Business strategy

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BUSINESS STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................3
P1 Applying appropriate model examine the effect and cause of the external environment
within business organisation and its strategies....................................................................3
P2 Analyse the micro environment factors and ability of a presented business organisation
using appropriate frameworks...............................................................................................5
P3 Measure Porter's Five Forces model for assessing competitive analysis within market
place........................................................................................................................................8
P4 Different Strategic planning for the business organisation............................................10
CONCLUSION .............................................................................................................................11
REFERENCES .............................................................................................................................12

INTRODUCTION
Business strategy refers to the procedure that helps the organisation to accomplish
objective inside the company within a stipulated period of time. The organisation focuses on
building effective strategy in order to achieve favourable outcomes. This assists in boosting the
performance of company for achieve target within a given time period. This report is prepared
for the Mercedes company, the manager emphasised on making an appropriate plan, policies and
strategies that helps in enhancing future growth and development of the business organisation.
In current context, it includes PESTLE analysis for identifying the macro environment that
imposes direct impact on activities of the company. In addition to this, SWOT and VRIO assess
is used for analysing inner capabilities of the firm (Alstete and Beutell, 2016). It also involves
Porter's five force model for gaining competitive advantage at marketplace. Beside from this,
Ansoff matrix is used for analysing strategic option for the business organisation.
P1 Applying appropriate model examine the effect and cause of the external environment within
business organisation and its strategies
It is essential to assess external environmental factor for operating its business activities
and function in appropriate manner. In discourse of Mercedes, the management team used
PESTLE analyses for determining the cause of macro environment on company which is going
to be discussed below:
Political Factor: Political Factors involves rules, laws, restriction and many more. It
plays a very important function in every organisation to be stable within the market. In context of
Mercedes, the top management focuses on offering superior car facility at low cost for satisfying
the need and want of customer. In assistance of this, taxation policy is the important political
factor that directly effect on import of Mercedes company. The government structure and import
duty result in accelerate the price of car of the business organisation. The manager of Mercedes
company focuses on boosting sales for future growth and development of the business
organisation.(Cagnin, 2018)Change in taxation policy and export duty directly affect the
operations of its business in adverse manner. Crude oil is one of the beneficial factor for the
growth of the company.
Economic Factor: It plays important role in every company for accelerating productivity
and profitability level. It involves deflation as well as inflation rate that imposes direct impact on

future sales of the organisation. Beside from this, due to increase in inflation rate affect
negatively on the operation of business organisation. In order to accelerate inflation rate people
invest less money in buying a car. So Mercedes company face a difficulty in selling a car. The
manager of business organisation focuses on providing superior quality car to its customer at low
price for satisfying them. It helps in boosting the reputation and brand image of the business
organisation.
Social Factor: It includes different factors such as region, income, age and demographics
that imposes direct impact on productivity of the business organisation. Mercedes is one of the
well reputed company that focuses on assessing the customer need and preferences for boosting
future sales of company. The production of car based on needs of user for accelerating profit
level. Beside from this, the manager of Mercedes emphasised on change in consumer lifestyle
and preferences for achieving competitive advantage at marketplace. The R&D Department of
company identifying needs of user that helps in accelerating profitability of the company.
Therefore, the business organisation provide superior car to its customer in order to satisfying
them.
Technological Factor: Technology play an essential role in every company for boosting
productivity and profitability of the business organisation . It helps company in increasing its
online business through publicity, word of mouth and sponsorship. The latest technology helps
in doing paperless work and eliminate manpower that imposes direct impact on production of
company in pleasing manner. In reference of Mercedes, the high authority emphasised on
executing latest technology for future growth of the business organisation. Therefore, the primal
motive of business organisation is to implement latest technology for offering superior quality
products to its user (Gupta, 2016) It helps in accelerating future growth and development of the
company. The implementation of latest technology is important for future growth and
development of the business organisation.
Environmental factor: In today's context, the company that performs its functions and
operations towards best interest of social group. In reference of Mercedes, the manager focuses
on climatic condition which directly affect the timely deliver car. They also emphasised on
recycling and managing the waste product for preventing society from pollution. It assists the
company in enhancing the reputation and brand image of business organisation.

