Strategic Management 2022 Analysis

Running Head: STRATEGIC MANAGEMENT
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Strategic
Management
Student Details:

STRATEGIC MANAGEMENT 1
External and Internal analysis
PESTEL
Political: China implemented “Made in China 2025” strategy for clearing policies and targets
(Wildau, 2019). This national development policy helped Mercedes-Benz as the country
wanted to move towards the high-tech industries of manufacturing involving investments in
research and innovation, heavy government subsidies, and targets for local manufacturing.
Economic: Due to the risk of increasing air pollution, the country posed for economic
development and reduction in foreign oil dependency where Beijing made an investment for
EVs development and to build necessary supply chain. The China’s market was opened to
economic reform and invited foreign entrants previously while forming joint ventures of local
partners. The passenger-car manufacturing industry exploded its car sales in China showed
first slip in combustion engine sales dropped by 2.8 per cent (Kamchev, 2019).
Social: In China, Daimler need to responsive towards local consumers having specific
preferences where they require cars demonstrate online functionality increasing based on
WeChat app of Tencent facilitating communications (Lee, 2019).
Technology: China was required to leverage huge transformation of domestic market from
being a technology follower to technology leaders. In terms of moving towards an EV future
in China, there is severe issue of urban pollution in emerging markets where the local senior
management of Daimler faced conflicting pressures. This required technology sector to move
faster where Chinese government mandated technology advancements in vehicle
electrification for global leadership development in automobile industry (Masiero, et al.,
2016).
Environmental: The approach used by China was proven successful of using sustainable
energy which resulted from start subsidies to encouraging the company and reducing overall
costs. Legal: In China, the president Xi Jingping was a powerful leader who developed strong
guidelines for vehicle electrification with the approval of only new joint ventures where
Daimler announced a new US$740 million battery factory for EV (electric vehicles) of
Mercedes-Benz in China (Shepardson, 2018).

STRATEGIC MANAGEMENT 2
Legal: The government in China planned to spend $50 billion for strengthening its domestic
auto industry in line with the strategy of “Made in China 2025” (Helven, 2019).
SWOT
Strengths: Daimler is focused towards future, growth and internationalisation and has its
own five segments including Mercedes Benz. Daimler is one of the top luxury automobile
across the globe holding 15 per cent stake in different areas (Rauwald, 2019).
Weaknesses: Daimler’s weakness in terms of sales growth in its expensiveness after sales
maintenance and service. Moreover, there is low-key performance of its division of trucks
and buses.
Opportunities: Daimler has the opportunity of shaping diverse innovations where new
standards for pollutants emissions, fuel efficiency, and automotive safety were introduced by
the government making stricter regulations for new development emergence such as cars
electrification, ride sharing, autonomous vehicles and change in consumer preferences.
Threats: In automobile, China faced the problem of large-scale pollution due to driving
growth and population. Due to air pollution, China has decreased its lifespan from close to
three years and for other companies like Mercedes Benz market as well.
Porter’s five forces
Power of suppliers: There is a high power of suppliers in China where some countries
implemented incentives where authorities introduced policies for guaranteeing sales by
building supply for Chinese markers through procurement for public fleets. Moreover, Tesla
and BMW were making their own deals to lock down supply while Daimler partnered up
with auto supplier Bosch for intensifying fully automated cars development along with
driverless vehicles (Taylor, 2017).
Power of buyers: There is high power of buyers where they are provided with several
benefits for those buying electric cars such as no sales tax, no import tax, free access to toll
roads, no vehicle-registration fees, and free parking in some city regions; also there is a
policy for demand of buyer subsidies and rebates (Clover, 2017).