International Business Environment-Assignment

International Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
MODELS.........................................................................................................................................2
7 Ps of marketing mix used by Mercedes...................................................................................2
SWOT analysis: ..............................................................................................................................5
Ans-off Matrix ................................................................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
International Business Environment is that platform where international businesses
communicate and operate with each other so that trade can be promoted and commercial
transaction between two region can take place accordingly. It helps the business to explore and
grow worldwide as well as helps in growth of GDP of the nation. It also helps an organization to
make realistic plan and ensure effective implementation in an organization. Mercedes and Audi
are top brands of car across the globe. Mercedes is German auto-mobile marque in Stuttgart,
Baden Wurttemberg. It was founded by Karl Benz. Whereas, Audi is a German auto-mobile
manufacturer that design, markets, producers, distributes and engineers. Its headquarter is in
Ingolstadt, Germany. It was founded by August Horch in the year 1910, around 109 years ago.
This report includes relevant theories like, 7ps of marketing mix, SWOT analysis etc. which
helps in comparison between both the top branded cars. As well deep analysis is done of both the
cars regarding their technologies, product, innovative product, marketing strategies used,
targeted customers etc. so that distinguished factors among them can be studies easily in the
market place (Beamish and Lupton, 2016).
Overview about Mercedes.
Mercedes- Benz is a German global auto mobile marque. It is well known across the
world foe it's luxury buses, coaches and trucks. Companies headquarter is in Stuttgart, Baden
Wurttemberg. Organization was founded by Karl Benz around 109 years ago. Its subsidiaries are,
EvoBus, MBDI, Mercedes AMG, smart Mercedes AMG petronasF1 Team. Mercedes- Benz has
18 models on sale in India. Firm sold 40,340 units in India and was able to capture 40% market
share in marketplace. In developing country like India luxury car segments is raising it's selling
units by 1.4% in the competitive world. BCG matrix is used by top brand Mercedes which helps
the firm in becoming leader leader in the market (About Mercedes, 2018). Business associates
uses various multichannel approaches as their distribution strategy so that customers needs can
be meet on time. Mercedes has joined hands with many companies like, Nissan, Formula -one,
Baidu and many more all this directly helps to create brand recognition in the eyes of the
customers in the cut throat competitive world.
Overview about Audi.
Audi AG is a German auto-mobile manufacturer that markets, engineers, producers,
designs etc. It is a member of the Volkswagen group. It was founded by Historic Zwickau in the
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year 1910. It has spread it's outlets in 9 countries and 91, 674 employees are working across the
globe to meet the emerging needs of the customers. Organization is adopting 4ps of marketing
and STP (segmentation, Targeting and Positioning) as their marketing tools so that customers
needs preferences can be achieved. Audi is well known for delivering products which are of high
quality, technicalities and design across the globe (About Audi. 2018). Germany is holding
8.42% the highest market share in Audi as well as in Japan the market share is 0.696% and in
USA it capture 2.69% of market share in Audi. In the cut throat competitive world Q5 and A6
Sedan are the most popular models in the market (Brannen and Tietze, 2017). Due to the raising
demand of Luxury cars in Asian markets there lifestyle is changing at a rapid scale and luxury
segment raised by 33% in the developing nation like India. The potential customers are
customers whose age group is between 30- 50 years.
MODELS
7 Ps of marketing mix used by Mercedes.
Marketing Mix is a set of tools used by organization in order to pursue it's marketing
goals in the cut throat competitive world. It helps in creating right marketing strategy and guide
in implementing it effectively with appropriate tactics so that firms strategy can be tough
competition for others.Here, Mercedes and Audi both top brands are using 7ps of marketing for
promoting their luxury car.
According to Martin, 2014, Over the years marketing mix has become a complex in
nature due to the emerging competition in the market. The traditional form of marketing tools
has been extended and redefined in the marketplace with the phase of time. The new extended
models of marketing mix are explained as follows:
Product: Product refers to an tangible or intangible thing which can be physically
touched and felt by customers while purchasing it from the market. It includes all the features,
benefits and advantages so that consumers can easily convinced to purchase the goods. Mercedes
is dealing in luxury cars across the globe. Its product are, Mercedes AMG, Mercedes Benz
Trucks, Bharat Benz Buses, Mercedes Benz coaches etc. They design the product by examining
the customers needs and demands. This raises sales volume to a large extent in cut throat
competitive world. Coming up with goods which are satisfying the emerging needs wants of the
customers helps to maximize huge profit as compare to competitors.