Legal Factor: It involves rules, regulation, law and legislation which directly impact the
profitability of the company. The auto mobile industry must follow all rules and regulation which
directly impact the activities and functions of company. This is important for Mercedes company
to follow the law in order to protect the valuable information. Th protection of information and
data is essential for gaining competitive advantages over rival competitive firms. The
management team of Mercedes provide equal opportunities to all subordinates regardless of age,
gender, caste and religion.
On basis of above given external environmental factor, Mercedes emphasised on
implementing latest technology for reducing paper work for achieving competitive advantage in
the marketplace. In assistance of this, the Mercedes company implement advanced technology
for achieving competitive advantage within marketplace.
P2 Analyse the micro environment factors and ability of a presented business organisation using
appropriate frameworks
To effectively analysis micro environment of the company , Mercedes has adopt the
SWOT and VRIO that assists in increasing the knowledge and skill of inner capabilities of firm
which is going to be discussed below:
Strength Weakness
 Mercedes is a well reputed company
having strong brand image inside
marketplace. They follow innovative
technique to offer superior quality
product s to its customer (Lai, Melloni
and Stacchezzini, 2016)
 Mercedes has achieve leading position
in the marketplace for increasing
profits as well as revenue for further
success and development of business
organisation.

 The company does not build
appropriate business strategies, plan
and policies for increasing customer
loyalty & trust for enhancing
productivity as well as productivity
level.
 Herein, the main weakness of company
is arising conflicts and grievance at the
workplace that imposes negative impact
on the performance of subordinates in
market.
Opportunity Threat

 The main advantage of Mercedes is to
implement advanced technology in the
workplace in order to attract more and
more customer for achieving
profitability level.
 The other benefit for Mercedes
company is to provide the superior
quality car to its customer that is
different from competitor products.
 There are different competitor of
Mercedes available in market such as
Audi and Ferrari which increases the
threat of competitive rivalry in the
workplace.
 The government regulations and
taxation policy is major threat available
in the marketplace.
VRIO Model
Resources Valuable Rarity Inimitable Organised What is the
result?
Global
existence
Global
existence
- - - Competitive
advantage
Distribution
Network
Distribution
Network
Distribution
Network
- - Partially
competitive
Financial
resources
Financial
resources
Financial
resources
Financial
resources
- Competitive
benefits on
temporary
basis.
Competitive
subordinates
Competitive
subordinates
Competitive
subordinates
Competitive
subordinates
- Competitive
advantage
To assess internal factor in suitable mode, Mercedes use the four resources like Global
existence, Distribution Network, Financial Resources and competent subordinates.
Valuable: Valuable resources is described as a process in which have capability to add
economic value for its user for achieving competitive benefits at the marketplace (Langabeer and
Champagne, 2016) In reference of Mercedes, those resources which is going to be given below:
Global Existence: Mercedes have an existence around the international market that helps
company in achieving competitive advantage over rival firms.

Distribution Network: This network assists business organisation to provide timely
bringing products and services to buyer that boost profitability of company.
Financial Resources: The business organisation focuses on offering superior quality
products and services that is differ from competitive firms that helps in maintaining customer
loyalty and trust.
Competent Subordinates: The HR Manager of Mercedes recruit competent staff
member which leads to boosting productivity of company.
Rarity: It involves those factors which are specific and unique for achieving competitive
advantage in the workplace. It helps in assessing global existence is not unique for Mercedes
because there are various company that have a global existence. The rare resources of Mercedes
which is going to be discussed below:
Distribution Network: In order to deliver products on time to its user which is not
duplicated by any company. It assists in increase future sales and growth of business
organisation.
Financial Resources: Hereby, the company offer specific accessories of car to its user
for sustaining them for a long duration of time that cannot be copied by other business
organisation.
Competent subordinates: The training provided by this company is unique as well as
specific that is rare which assists in increasing profitability of business organisation.
Inimitable: These are those resources that is not inimitable by rival firm. In discourse to
Mercedes company, the supervisor execute latest technology that is inimitable by competitive
firms.
Financial Resources: The personnel of Mercedes company operates its business
activities and functions in an effective manner that helps them in accomplishing organisational
objectives within a given period of time.
Competent subordinates: Training provided by Mercedes is inimitable by its rival
business in order to accelerate sale and profitability level.
Organised: It involves those resources that need to be organised in appropriate manner for
accomplishing goal and objective of business organisation. The effective training offered by
Mercedes for increasing skill and knowledge of staff members in order to achieve the current
need of the business organisation (Linder and Williander, 2017).

