Operations and Services in Mercedes-Benz: Strategies for Improvement

This report discusses the operations and services in Mercedes-Benz and explores strategies for improvement. It covers topics such as total quality management, just-in-time production, lean production, and training and development. The report also discusses operational strategies for BMW and Ferrari to gain a competitive advantage in the luxury car market.

Introduction to Operations
and Services

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Operations improvement strategy................................................................................................3
Operational strategies for BMW and Ferrari...............................................................................8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
Operations and services are two major aspects for an organisation, company or venture.
In this situation, top-level management within each company is responsible to always run its
different operations and services in a progressive manner. This is very necessary task for the
management of a company, because without progressive operations and services management
can’t achieve its decided objectives and aims on time. In this dynamic and modern world, there
are very high competition within each industry or sector. That’s why each and every company
should effectively operate and serve its different operations and services respectively. By doing
this thing, company can easily gain huge competitive advantage in its respective industry or
sector. This report discusses operation and service aspects of Mercedes-Benz. Currently this
company suffers from different organisational issues which has on quality, tie-up, etc. There are
some productive operation improvement strategies, tools and techniques also has been discussed
in this report which can support to Mercedes-Benz for improving its operations and services.
MAIN BODY
Operations improvement strategy
According to the current situation, top-level management of Mercedes-Benz is highly
required to adopt a productive operations management strategy (Lee and Schmidt, 2017). On the
other side, existing management of company need to employ some effective tools and techniques
in its business environment. By using these various techniques and tools a company can easily
improve or develop its different operations and services. There are major competitors of
Mercedes-Benz like; Audi, BMW, Ferrari and Land Rover etc. also has already adopted various
tools and techniques for systematically improving its different operations and services. This is
the main reason that, top-level management at Mercedes-Benz need to use various techniques
and tools for achieving huge competitive advantages in the luxury car market.
According to different automobile industry experts, market competition in the
international retail industry is increasing day by day. Many new entrants are coming in this
particular industry on daily basis. In this situation, other automobile companies will give very
tough competition to the Mercedes-Benz in the market. That’s why this company should start to

provide the best quality vehicles in the market for standing against high market competition.
There are some productive tools and techniques under operations management strategy which
can support to Mercedes-Benz for improving its quality of vehicles in the international
automobile industry.
TQM (Total Quality Management)
The management at Mercedes-Benz should implement the TQM (total quality
management) technique within its production processes for developing or producing quality
products and services (Aleksić, Grubić-Nešić and Aleksić, 2019). Currently many other
automobile companies also have successfully implemented this technique within its production
processes for providing the best quality vehicles in the market. This is the main reason that, top-
level management of company is highly required to implement TQM technique in its production
processes. If marketing team of this company cover market research, then it will find that most
people within Europe give very higher priority to those automobile companies which offers the
best quality in vehicles. Basically, a vehicle or car is that kind of asset which people purchase for
long time usage, in which Mercedes-Benz should understand this basic thing. Currently total
quality management is one of the best techniques for different businesses which can contribute in
development of product quality.
In this situation, existing management of the company need to take some productive decisions
for employing or implementing total quality management technique. TQM will definitely support
to the company for properly managing the excellent quality of its luxury cars. Mainly people
who comes from high income groups are afford cars of Mercedes-Benz. There are Mercedes
charges very high prices from different customers when they purchase cars from this company.
In this situation, top-level management of company is responsible to provide the best quality cars
with additional modern specifications to customers. On the other side, this luxury car company
generally uses the value-based pricing strategy for setting the specific price for its luxury
vehicles (Erat, 2017). Basically, most companies which uses value-based strategy are always
offers premium products in the market. In this situation, cars which has offered by the Mercedes-
Benz are also comes under premium category. This is the main reason that, this company also
should provide the best quality cars to its different customers.

There are top-level management of Mercedes-Benz need to give proper instructions to its
production manager for implementing TQM within its daily production processes. With the
support of TQM Mercedes-Benz will be able to solve problems which has based on car batteries,
alternators and brakes. Currently most companies within market are giving high priority to those
cars which has powerful batteries, because this kind of car batteries always helps in using
different features of a car for long time. Nowadays the Mercedes-Benz provides full digital cars
with modern electronic gadgets, tools and equipment. In this situation, production department of
company should use the well-manufactured electronic gadgets in its luxury cars for providing the
full satisfaction to different customers in the market. Total quality management technique of
operations management will support to Mercedes-Benz for properly managing quality of its
products and services. This technique will enable to the company for again achieving gain large
customer base in the luxury car market (Maylor and et.al., 2018). Many other luxury car
manufacturer companies are also working the market for the same purposes. That’s why
Mercedes-Benz need to put its huge efforts for attracting lots of new customers towards own
brand by providing the best quality luxury cars.
JIT (Just in Time)
There are JIT is another modern technique to properly improve different operations and
services of a company. Just in time technique mainly support to a company for reducing its
wastage and improving its productivity of production processes. This is the main reason that,
top-level management of company should highly consider this JIT (just in time) technique in its
production department. On the other side, production manager at Mercedes-Benz also need to
focus on properly implementing this technique within its workplace. When company use this
technique in its production processes, then it will be able to save its lots of precious time and
money. According to current situation of the company, its management need to only focus on
producing luxury cars with extra-ordinary quality. Currently major competitors of the Mercedes-
Benz, like; Audi, BMW, Land Rover, Ferrari and Volvo are highly focusing on achieving the
large market share in the luxury car market (Boscari and et.al., 2018). In this situation,
production team of the Mercedes-Benz is highly required to be too active in its job role for
producing such vehicles which enable to the Mercedes for standing strongly against its major
competitors.

