Company Evaluation: Mercedes-Benz - Case Study Example

Company Evaluation: Mercedes-Benz Grade (Oct. 19th, Table of contents Executive summary………………………………………………………………………………3 Introduction………………………………………………………………………………………4 Analysis of Mercedes-Benz….……………………………………………………………………5 Market Share…………………………….….……………………………………..………………5 Brand Mercedes-Benz in the USA market….………………………………..……………………5 Brand Mercedes-Benz in the European and Asian market…………………..……………………5 Brand Mercedes-Benz New Markets in North America……………………..……………………6 Brand Mercedes-Benz New Markets in Asia…………….…………………..……………………6 Brand Mercedes-Benz in Domestic Market…………………………………………...…………..7 Brand Mercedes-Benz Research and Development.........................................................................7 Brand Mercedes-Benz Business strategies...........……….…………………..……………………8 Works Cited………………………………..…….…………………..………………..............…10 Company Evaluation: Mercedes-Benz Executive summary Mercedes-Benz is a company that has been in existence since 1886, and has maintained the legacy of the top brand in the automobile industry (Adler, 22). The Mercedes-Benz brands have managed to secure a large market share globally, with the brand leading in the size of market share for the American premium car market segment, while also holding an equally leading market share role both in Europe and Asia. The ability to secure the high market share has been made possible by the commitment of the company to invest in Research & Development, where the company committed $12 billion for research for the year 2013, whose impact was noticeable through the record keeping sales that the company registered in 2013 (Li, n.p.). Further, the Mercedes-Benz company has managed to perfect the premium pricing strategy, which has in turn made it possible for the high income class to favor the purchase of the Mercedes-Benz brands, and in return this high class of the society is rewarded through the high status, prestige and comfort offered by the brands. Introduction Mercedes-Benz is an automobile manufacturing company with its origin in Germany, but has many branches that are spread worldwide (Ireland, 98). Mercedes-Benz is among the top brands globally, owing to its production of high-class and luxurious automobiles, specifically known for their ability to last for many years without losing shape or color appearance, as well as the high level of comfort for the drivers and passengers riding in this brand of vehicles. The origin of this brand dates back to 1886, when Karl Benz, who is one of the founders of the Mercedes-Benz brand, invented the Benz Motorwagen, which was then improved under Gottlieb Daimler’s series of inventions and incorporated into the Mercedes shafts that he developed in 1901, thus forming the car brand under the name Mercedes-Benz (Adler, 7). Therefore, the Mercedes-Benz brand is now a major brand product under the Daimler AG as the mother company, with its headquarters in Germany, currently ranking among the best 3 luxury car brands globally, together with the BMW which is also an automobile brand with its origin in Germany (Daimler, n.p.). The brand competitiveness of Mercedes-Benz emanates from its invention as the first petrol-powered automobile in a world where most of the automobiles were powered otherwise (Adler, 13). The dominance of the brand is also attained through a series of inventions and improvements that were made in this brand by the famous automobile inventors ever known, allowing it to remain at the top of the most popular and highly rated luxury automobiles both in the traditional and modern day. The range of automobile types manufactured under this brand includes cars, buses and trucks (Adler, 2). Analysis of Mercedes-Benz Market share Brand Mercedes-Benz in the USA market Mercedes-Benz is the top of the range premium car targeted at the high income earners, and any time the brand Mercedes-Benz is mentioned, all that comes to the mind is prestige, luxury and fame (Li, n.p.). Thus, while it is expected that other cheaper brands are likely to gain a bigger market share owing to the target market of this brand, the reality is different. Mercedes-Benz has among the largest share in the premium car market, and the market share for this company seems to be expanding further, with a record sale being registered in the year 2013, where the brand Mercedes-Benz sold 1.46 million cars globally (Daimler, n.p.). In the USA automobile market, Mercedes-Benz was the best brand sold among the top segment of the premium cars, where 20% of all the car sales for Mercedes-Benz in the year 2013 were sold to the USA market (Daimler, n.p.). Therefore, the fact that in the year 2013 the brand Mercedes-Benz sold 1.46 million premium cars globally, the USA market accounts for the purchase of 292,000 premium cars from this brand which makes Mercedes-Benz the top brand in the USA premium car category. Brand Mercedes-Benz in the European and Asian market Further, the 2014 statistics for this company seems to be even better, with the brand Mercedes-Benz recording an increase of 15.4% in premium car sales globally for the month of January, compared to the same period in the year 2013 (Daimler, n.p.). The greatest market growth for the brand is in the Chinese market, where the brand has been gaining popularity over the past few years, making it possible for the Mercedes-Benz brand to sell 109,477 more vehicles in January 2014 than it sold in January 2013. In Europe alone, there was a huge growth in the market of the brand Mercedes-Benz, where the demand for this brand in the UK market increased by 15.1% in January 2014, while the increase was even higher in Russia at 42.5%, while the German market increased its demand for the brand in the January of 2014 by 8.4% (Daimler, n.p.). Thus, the Mercedes-Benz brand does not only rule in the foreign premium car market, but also dominates the home market as the brand with the highest new car registration domestically, accounting for 9.2%. Brand Mercedes-Benz New Markets in North America Further, 2014 seems to be the year for the brand Mercedes-Benz to keep new sales record, considering the fact that the brand has also found new demand in the North America premium car market, where the brand increased its demand by 0.5% in the USA market which is the brands largest market so far, while also growing its demand by 30.1% in