Competent Subordinates: Due to extremely efficient and competent worker Mercedes
focuses to operate its global action and functions in effective mode. It assists business
organisation to keep customer for a long period of time. The competent staff members helps in
increasing future sales of company for achieving competitive advantage within marketplace.
P3 Measure Porter's Five Forces model for assessing competitive analysis within market place.
This is important for business organisation to maintain effective strategies, plan and
policies for achieving competitive advantage over competitive firms. In assistance of this,
management team of Mercedes has assess the Porter's five force model. Hence, it offers strength
to the business organisation for boosting productivity as well as profitability level. This also
assists to realise the effective strategy that best suit to the competitive area of the company.
Mercedes is one of the most popular auto-mobile industry that provides superior quality car to its
user at global level. It includes different models like threat of substitutes, bargaining power of
supplier, threat of new entrants, bargaining power of customer as well as competitive rivalry
which is going to be discussed below:
Threat of new entrants: It involves new entrance within marketplace in order to analyse
competitive advantage. This is at low level because present brand cover highest share in the
market thus productivity of company does not meet the level of competition prevailing at the
marketplace. Furthermore, there are various laws which imposes difficulties for entrance of new
business in this industry. Mercedes take advantage of this to grow their business at international
level. In reference of Mercedes, the supervisory program focuses on providing innovative car to
its buyer for satisfying them. It assists in boosting future sales as well as profitability of the
business organisation. In assistance of this, the business organisation emphasised on increase
future growth as well as development of the business organisation.
Threat of Substitutes: In context of Auto mobile industry, due to presence of number of
companies which deal in similar products results in increasing threat of substitute products.
There are large number of companies that provides car at low price to its customer thus it
increases the competition level (Maniora, 2018). In discourse to Mercedes, the supervisor
maintain effective strategies, plan and policies for analysing the need and preferences of
consumer. They develop effective products for satisfying the requirements and wants of
consumer for gain competitive benefits over substitute products. The Mercedes emphasised on

providing unique products to its customer at affordable price. There are different type of
alternative available in the marketplace such as Lexus, Ferrari and Audi. Therefore, it creates
high competition in the marketplace. So, it is necessary for company to provide unique and
specific products to its customer that is different from other products for achieving competitive
benefits over competitive firm.
Bargaining power of customers: In auto-mobile sector, bargaining power of customer is
at high level. There are a lot of competitor prevailing at the marketplace so that buyer have a
power to switch the brand. In reference of Mercedes company, the manager emphasised on
supply best quality car to its customer at low-price for satisfy the need of customer. Due to
change in the need and preferences of customer it is important for company to build their
strategies, policies and procedure for boosting productivity and profitability of the business.
Therefore, the customer have a right to purchase the product according to their need and power.
Thus, it is necessary for company to provide superior car at low cost. Along with this, the
company focuses on building customer trust and loyalty for a long period of time.
Bargaining power of supplier: In this strategy, bargaining power of supplier is weak in
nature. There are a lot of supplier available in the marketplace for selling the superior quality car
to its customer. In discourse to Mercedes, the marketing manager of company focuses on
analysing the market as well as building effective policy and procedure to take decision
regarding the price of products. In addition to this, they are charge price according to the current
price prevailing in the marketplace because there are huge number of supplier sell their car at
reasonable price.
Competitive rivalry: The competitive rivalry in respect of auto-mobile sector is very
high. The main competitor of this company is BMW, Ferrari, Bentley and many more which
offer superior quality products at reasonable price to its user (Trevisan, 2016). Due to large
number of customer result in accelerating level of competition at the marketplace. Furthermore,
the companies follow economic pricing strategy to boost competition level in the market. Hence,
the manager of Mercedes company emphasised on building effective strategies, plan and
procedures for gaining competitive advantage over competitive firm. This company focuses on
offering specific quality products to its user for increasing productivity and profitability level.
The main motive of business organisation is to offer superior quality car to its user for
differentiate them from the competitors products.

