of monies on research to come up with a better car to meet customers demand, taste and to be ahead of their competitors. In recent years, a lot of monies have been spent to develop new engines to meet low pollutant emissions regulations introduced by governments. Research & Development department of the company is quiet efficient and work continuously to meet the customers demands. The company has shows the concept of bionic cars that uses a diesel engine that produces more than 120-horsepower and uses selective catalytic reduction (SCR) technology to reduce fuel consumption. To realize the Mercedes-Benz bionic cars, the engineers at the Mercedes-Benz Technology centre have the first time looked for a specific example in nature which not only approximates to the idea of an aerodynamic, comfortable and environmentally compatible car. A lot of computer technologies have also been introduced to improve performance and safety. Conclusion in this case is the styling of the Mercedes-Benz is its most distinctive feature, and is more enduring than the styles of other cars. American and Japanese cars, for example, become outdated within a couple of years after their introduction, but Mercedes styling remains consistent and attractive. The interior styling of a Mercedes is particularly impressive. Its richly padded seats and dashboard and its precision instrumentation give drivers a feeling of security and luxury. Mercedes-Benz places driver and passenger comfort high on its list of priorities. The Mercedes-Benz engine is almost as legendary as its styling. Mercedes was a pioneer of diesel technology, and its engines are stronger in

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horsepower and last longer than those in other types of cars. After a few years, the Mercedes reveals another advantage that confirms its outstanding reputation.

Conclusion Mercedes Benz is a strong brand name. This make is famous all over the world and every year it becomes more and better. Mercedes is famous for its comfort, modern technology and luxury cars. Advantages 120 years old brand name. Good quality of cars. Factories all over the world with a lot of dialers. Every year their team participates in the formula 1 and takes good places. Of course Mercedes is not a cheap car but when you sit on its seat you feel all the power of its brand name. But if you have money for Mercedes you take a test drive and tell after this:- no thanks and after this you will buy for example Deawoo a lot of people will tell that you are kamikaze. Because you are paying a lot but you takes all the best for this price. Nowadays costumers wants to have and drive car which is well known in the world famous, has a nice design a lot of modern technologies and has a powerful engine. Disadvantages A lot of competitors, such as: BMW, Jaguar, Audi. For example the price for BMW is lower and the engine is more powerful. Or Jaguar is more luxury than Mercedes and they have the same prices. So the biggest problem for Mercedes is the price for their cars.

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References: www.mercedes-benz.com www.321books.co.uk/catalog/tesco/pestle-analysis.htm http://scholar.google.com/scholar?q=swot+and+pest+analysis+academic+article&h l=en&as_sdt=0&as_vis=1&oi=scholart www.mercedes-gp.com www.formula1.com/teams_and_drivers/teams/5/

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