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Pricing: The pricing policy used by the Mercedes is high as it deals in luxury cars. The
pricing pattern used by them helps to come with innovative products every time. When the
emerging needs of the customers are meet on time then positive image for the brand is created
and sales volume increases accordingly (Buckley, 2017). In raising the customer base of the
product pricing policy plays a vital role in it. It directly or indirectly helps to raise market share
in the competitive world. The prices of the designed good is reasonable so that large section of
the customers can purchase car. The fluctuation in cost takes place by when the demand for the
good is raised. By this set goals and objectives are attained in intense competitive world.
Place: Place plays a significant role as it helps to raise the sales volume in the market.
When the product is easily available in the market and customers can easily purchase it then
positive image is created in the eyes of the customers. Mercedes sold there product in the market
which is conveniently available to the customers due to which brand recognition in positive way
has been created. It directly raise their market share and as well as profitability ratio
accordingly. Along with this client can book their product online and can comment on the goods
after use. When companies goods are easily available in the market it raises sales volume that
directly raises revenue generation ratio. Client prefer those goods which are easily accessible to
the consumers in the the stores.
Promotion: Profitability ratio increases when organization uses right promotional
activities in correct way in order to sell their product in the market. Here, Mercedes uses 7ps of
marketing tools in order to pull potential customers for luxury car. The activities helps the
business associates to attract customers across the boundaries in order to raise customer base of
the car. Administration is using digital marketing tools so as to promote their luxury car to
potential customers. The sales volume of the car totally depends upon the how promotion of
product is done in the market.
People: People are the most essential element in the 7ps of marketing as without people
goods can not be sold and profits can not be maximized accordingly. When the Mercedes luxury
car is delivered and consumers taste it in terms of mileage, 3D lights, body structure, music
system and so on then product success and failure can be examined respectively. If people is
satisfied with the luxury car features and innovative product then a positive image is created in
the eyes of the customers whereas, if the needs are not up to the mark then negative image is
created in the eyes of the customers. In order to sell out the luxury car it is very important to
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create demand for the car in the open market place. By doing so client will be assured to
purchase the car in order to meet up their emerging need.
Process: To be successful in the cut throat competitive world process activity need to be
clearly defined to it's workers so that effectively and efficiently employees can work in order to
meet the goals. Mercedes for its customers define areas where consumers preferences can be
accommodated in order to provide unique experience. Which will raise their trust for the brand
and loyal customers is created for longer time duration (Deresky, 2017). The sales volume
decide the how much production should be done of luxury car. The process fluctuate according
to the demand of the customers. More the demand rapidly is raising the process activity.
Physical evidence: Physical evidence means product can be physical touched and felt by
customers before purchasing it form the market. Customer base is raised when the level of
comfort and service location is attractive then customers are pulled towards the luxury car like
Mercedes. A pleasant environment and thoughtful comfort measures a sense of security to new
customers which will indirectly raise sales and profitability ratio (Marketing channels used by
Audi, 2018). Before finally delivering the product to the customers car ride is allowed free of
cost so that physically car be felt and be assured that is well good to purchase it.
7ps of marketing for Audi
Product: The product of Audi comes with lovely car with outstanding power in it.
Organization comes with wide variety of premium cars like, Sports, SUV, Sedan etc. for it's
potential customers in the market. The innovative product is A8 which is bench mark in the
market for it's competitors. It has indirectly raised the profitability ratio as well as sales volume
raised in the market. By taking the feedbacks from the client and according car is designed so
that they can purchase it as well as meet up their acceptation level. It aid in generating huge
revenue as compare to rivalry.
Pricing: The pricing used by Audi is to cash their brand image in the cut throat
competitive market. The policy of pricing is based on the premium car manufacturer for
competition. Though the prices of Audi is high but still it can pull customers for the car as it has
financial option for potential customers which raised their sales volume. Business associates uses
optional pricing strategies for optional features in the car for loyal and trustworthy customers.
The prices of Audi A1 is in UK is 14,000 GBP which directly means firm is using skimming
premium policy in the cut throat competitive world. As it is luxury car designed for high class
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people. Prices does not matter to them they mainly focus on quality and uniqueness the product.
If it gets satisfied with their exceptional level they are ready to pay set prices.
Place: Audi is serving its luxury car across the nation and has it's production plants in 9
locations worldwide. The placer used by the business associates to promote their car is Asian
market which is the main market for Audi. Here, firm uses modern technology to attain
consumers satisfaction in the competitive world. As it manufacture plant is in 9 location across
the globe it uses excursive dealer network and after sales services to create positive image of the
brand for longer time duration. It also uses channels between producer and distributor,
wholesaler and dealer. Due to which car is easily available to the people on demand without any
inconvenience. This car is available to the customers in their stores which are located in local
city or local area. This helps to raise more and more customer base for the car in open market
place.