From the above mentioned porter's five force model, the company emphasised on
providing superior quality car to its customer for gaining competitive reward over competitive
firm. Along with this, it assists in boosting future sales and profitability of the business
organisation.
P4 Different Strategic planning for the business organisation
Ansoff matrix is described as a strategic tool that helps business organisation to build
and design effective strategy for future success as well as growth of the company. It is adopted
by company to analyse the risk associated with the future profit in the business organisation. In
reference of Mercedes, the marketing manager of business organisation looks for opportunities
to earn more and more revenue in future time period. Moreover, it focuses on increasing
productivity as well as profitability in order increase future sales of the business organisation.
There are different types of strategies like market development , market penetration,
diversification and product development which is going to be discussed below:
Market penetration: This is a growth strategy which emphasised on offering existing
products in present market of the business organisation . This strategy will offer a strategic edge
to Mercedes as this company already have a trust and loyal base of buyer which are not willing to
sales substitute product by the business organisation. Market penetration enhancing its market
share at marketplace (Viardot, 2017) It determines the existing product available in the existing
market. The manager of Mercedes focuses on offering existing goods and services to its buyer
for increasing productivity and profitability of the company. In assistance of this, the company
make effective strategies for increasing the growth of the company. In 2017, this company sold-
out 2.3 million car around the country and still it enhances up to 9.9% sales of existing car.
Market development: In this policy, the company sale present products in the
innovative market. In discourse to Mercedes, the management team of company emphasised on
satisfying need and wants of customer by providing products in the new market. In addition to
this, they want to grab opportunity by attracting their customer for the product available in the
market. The business organisation want to investigate its business activities and functions into
the innovative marketplace. In order to increase sales, it is very important for company to attract
more and more customer for purchasing its product. Along with this, the business organisation
want to sales its existing product in the new and innovative market. They expand their market in
order to sell its existing product in the market.

Product development: Herein, the strategy of introducing innovative product in the
existing market is followed. The company provides unique and specific products to its customer.
In reference of Mercedes, the marketing manager focuses on providing a innovative car to its
consumer for satisfying them. The business organisation offer unique and specific product to its
customer for attracting them. Along with this, the supervisor of company offer unique and
innovative car to its use in order to differentiate them from those of competitor products. The
main purpose of company is to earn more and more revenue for future success and growth of the
company. In assistance to this, the business organisation offer superior quality car to its user in
order to achieve competitive benefits over rival firm.
Diversification: This company growth strategy focuses on provision of innovative
products in new market. This is determined as a risky strategy because there are a high
possibilities of product failure related to the implementation of diversification strategy within the
organisation premises. This is the costly strategy in order to introduce innovative product in the
new market. In reference of Mercedes, the marketing manager focuses on introduction of
innovative bicycle in the new market. This is a very risky strategy for this company because they
introduce new bicycle in the new market. In auto-mobile industry, there are different competitor
available in the marketplace( Zhu and Chertow, 2017). Beside from this, it is expensive as well
as risky strategy in order to introduce innovative product in the new market.
From the above mentioned strategy, it has been analysed that market penetration is
suitable growth strategy for achieving future success and development of company. Mercedes is
very popular for gaining trust as well as loyalty form customer. Therefore, it provides
opportunity to Mercedes for increasing its market share as well as income.
CONCLUSION
From the above mentioned topic it has been analysed that the strategy of market
penetration is validate for Mercedes thus it helps the company to quicken its future sales as well
as growth of business organisation. Moreover, it defines porter five force model which helps in
assessing how to achieve competitive advantage in the market. In addition to this Ansoff matrix
assess the present condition of market in order to develop the product in effective manner. Along
form this, VRIO and SWOT analyse micro environmental factor of the business organisation.
Furthermore, it offers different opportunities for satisfying the customer in appropriate manner.

REFERENCES
Books and Journals
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