Related Industries and Competitors of Mercedes Benz - Essay Example

Thesis ment: Today, Mercedes Benz is a brand among the most popular brands in the world. The company grew over the years to become one of the leading suppliers of automobiles around the world. 1. Introduction 2. Background of the Company 3. Products offered 4. Related Industries and Competitors a) Michelin b) Dunlop c) Ferari d) Bridgestone e) Firestone 5. Marketing strategy 6. Challenges and opportunities 1. Introduction The success of the leading companies depends on the strategies the company incorporates. Innovation of new ideas, which brings forth new products, is a factor behind this success. However, global companies have failed due to lack of customer satisfaction. Mercedes Benz is a company that for years has realized its goals by providing best automobile products to clients although critics argue that the price is unfriendly. 2. Background of the company The Mercedes Benz is a leading German automobile manufacturer with global presence through subsidiaries in various parts of the world. It deals with production of a wide range of vehicles including luxurious cars, buses, coaches, and trucks. The world’s leader in luxury cars has its origin traced back to German citizens in the name of Karl Benz and Gottlieb Daimler. Over the years, the company has brought in diverse hi-tech and safety improvement that other vehicle manufacturers have borrowed (Kristin 112). Today, brand name is among the most popular brands in the world. The company grew over the years to become one of the leading suppliers of automobiles around the world. 3. Products offered Since the formation of the company, it has preserved a global repute of quality and resilience, winning various quality awards around the world. The company enjoyed a relatively low competition in its formative years, but as more and more companies entered into the production of internal combustion engine cars, competition for the customers continued to grow around the globe. The company however, held a grip of the market for the most part of the last century due to its defined market target for its products. The provision of luxurious and stylish cars made the company attain a divergent market that comprised mainly of the rich and leaders around the world. However, as more companies ventured in the production of similarly deluxe, elegant and cheaper cars, its popularity started to exhibit a slowed growth and losing its grip as the leading supplier of quality and durable cars. Major competitors include the Audi, BMW, Toyota, Lexus, Land Rovers, Fox wagon, the Cadillac model, and the prestigious Porsche among others. The company prides in the production of the lavish Mercedes Benz models including cars buses, trucks and buses as well (Koichi 111). At some point, the company produced sport cars, but has since then withdrawn from it. 4. Related industries and competitors The year 1958 saw the company enter into a distribution treaty with Studebaker- Packard, a marketing company of Indiana in the United States of America, which marked the beginning of its numerous subsidiaries around the states as well as other countries around the world. At present, the company has many outlets in several countries for assembling or full manufacture of the luxurious brand automobiles. These subsidiaries are now operational in several countries in South America, Africa, Asia; especially south eastern parts, parts of Europe and North America, giving the company a global representation. The company has close relation with tyre industries including companies like Michelin, Dunlop, Ferari, Bridgestone, and Firestone among others, leather companies, paint and adhesive companies as well as several marketing industry players. 5. Marketing strategy The company’s marketing strategy has traditionally focused on the luxury, precise engineering, and safety of the cars it produces. However, more recently owing to increased competition from other manufacturers of luxury cars, increasing cost of production and changing consumer preferences, the approach has shifted a life style focused one, aimed at portraying a more youthful, simple and energetic view of the model. The company in recent days expanded it scope of products providing more competitive and simple brand suitable for different age groups including the youth. It is investing in facilitating communication with its clients using the internet, to ensure consumers can access any information as it maintains its culture of excellence in customer service. 6. Challenges and opportunities The challenges facing the Mercedes Benz Company are generic across the automobile industry around the world. These include: High competition in the industry; the industry has a high level of competition leading to pressure on the company to bring in more innovative and competitive cars into the market while maintaining the elegance that defines the brand. The manufacturing arm of the company, particularly assembly, is under enormous and persisted pressure occasioned by the speedy development of low cost labour markets in the Eastern parts of Europe, Southern part of East Asia, India and China which make other competing brand offer low price products. There is a steady increase of other quality brands being introduced to the market providing equally good services as well as offer prices that are more competitive (Xiaohua 56). Sustainability concerns; The increasing awareness of environmental consideration in product designs, regulatory obligations to take care of the environment and public opinions are influencing manufacturers’ decisions on the choice of materials, engine types and the vehicle end life, into a life cycle analysis of the product to the environment. Designers and decision makers have to put this consideration into new product designs as well as remodelling of the existing models, as they account for this through sharing information with other manufacturers, the public, conservation bodies, and environmental protection authorities. This adds many costs to the production process making it hard to tag prices that enable them make a profit. Management of Supply chains and reduction of costs; the company has a global market presence led by subsidiaries in various places in the world. The dynamic nature of the global supply chains provide opportunities for improvement without offering a chance for optimising their performance due to this changing state of affairs. This puts supply chain mangers under constant pressure for efficiency in logistics and costs (David 32). Regulatory obligations; there are many trade obligations being imposed on manufacturers across board, and the company has not been excluded either. These regulations, for example the famous block exemption regulation, were made to encourage price harmonization, promote competition between brands as well as take care of the consumer. The end effect they created was a decline in of sales in some brand prominent from certain regions, especially West Europe, the company’s backyard. It created the need to restructure the companies approach to marketing in order to maintain a grip of the market share implying increased costs. Emerging global markets; the rapid development of economies in emerging markets especially China India and Brazil provide the company with great chances to expand their sales and minimise on the production costs. There exist a great opportunity to get into contracts with suppliers in such markets in order to easily fight completion especially from the native direct competitors and other suppliers aiming to control prices. Large populations in such countries promise both a cheap source of labour as well as a ready market for the products. Technology; the company is continuously improving its new products to take care of the varied consumer needs thanks to technology. Through adaption of new technological innovations the company has been able to produce low fuel consuming models like the new 5.5 litres V8 engines as well as the specialised models for the blind, handicapped and other features. The only sure way the company will retain its presence in the global market is adapting superior models that are technologically inspired as well as embark on producing cheaper cars to cater for the growing demand among the middle classes of the society (Geoffrey 98). In conclusion, the Mercedes Benz Company has withstood numerous challenges since its formation to dominate the automobile market with quality and comfortable brands. The company however, is increasingly being faced with steeper competition for the luxury cars it is known for, and therefore there is urgent need to embrace technology in assuring a variety of products that match the consumer needs. Work cited David, Beecroft. History of the American Automobile Industry. Lulu.com, 2009. Print. Geoffrey, De Holden-Stone. The Automobile Industry. New York: General Books LLC, 2009. Print. Koichi, Shimokawa. The Japanese automobile industry: a business history. London: Continuum International Publishing Group, 2000. Print. Kristin, Petrie. Automobiles: Everyday Invention. New York:ABDO, 2008. Print. Xiaohua, Yang. Globalization of the automobile industry: the United States, Japan, and the People's Republic of China. Beijing: Greenwood Publishing Group, 1999. Print. Read More