According to different business reports and magazines, currently only those companies
are able to achieve loyal customer base which are able to achieve full trust in the market. In the
last few years, the Mercedes-Benz has lost its many loyal customer because of poor quality of
cars or vehicles. For example; many customers have returned approx. 1.3 million 2001 model
cars to the authorised dealers of Mercedes-Benz due to poor quality of cars and services. On the
time, the brand image of company also has decreased due to that incidence. That’s why from that
time to date, top-level management of this company is outing its great efforts for again achieving
great brand image in the market. In this situation, JIT technique will defiantly give its huge
contribution in increasing the brand value of the company. Currently many competitors of
company are taking advantages through just in time technique or tool of operations management
(Shollo and Galliers, 2016). Basically, JIT is a prime approach of operations management that
give opportunity to develop operations of company. In this situation, when Mercedes-Benz will
be able succeed in developing its operations, then it can easily serve the best services within the
luxury car market.
Generally, just in time technique says that, existing management of company always need
to prepare a specific schedule for ordering raw-material for boosting production processes. While
preparing schedule, the production manager should order only those products and services which
has highly required in the existing production processes. When production manager at Mercedes-
Benz do this same thing, then it will be able to save company’s lots of precious money and time.
Reason is, when production department of a company avoid to order unnecessary raw-material in
the production, then that department can indirectly promote wastage within the production
processes, in which wastage always increase expenses of a company.
There is wastage in production department always negatively affect a company’s financial
conditions and production processes (Shepherd and Patzelt, 2017). In this situation, upper
management of company need to give specially instructions to its production department to
reduce the wastage aspect. By taking this step, the management will eb able to run Mercedes-
Benz on the progressive path. On the other side, JIT technique will help to company for saving
lots of its precious resources within the production processes. This is very favourable deal to the
company, because as a luxury car manufacture the Mercedes-Benz will need to use lots of
expensive resources. In this situation, juts in time technique will help to this company for

systematically saving its expensive resources. At the end, the company will be able to provide
the best services also in the luxury car market.
Lean Production
There is lean production technique also give its great contribution in the improvement of
operations and services of the Mercedes-Benz. That’s why top-level management of this
company should consider this technique also production processes. Basically, lean production
technique is also known as lean manufacturing technique which supports in cutting out waste and
enhancing the quality. This technique of operations management also uses by many companies
for improving quality of products and services. That’s why company highly need to take lots of
advantages through lean production technique (Ivanov, Tsipoulanidis and Schönberger, 2017).
Currently many companies in the market are investing very large fund for more and more
developing quality of their products and services, in which employing lean production technique
within the production process is the best deal to the Mercedes-Benz. Reason is, if company
employ or implement lean production technique, then it will no need to invest huge fund for
improving quality of its vehicles or cars.
Mercedes-Benz is working in the luxury car market for the long time. From establishment
to date, upper management at this company always believes in offering excellent services in the
market. But in the last two decades, this company has faced many challenges in daily operations.
For example; the company has provided such cars in the market to different customers which
was having poor quality batteries and brakes etc. On that time, this luxury car manufacturing
company was received very reviews and feedbacks from different customers and people in the
market. This is the main reason that, existing management of company need to give order to its
production manager for using lean production technique also while producing premium and
luxury cars or vehicles. This technique will defiantly support to company for developing its
various operations and services (Williams and Caley, 2020). Currently well-developed
operations and services of a company are enough to gain large customer base within the market.
There are different businesses ready to put any effort for providing quality services, in which
Mercedes-Benz has highly required to take huge advantages through lean production technique.
Training and Development

