Project Portfolio Management - Mercedes - Research Paper Example

?Project Portfolio Management Table of Contents Overview 3 Automotive Industry 3 Company 4 Mission ment and Strategies 4 SBU Mission and Strategies 5 Organization Structure of Mercedes Benz 5 Proposed Portfolio Process 6 Selection Criteria 8 Implication of the Current Organization Structure on New Project 9 Overview The most significant aspect for the organizations has been to ensure that there are sufficient resources in order to complete the projects thus leading to competitive advantage. Project Portfolio Management can be identified as a collection of the business practices as well as processes permitting the organization to administer the projects as one of the strategic portfolio. It further ensures that the programs and projects are aligned with the organizational objectives. It is the duty of the executives to regularly look after the complete portfolio as well as programs, determine the significance of the project, allotment of the funds, staging the start of the new project and thus continuously monitor its progress (Wisconsin School of Business, 2011). Automotive Industry Apart from housing, the most significant possession for an America is the motor vehicles. One of the biggest automotive industries in the global economy has been recognized as the US automotive industry. None other sectors or industries have been argued to generate the business as much as the US manufacturing industry does and thus it is the US automotive industry that plays a vital role in the GDP structure of the economy. The productivity of the automotive industry in the US has been higher in comparison to other industries and thus there has been significant growth in the level of output with the pace of time (McAlinden, 2003). Company The company chosen for the study is Mercedes which was established by Gottlieb Daimler together with Carl Benz in the year 1886. Presently, the entity is operating under the parent company as Daimler AG which is one of the leading automobile companies in the global market (Daimler, 2011). Mission Statement and Strategies The mission of Mercedes Benz is to demonstrate the purpose of the company in clear stated terms. The company is committed to provide excellent services thus establishing value for its brands, dealers as well as customers. The company’s mission is to assist in the overall success of its parent company Daimler and further to create numerous opportunities for its employees. Notably, Mercedes-Benz has been successful at achieving higher profitability and market position in the year 2010. The company aims at making the future mobility less risky as well as sustainable. The activities performed by them are completely focused upon the needs of the customers. Therefore, they tend to inspire the customers with premium automobiles featuring proper design, perceived value, reliability as well as comfort. It provides its customers with the commercial cars that are competitive. The company also provides service packages in order to delight its customers (Daimler, 2010). SBU Mission and Strategies It is to be mentioned that the strategic business unit (SBU) is different from other business segments that is engaged with serving an external market whereby the management is capable of conducting planning in relation to products and services. SBUs have their particular strategies as well as objectives related to their sole purposes. It has been observed from the annual report that there are four main classifications of the DaimlerChrysler AG such as DaimlerChrysler Services, Commercial Vehicles Division, Mercedes Car Group and Chrysler Group. There are three different SBUs of Mercedes Benz such as passenger cars, trucks and buses and vans. The mission of each of the SBUs at Mercedes Benz is to become the most successful manufacturer of the car in both premium as well as luxury segment. Its portfolios also include cars that make use of hybridization and locally emission-free electric engines (UBS Paris Auto Show Investor Conference, 2010). Organization Structure of Mercedes Benz The CEO of the company is Dieter Zetsche who is responsible for Daimler financial services, Daimler buses, vans, Daimler trucks, Daimler financial services, Mercedes-Benz car, human resource & labor relation and other affairs of the organization. The Chairman of the Board is Manfred Bischoff who is engaged with the monitoring of the entire organizational process (The Official Board, 2011). Proposed Portfolio Process It has been noted that the Mercedes Benz cars are successful at plummeting the CO2 emission at its passenger’s car to 158 grams that is sold at the European Union in the year 2010. However looking at the present scenario the companies need to focus upon the zero percent CO2 emission and thus must aim at the reduction of the consumption of the fuel. With the help of four organizations namely the International Transport Forum, International Energy Agency, FIA Foundation as well as United Nations Environment Programme that has created an initiative Global Fuel Efficient Initiative so that the vehicles’ efficiency can be improved all over the globe. If Mercedes Benz collaborates with the GFEI, it will be capable of reducing its fuel consumption by 50% and thus lessen CO2 emission as well. It can be stated that this SBU of Mercedes Benz requires working closely with the government in order