Strategies for Gaining Market Share in Luxury Automotive Industry

Business Operations and
Services

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
Introduction to companywide operations improvement Strategy................................................3
Operational strategies for gaining market share..........................................................................7
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business operations indicates to the activities in the business which are mainly run for
achieve business objectives. Management of the business are operate these all activities in the
business environment and try to gain productive response from their efforts. All activities are
cover by the top-level management of business, management provides specific guidelines to all
lower level management employees. All employees are responsible for their respective work.
Business operation includes planing, organizing, controlling, selecting, implementations etc. All
operations of the business are not only one time process, business management needs to maintain
all activities in a continuing form and once it gets the final result then again start all operation
process with more improvement and efficiency.
This report is based on the case of luxury German car maker brand Mercedes-Benz. This
brand is known for its luxury cars production in the world. Mercedes-Benz already gain a high
reputation in the multinational market by providing highly modern and unique cars to the
customers. Mercedes-Benz has high reputation but in the year 2004, company's operating profits
fell on the back of poor sales of the luxury brand and restructuring costs at its smart car
divisions. Company also facing quality control problems on many of its vehicles. In that case
many of their previous customers have been moving to competitors like Audi and BMW.
Mercedes-Benz also faced some other problems in the customers cars in year 2005. That time
Mercedes-Benz loss their high goodwill in the market, because customers are not satisfied from
their products. Then company make many changes in their business environment to recover that
goodwill again. In this report we are also discussed operations improvement strategy and the
operational strategies that Audi and BMW can implement to gain market share from Mercedes-
Benz.
Introduction to companywide operations improvement Strategy
The module discusses about fall of Luxury car making company of Germany, Mercedes
Benz. This company fell of due to quality control issues in the car models and distraction of
management over DiamlarChrysler which took their eyes off from Mercedes Benz. For
introducing operational improvement there are various factors that must be considered as many
times while focusing on big issues and concerns small issues remain unsolved which can later
disturb performance. For this small issues should be timely resolved and should be given equal
importance though less time and efforts required for them. Other factors to consider are

motivation and morale of the employees and line managers. Often during crisis motivation of
employees and line managers start to fell off, management should ensure that they remain
motivated as they are a important factor to bring organisation back on track. Timely detection of
problems and measurement of performance also plays a critical role in success of business. So
performance of employees in all aspect should be timely measured like Mercedes Benz quality
kept falling but they did nothing on time which later came as loss and embarrassment to
company and problems that cause quality and operational inefficiency should be detected timely
this is possible through effective monitoring of the operations. For improvement of operations
there are various tools and techniques that can be applied in the company, some of them that can
improve Mercedes Benz's operations are as follows-
Total Quality Management- TQM is an system or a techniques for improving
operations of whole organisation. This system focuses on improving process and operations at
every level of the organisation. This includes goods and services, material for their
manufacturing, tools required for their manufacturing and any other process involved in
organisation from manufacturing to final output. Standards for quality are decided and then while
in process are measured with these standards to assure quality. Total Quality Management is a
customer focused approach as finally customers decide whether the efforts of the company are
successful or not. All the employees of a workplace are involved in this approach. Systematic
evaluation is done in TQM (Lapiņa and Aramina, 2015.). One after other step of the process which
is quality check of material, measuring quality of process, checking quality of output and at last
packaging of the product are measured and evaluated. Continuous improvement in process and
commitment to quality are main principle of TQM. Quality being the main reason behind fall of
Mercedes Benz, company must adopt this technique it will help in prevention of potential
drawback regarding quality.
Product Design- A problem solving approach that includes identifying market of new
product and then recognising problem or customer needs, developing a new solution for the
problem and then proving the product with market. This concept is generally used while making
new product. This approach focuses on end to end development of product. The questions to be
answered in this includes identifying the problem then who are affected by the problem and how
are we going to solve this problem. For this developer needs to empathise with those having
problem. Explain the problem then brainstorming for having creative ideas to solve the problem