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Legislation Environment - The EU are bringing in a new legislation that the average CO2 emissions from new European cars must be cut to 130g/km by 2015. Competition - legal restraints on competition within the EU car industry are expected to drop substantially over the next 5 years Taxes and Duty- MOT, price increased. Road tax directly linked to amount of emissions Subsidies- The Government has today met the automotive sector to discuss the help available to the stricken industry. Commenting, David Frost, Director General of the British Chambers of Commerce (BCC), said
ECONOMIC
Recession/Boom. Due to the current economic
crisis Mercedes along with other car manufacturers are finding it increasing difficult to sell cars and many have even closed plants. Exchange Rate- Euro v Could make Mercedes more expensive in the UK
SOCIAL
The social factors can be broken down according to the following
demographics:
Age Gender Income
are not very popular with youngsters as the brand is expensive and is very hard to get insurance on at such a young age.
cars ?
middle to high incomes. Unlike Vauxhall, for instance, Mercedes doesn't offer different prices ranging from high to low so the products dont really appeal to consumers with a low income.
SOCIAL
Are males or females more popular with
females . They design cars to fit both male and female specifications.
http://www.youtube.com/watch?v=MgVB5HRrhtM
corporate, upmarket and mature brand. So need to make sure there update with fashion, technology and social trends, such as the green movement, to maintain its image. This could be done through research and development .
A n o th e r fa cto r M e rce d e s n e e d s to th i k a b o u t i Advertising n s . Mercedes tend to promote there brand on Bill boards, Business newspapers they also offer there own Mercedes magazines
TECHNOLOGICAL
Safety- Advances in technologies such as
shatter-proof windscreens, air-bags, crumple zones and collapsible steering columns have made it possible to manufacture safer cars. Safety sells Plant Efficiency- New Production methods that improve efficiency. E- commerce Gizmos
SWOT ANALYSIS
Strengths
Strong brand name Owners club Successful F1 team Good Resale Value Good relationship with
Weaknesses
Price
the government
SWOT ANALYSIS
Opportunities
Threats
Development of new
models crisis Environmentally friendly Strong competitors cars New entrants into the market
TH R EATS O F N E W EN TR A N TS
I G P O W E R S O F S U P P LI I A LR Y A M O N G FI MBSA R G A I I G P O W E R S O F B N EV N N R RS R
TH R E ATS O F N EW EN TR A N TS
Benz is highly intense. The main competitors within this segment include:
BMW AUDI JAGUAR ASTON MARTIN ALFA ROMEO
producing similar range of vehicles, as well as expanding into new products or services e.g. financial services, alcoholic products etc.
SET-UP COSTS: the set up costs are high in this segment. CUSTOMER BASE: consumers within this market are likely to have
THREAT OF SUBSTITUTES
Mercedes-Benz has numerous substitutes that it has to be
are considered luxury products, they also have to be cautious of other prestigious products that consumers could buy instead of fancy cars. These include: Designer Clothing Expensive/Collectors Furniture Holidays Luxury Homes Art e.g. Paintings, Sculptures etc. Jewellery Boats/Yatches
factors. These include the position of rival suppliers, the quality of goods and services supplied; the demand for goods and services; and the supply of goods and services.
materials required in car manufacturing, including metals, leather, electronics, paints and rubber.
quality, suppliers could increase their bargaining power through emphasizing the superiority of their goods.
purchase fleets. Their bargaining power can be increased by the scale of business they could offer the company and the presence of alternatives.
usually less than that of their commercial counterparts, however, the strength of rival brands and provision of substitutes are key factors that can affect their buying position.
market, it shows the positioning of both their direct and indirect competition.
Strategic Scope
The strategic scope shows the size and composition of the
target market. In Mercedes-Benz's case, the vehicle market in the UK is worth 33bn in new cars and 35.1bn in used cars. Of this, Mercedes-Benz have a low market share, however, this is compensated by the revenue generated through their medium to highly priced products.
The overall market contains various specifications of vehicles,
of which Mercedes-Benz is represented in all of them. This means that across the board, the firms market share will differ from range to range.
Strategic Strength
Strategic strength looks at the core competency of the
business.
'basic' trading roles. Michael Porter (1980) pointed out 3 values that made up successful core competency:
Provides consumer benefits Not easy for competitors imitate Can be applied to a variety of products and markets
are:
Product Differentiation Product Efficiency
minority of the market i.e. those of higher incomes, who want a luxurious product to associate with their lofty status.
them from rivals is one of differentiation, through providing both a luxurious vehicle, as well as one that is up to par with the latest performance figures.
DI FFE R E N T I T I N A O
Classic/Rare Vehicles & Indirect Competition
BRO AD
NARRO W
C O M PE TI I E T V A D V A N TA G E
C O M PE T I I E T V S C O PE
STRATEGIC FIT
Strategic fit refers to how a firm adapts its business practices
essential that Mercedes-Benz react appropriately to maintain their competitiveness in the market.
STRATEGIC FIT
Taking into account Mercedes' strengths, it is well equipped to deal with the current changes in the external environment.
Their strong brand name ensures that up-and-coming professionals will always aspire to own a Mercedes car to adopt the prestige associated with the brand. This will stay constant even throughout times of economic upheaval.
Additionally, the good resale value of their products will mean that buyers will not be as worried about the depreciation value of the car should circumstances force them to sale it on.
Lastly, the businesses good relationship with the government and EU will mean that they could rely on tax reductions and stimulus packages should production be heavily affected by the motor vehicle crisis.
On the downside, the price will still be a hindrance when trying to attract new custom, especially given the hardship experienced when trying to obtain finance from creditors.
PRODUCT SUGGESTION
We would suggest that Mercedes-Benz
considered developing a product that would be suited to today's economic climate and social trends.
(although not so cheap as to compromise their luxury status), have low running costs and be highly eco-efficient.
E co n o m y
Pro d u ct
R e ce ssi n o I fl ti n n a o R e d u ce C o sts I te re st ra te s n
S u i b l Pri ta e ce
N o t exp e n si ra n g e ve
S m a le r C a r l Le ss S a vi g s n D i cu l to g e t Fi a n ce . ffi t n S m a le r E n g i e l n
ADVANTAGES
The new product has wider target market. Attract consumers with a high, as well as middlelow incomes. Smaller engine will help reduce petrol cost. Insurance will be cheaper Has a lot of potential to be successful.
DISADVANTAGES
May compromise Mercedes-Benz's luxury product status. Research & Development into product could be costly, as well as manufacturing costs. May replace existing products in their range portfolio.