to make sure that there are effective regulatory standards. It is to be mentioned that the company will be capable of augmenting the car fuel economy in a cost effective manner. Furthermore, with the help of the grid-connected battery electric vehicle, there would be significant efficiency improvements (FIA Foundation, n.d.). Global warming is the biggest issue of the recent times. With concern to this issue, it is to be mentioned that if the fuel efficiency can be improved via new fuel efficient Mercedes car, there will be reduction in the vehicular emissions that leads to change in the climate. Therefore, it becomes utmost important for the automobile industries to consider its role for the betterment of the global warming situations. It is in this context that project portfolio process is a procedure which assists in capitalizing on the outputs potential of the projects conducted by the organization in a given time. The various steps of the portfolio management process are “identification, categorization, evaluation, selection, prioritization, balancing, authorization, review and reporting and strategic change” (BOT International, 2011). However, in this context, the current issues that the automobile industry faces have been identified. On the basis of those issues, it has been tried to develop a new SBU for the Mercedes Benz along with the formation of new goals and objectives for the company. Portfolio of strategic choices has been made and different strategies have been proposed. A strategy that can be implemented has been advised for this project. Also, the project selection has been advised by taking approval from the authorities. Finally, it becomes significant to continuously monitor the project and modify according to the requirements. It has been noted that the mission of the company is to focus upon the fuel efficiency and thus reduce the CO2 emission as much as possible so that the global environment can be protected from the harms done by such conducts. By creating such SBUs, the company will be able to accomplish its goals and thus achieve success in the near future providing higher rates of return to its shareholders. Selection Criteria The PPM selection criteria include the following model that has been presented below. (Source: Subramaniam, 2009) It is to be mentioned that the organizational objective has been the reduction of the emission and focusing upon the fuel efficient cars. It is in this context that the proposed SBU seems to fit with the organizational objectives. Global Fuel Efficient Initiative Model has been selected that can assist Mercedes Benz in the achievement of the goals of the organization. It will assist in making the project successful. The chosen SBU needs to be managed by the company in a better manner so that the new initiative taken can be successfully applied. The senior management needs to play a vital role in the development of the new SBU. Both financial as well as non financial weighted criteria can be applied by the company for assessing the project proposal. Implication of the Current Organization Structure on New Project It is to be mentioned that when such new projects are prepared, it triggers change in the overall organizational structure. A new organization structure has to be built for effectively implementing the new project. Mercedes Benz may require having certain changes in its current organizational structure with the development of the new product. The reason behind this strategy is that it is likely to call for new job roles and responsibilities and therefore require additional human resource to manage the new SBU of Mercedes-Benz. A separate department may have to be created for this new SBU. By doing so, the organizational performance will be enhanced and thus the SBU shall attain efficiency in its operations. References BOT International, (2011). Portfolio Management Process. Portfolio Management Process. Retrieved Online on September 15, 2011 from http://www.botinternational.com/portfolio_management.htm Daimler, (2010). Annual Report 2010. Management Report. Retrieved Online on September 15, 2011 from http://www.daimler.com/Projects/c2c/channel/documents/1985489_Daimler_Annual_Report_2010.pdf FIA Foundation, (No Date). Introduction. Fuel Efficiency and Climate Change. Retrieved Online on September 15, 2011 from http://www.fiafoundation.org/50by50/documents/50BY50_report.pdf McAlienden, S. P., (2003). Economic Contribution of the Automotive Industry to the US Economy – An Update. Study Introduction. Retrieved Online on September 15, 2011 from http://cargroup.org/pdfs/Alliance-Final.pdf Subramaniam, A., (2009). Project Portfolio Management. Selection Criteria. Retrieved Online on September 15, 2011 from http://www.slideshare.net/anandsubramaniam/project-portfolio-management The Official Board, (2011). Update History. Daimler. . Retrieved Online on September 15, 2011 from http://www.theofficialboard.com/org-chart/daimler UBS Paris Auto Show Investor Conference, 2010. Strategy and Targets of Mercedes-Benz Cars Sales and Marketing. Our Current Performance. Retrieved Online on September 15, 2011 from http://www.daimler.com/Projects/c2c/channel/documents/1931898_Daimler_UBS_Paris_DJSchmidt_Handout.pdf Wisconsin School of Business, (2011). Project Portfolio Management. Overview. Retrieved Online on September 15, 2011 from http://exed.wisc.edu/Courses/Project-Portfolio-Management Read More