The management of company need to provide some specific training and development
sessions. In these training and development sessions, top-level management of Mercedes-Benz is
responsible to invite some business experts who will teach company’s all managers, leaders and
employee about how to develop operations and services of company. When different people of
company will attend these training and development sessions, then these people will be fully
trained and developed for serving the best quality services in the market. This is the main reason
that company should focus on develop or improve people’s skills and abilities through various
training and development sessions. In these sessions, top-level management of company should
inform it’s all employees about actual value of quality control techniques (Lewis, 2019). It is
very necessary task to the company, because without informing, employees never gain proper
knowledge about different quality control techniques, and at the end employees will be not able
to use these techniques within the workplace.
According to the above factors, the Mercedes-Benz has great opportunity to again make a
loyal customer base within the luxury car market by providing the best quality cars or vehicles.
The company has lost its great brand image due to poor quality cars in recent two decades. In
this situation, these training and development sessions will positively influence to Mercedes-
Benz, because these enables to company for again achieving high reputation in the market. On
the other side, these training and development sessions helps in proper implementation of
different quality management techniques as well. That’s why top-level management of company
need to consider training and development aspects while taking various steps towards improving
the quality of operations and services.
Operational strategies for BMW and Ferrari
Currently there are various operational strategies available in the market which BMW
and Ferrari can implement in their respective business environment for gaining the large market
share than Mercedes-Benz with the luxury car market. Of course, currently Mercedes-Benz has
succeeded in holding the large market share within the luxury car market (Barratt, Kull and
Sodero, 2018). In this situation, top-level management in BMW and Mercedes-Benz are highly
required to implement some productive operational strategies for gaining market share form
Mercedes-Benz, in some major operational strategies has been discussed below;
Continual produce exclusive cars

This is one of the prime strategies for the BMW and Ferrari which can contribute in
gaining large market share within the luxury car market than Mercedes-Benz. Basically, this
operational strategy says, each company or business always focus on producing new exclusive
and different range of products and services, in which both companies Mercedes-Benz and
Ferrari highly need to implement this strategy within their respective business environment for
producing some exclusive range of luxury cars. Currently many people have dream in the market
for buying a luxury car one day. Basically, a luxury car owner has some different identity in the
society, in which most people give very high priority to luxury cars. In this situation, when
BMW and Ferrari launch their new exclusive range of cars in the market, then people will really
show their very high interest to but those cars. This thing will positively affect to both
companies’ market share aspect within the luxury car industry. That’s why existing management
within both companies should highly consider this operational strategy.
Boost marketing functions
Both luxury car manufacture companies need to boost their respective marketing
functions for gaining market share from Mercedes-Benz (Gutierrez-Gutierrez, Barrales-Molina
and Kaynak, 2018). Currently marketing is one of the prime functions for a company or business
which can provides very large market share in any company or business. According to this
operational strategy, both need to hire an effective marketing team which can boost their
marketing functions. Of course, BMW and Ferrari already have an effective marketing team, but
the marketing manager within both companies has highly required to be more active in their job
role. It is too necessary for the marketing manager in both companies, because without higher
effectiveness and activeness no company can achieve large market share from Mercedes-Benz.
For achieving higher market share from Mercedes-Benz, marketing team within both companies
need to be more extra-ordinary than Mercedes-Benz. In this dynamic and modern world, the
marketing team of companies should take great advantages through digital marketing tool.
Basically, these companies need to implement digital marketing tool within their respective
marketing functions. This step of marketing team will definitely boost both companies’
marketing functions. At the end, with the support of effective marketing functions both
companies will be able gain market share from Mercedes-Benz.
Improve expansion processes

BMW and Ferrari need to improve their expansion process also for gaining large market
share within the luxury car market from their major competitor Mercedes-Benz (Cytrynski and
et.al., 2018). Expand business operations in the new market segment is one of prime operational
strategies for both companies which can contribute in gaining large market share within the
luxury car market. For systematically expanding own business operations in new market
segments, marketing team of both companies should search new appropriate market for
expanding their business operations. Basically, well-developed countries are the best market
place for these all companies, because people can’t afford their luxury cars in un-developed
countries. In this situation, currently fast developing countries most appropriate market place for
both companies BMW and Ferrari.
Top-level management within both companies should expand their business operations
within the developing companies, because many people within these countries are now becoming
able to afford luxury or premium cars. This is one of the best operational strategies which can
contribute in achieving large market share from Mercedes-Benz. There are both companies
should be aware about this that, the management of Mercedes-Benz also focuses on expanding
its business operations in the new appropriate market segment. In this situation, both companies
need to enter that market segment where Mercedes-Benz still not has started its business
operations (Choi, Cheng and Zhao, 2016). By considering these all factors, there are BMW and
Ferrari will be a easily gain large market share from the Mercedes-Benz.
CONCLUSION
It can be concluded that there are various appropriate techniques, ways or methods
available which top-level management of company should use for developing its operations and
services. In the last two decades, this company has faced high criticism in the luxury car market
due to poor quality of cars in the market. But now this company has great opportunity to again
establish its great empire in the luxury car market. Existing management of company can easily
gain high brand image in the market by using various tools and techniques in its daily operations.
On the other side, there are BMW and Ferrari able to gain large market share from Mercedes-
Benz. Top-level management within both companies are highly required to use mentioned
operational strategies for gaining large market share from Mercedes-Benz.

REFERENCES
Books & Journals
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