Promotion: In order to promote their Audi luxury car business associates invites top
celebrities to promote the car on TV, Radio, Internet, Print media etc. In order to raise their
product sales in the competitive world it does not believe in mass market. However, its
promotional activity is that it send message to the potential customers that Audi is driven by high
profile people (Hooper,2016). By doing effective promotion best results can be attained and
targeted customers can be pulled towards the car.
Physical evidence: Customers uses the Audi car for trial then only actual feedback can
be measured by the company to improve future in the coming years. When customers are
satisfied with the advanced technology and mileage etc. then they come up again to meet their
desire needs and if at any point they feel that cost is high as per the facilities they then they
switch to some other brand easily. Which is negative sign for the company. Taste ride is allowed
to the customers with no kilometre limitation before before purchasing the car. By this goodwill
is created in the eyes of the customers and more loyal clients are build over the years.
Process: Audi process activity is clearly defined to the workers and work day and night
to meet the set objectives. They are gradually expanding their process so that customers does not
face any trouble to resolve their queries regarding car. They continue the process of making car
on demand of the customers. As per the client demand they raise their production process to full-
fill the customers needs and wants.
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People: The end user of Audi decides the success rate if the car in the market. People
satisfaction level decides the up coming preferences in the market. Car are designed for the
people so it's very important to pull customers towards Audi so that business can sustain in the
market.
SWOT analysis:
According to Hitesh Bhasin, 2018, SWOT (strengths, weaknesses, opportunity and
threat) analysis is done so that Mercedes can figure out their strengths and weaknesses so that in
the coming years it can be improved and growth and development can be done accordingly.
Whereas, opportunity and threat is examined in the market so that loop holes of other can be
converted as their opportunities so as to set standards for other competitors in the market.
However, SWOT analysis is carried out by Mercedes and Audi.
SWOT analysis for Mercedes
Strengths: Every business has it strengths which is indirectly helping the firm to gain
profits in the market. The biggest strengths of Mercedes is that its manufacturing facilitate are
across the world due to which consumers needs can be fulfilled accordingly. They are also
focusing more on innovative product. It is more working on the safety features of the car which
is helping to increase goodwill in the market ( Hutzschenreuter and Lange, 2016).
Weaknesses: Audi weak point is that the after sale service is very expensive for
customers due to which people switch to some other car brands. Business associates are also
facing distribution stunted due to which supply chain of the car due to which customers needs
are not satisfied and indirectly brand equity is also affected at a large scale (SWOT analysis of
Mercedes, 2018). Management frame tactics to over the loop holes so that more productive
results can be attained. In order to survive for longer time period company is working on it's
weak areas.
Opportunities: The emerging opportunity for Mercedes is the Asian market because of
changing lifestyle, raising disposable income etc. It has examined that customers are demanding
more of premium vehicles like, BMW, Audi, VOLVO etc. so it is great opportunity for the brand
to expand their business in developing countries like, India, Asian countries etc. Organization is
framing long term goals to capture upcoming opportunities prevailing in the market. By doing so
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large section of the market can be captured easily and business can raise customer base for the
product.
Threats: Audi is facing the biggest threat of sluggish economy due to which economic
indicator like, unemployment, recession etc. will daunt auto-mobile industry in the coming
years. Governing bodies rules and regulation like, restricting the entry of outside vehicles,
decreasing road permit validity,etc. are imposed due to raise in global warming. Government is
asking to use less personal transport for work which is alarming threat for Mercedes (Kolk,
2016). To overcome the threats prevailing in the market strong tactics are framed so that
business function can be be hampered. Top level management keep eye on the threats occurring
in the global market so that overall productivity and profitability ratio does not get recresed.
SWOT analysis for Audi.
According to Vinod Nair, 2018, SWOT (Strengths, weaknesses, opportunities and threat)
analysis is done by Audi so that market scenario can be better analysed in the competitive world.
Strengths: The main strengths of Audi is that it is rich in histrocial heritage as well as
strong engineering and designing team is there which continuously work on innovation in Audi
model. Firm is able to generate huge profits because of its effective marketing and branding
image in the cut throat competitive world (SWOT analysis of Audi, 2018). Administration is
turning their strength for growth and development of the business in intense competitive world.
It aid organization in gaining huge profit as compare to rivalry.