the Canadian premium car market in January 2014 (Daimler, n.p.). Brand Mercedes-Benz New Markets in Asia The most important thing to note about the Mercedes-Benz brand is that; it has also found acceptability and recognition even in the Asian market, where rival brands such as Toyota trace their origin. Despite the fact that Toyota is the most demanded and purchased car both in its homeland Japan and also in Asia amongst the middle class, the Mercedes-Benz brand has created a record of being the highest selling imported premium brand in Japan (Daimler, n.p.). This recognition serves to indicate that Mercedes-Benz is a popular brand in the premium car market, and its popularity continues to grow year after year, owing to its strong luxurious and prestigious status that has not been successfully rivaled by other brands, safe for BMW which shares the same prestigious status. In the Chinese and the Hong Kong market, the brand increased its demand with a remarkable 44.9% in January of 2014 compared to the same period in 2013 (Daimler, n.p.). However, the notable growth in the demand of the brand Mercedes-Benz in the Asian market was registered in both India and South Korea, where the brand increased its demand in India by 54.0% and even surpassed any record in demand growth for premium cars, by registering a demand growth of 89.5% in the South Korean premium car market (Daimler, n.p.). Brand Mercedes-Benz in Domestic Market The popularity of this brand has not only been registered in the fuel driven brand models, but also in the electric car market segment, where the brand Mercedes-Benz held a market share of 30%, which is the biggest market shares held by any single company in the registered electric car market in Germany (Daimler, n.p.). The analysis of the market share of the brand Mercedes-Benz thus serves to show that the brand is not only the ruling brand in the domestic market, but also globally. Brand Mercedes-Benz Research and development Research and development is an area of high focus by the brand Mercedes-Benz, considering the fact that the brand has managed to remain on top of the global luxurious and prestigious cars brands for a century. The brand was first invented in 1886, but was passed through a series of innovations and improvements through the next five decades, until the brand was first launched as a fully fledged car brand in 1926 (Adler, 27). The culture of research and development has continued to be the guiding principle for the brand Mercedes-Benz ever since, allowing the brand to rank as the best in luxury and comfort among the brands in the premium car market segment. The best indicator that research and development holds a top priority in the strategy of the brand Mercedes-Benz, the company allocated a massive $12bn for research and development function for the year 2013 (Li, n.p.). It is such financial allocations to a single function of the company that has ensured that innovations and inventions have continued to register in the Mercedes-Benz brands, where the company has been able to release several models, all of them characterized by different automobile features. The research and development commitment by the company has rewarded the brand well, considering that it has ranked as the first in introducing various state-of-the-art technologies in automobiles, making the brand remain a strong competitor in the prestigious car category (Daimler, n.p.). The brand Mercedes-Benz was the first to introduce new inventions such as diesel engines, creating the first petrol-fueled car, introducing fuel injections and also inventing the unlocking brake system (Ireland, 99). These are major achievements of the company that cannot be taken away from it, all dedicated to the commitment of the company to invest heavily in the research and development function. Further, the company has ranked the top inventor in the motor sports world, with the introduction of the McLaren Mercedes for the motor sports, which has consistently remained a top brand in the sports world (Adler, 44). In addition, the Mercedes-Benz company holds the world record for the highest number of safety inventions and features that have been patented in the automobile industry (Daimler, n.p.). The company ranked as the first to invent features such as the shatter-free windows, the steering wheels that are easily collapsible as well as the safety airbags, making it possible for the Mercedes-Benz company to design some of the safest cars existing in the market (Ireland, 98). Brand Mercedes-Benz Business strategy The business strategy for the brand Mercedes-Benz is purely laid down to target the top income earners in the society, through designing premium car brands that are expensive and not easily accessible, such that the brands can remain the preserve of the rich and famous in the society (Li, n.p.). Therefore, premium pricing strategy is the major strategy that the brand Mercedes-Benz applies in its marketing, such that it becomes possible for the brand to target the high income class, sell the brands at relatively high prices and get high profits even when the volume of the units sold are few (Li, n.p.). The higher costs of the cars are compensated for by the high quality brands that the Mercedes-Benz company offers for its customers, thus making the customers feel happy to pay more, since their high social status, prestige and comfort is guaranteed in a way that the lower social classes cannot be able to compete. Further, the premium pricing strategy is compensated for by the provision of a range of quality choices from which the customers can select, with different classes of Mercedes-Benz brands being availed for the customers to determine their preferences (Li, n.p.). Works Cited Adler, Dennis. Mercedes-benz: 110 Years of Excellence. Osceola, WI: Motorbooks International, 1995. Print. Daimler. Sales figures: Mercedes-Benz with strong sales increase at the start of the year. Daimler Company News, February 5, 2014. Available at: http://www.daimler.com/dccom/0-5-7153-1-1670672-1-0-0-0-0-0-0-7145-0-0-0-0-0-0-0.html Ireland, Duane. Understanding Business Strategy: Concepts and Cases. Cengage Learning, 2005. 98-112. Print. Li, Joe. Innovative marketing strategy brings success to Mercedes-Benz. The Daily Pennsylvanian, April 17, 2014. Available at: http://www.thedp.com/article/2014/04/how-mercedes-markets-itself Read More