Weaknesses: Audi weak point in the market place is that it does lesser market
penetration in order to capture huge market ratio. As well as Audi is limited to product portfolio
is does not work in various segments which can create trouble in the coming years as
competition is increasing day by day. Tactics are framed to deal with weak point in order to raise
overall workforce efficiency of the customers. It is very important to work on the loop holes so
that skilled employees can be retained for longer time duration.
Opportunities: In the coming years Audi has a great opportunities to expand their
business in the market. As it is coming up with low cost car every section of the people can
purchase it and sales volume can be raised accordingly. Business associates are ,ore focusing on
stylish look both by interior and exterior aesthetics so that customer base can be raised. They
conduct research and development activities on regular basis so that opportunities prevailing in
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the market can be captured on priority level. By this more customer base can be raised for the
product.
Threats: The raising fuel cost and features at a lesser price are the biggest threats for
Audi. So organization needs to search out certain ways to overcome this threats in order to
sustain in the competitive world. Management keep eye on the up-coming threats prevailing in
the market and accordingly design strategies to overcome them. It is very essential to study
threats in order to create tough bench mark for others.
Ans-off Matrix
According to Hitesh Bhasin, 2018, Ans off Matrix is a described as a corporate growth
strategies. This is used by Mercedes so that growth and development can be done in the market.
It is discussed as follows:
Market penetration: Mercedes desire to achieve growth in the existing product in the
modern market segment as well as willing to raise market share at a large scale. In competitive
world maintaining market share will directly results to growth and development in the cut throat
competitive world. Moreover, market penetration has limit in the market but once the market
approaches saturation then Mercedes should pursued another so that it can continue to grow.
Market development: Mercedes can grow in the market by targeting it's potential
customers. It involve pursuit of additional market segments or geographical region so that
innovate product can capture market ratio. Effective marketing strategy helps to capture huge
market ratio which is a positive sign or the product as well as for the company (Kourula and
Kolk, 201)).
Product development: To be successful in the market product development is
mandatory so that further improvements can be done in the product. Mercedes come up with
innovate design pattern in cars so that customers needs can be achieved in the given time
duration. In this case normally innovative product is developed so that business can sustain in the
cut throat competitive market place.
Diversification: In this case Mercedes try to enter into new market like Asian market so
that market ratio can be captured and profits can be gained accordingly. It will help the firm to
grab huge opportunities in the market as it is the first to enter with new innovative product in car
segment.
Ansoff Matrix for Audi
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Market penetration: Audi desire to growth in the current product in the market so that
market share value increases . However, in agonistic world maintaining goodwill will directly
results to growth and development in the competitive world. However, this has boundary in the
market but once the market approaches saturation then Audi should choose another strategy so
that it can continue to grow in the market. .
Market development: Audi can flourish in the competitive market place by targeting
it's customers. Market development consists of pursuit of additional geographical region so that
innovate product can capture market ratio. In organization effective marketing strategy assist to
capture market ratio which is directly positive sign or the product as well as for the company
(Kourula and Kolk, 2017).
Product development: Product development is mandatory so that further modification
can be done in car. Audi is entering with innovate pattern in cars so that emerging needs of the
customers needs can be achieved . However, innovative product is formulated so that business
can continue in the competitive market place.
Diversification: Here Audi attempt to get into into new market like Asian market in
order to capture market ratio and to generate profits accordingly. This will aid the business
associates to catch huge prevailing opportunities in the competitive market place because it is
the first to move into the market with innovative product in car portion.
CONCLUSION
From the above it can be concluded that if firm uses various types of models like, Ans-off
matrix, 7ps of marketing and SWOT analysis then comparison can be done easily between two
companies. SWOT analysis helps the organization to search out their strengths, weaknesses,
opportunity and threats so that improvements can be done and profitability ratio can be raised
accordingly. Ans-off helps to make out market penetration. Product development, market
development etc. so that organization makes effective strategies according to the market scenario
and can raise customer base in the competitive world.
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REFERENCES
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Deresky, H., 2017. International management: Managing across borders and cultures. Pearson
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Hooper, M. J., 2016. The global business handbook: The eight dimensions of international
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Hutzschenreuter, T., Kleindienst, I. and Lange, S., 2016. The concept of distance in international
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Kolk, A., 2016. The social responsibility of international business: From ethics and the
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Kourula, A., Pisani, N. and Kolk, A., 2017. Corporate sustainability and inclusive development:
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Noe, R. A. and et. al., 2017. Human resource management: Gaining a competitive advantage.
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