Mercedes-Benz Innovation Management Strategies

The provided assignment is an analysis of Mercedes-Benz's innovation management strategies. It highlights the importance of digitalization, artificial intelligence, and industrial automation in driving business development. The text discusses how machine learning and AI can disrupt car companies, making consumer management and manufacturing easier. Industrial automation and digital twins are also mentioned as creating efficient machinery and reducing costly prototypes. Furthermore, the assignment references books and journals that discuss sustainable circular business model innovation, leading and managing innovation, knowledge-based theories of the firm, managing innovation networks, and different approaches to managing innovation activities.

Managing
Innovation

EXECUTIVE SUMMARY
Innovation is crucial part of an organisation and their new imperative management. Each
and every organisation, whether large or small organisation such as Apple, Netflix, Mercedes-
Benz, Google etc. require to modify, invent or innovate their strategies, function, framework,
services and process within a certain span of time in regard of carrying out new modification
within business and markets. Some experts explained the system as “innovate or die” which also
inspire and actions principles within the organisation. Innovation, often, termed as conflated with
the strategies which is substantiated logic and coherent for undertaking distinct choices that
deliver novels to essential issues resolution. Innovation administration can be defined as the
combination of the innovation and management procedure as well as change management. In
regard of this engineer and manager allow to cooperate with numerous consideration of goals
and processes.
In the present advanced era of auto-mobile industry, even the business demands has
increased among clients and service user. Consumer demands for automate safety, quality, utility
and reliability at the same time. Cars are transforming themselves in more digitalised and
modified along with eco-friendly techniques to meet the incredible journey. The examples of
innovation can closely examine as modification in system were made and numerous inventions
are done in the market. The world has led to high technologies in the military vehicles, tractors,
Jeep, Land Rover to luxury sport etc. The system of cars has become eco-friendly and low
emission services and products that are referring numerous advancement in the whole segment.
Company which is undertaken in project is Mercedes-Benz which is an intern atonal and
leading auto-mobile organisation also called as Daimler AG. The company is known for
producing wide range of services and products such as coaches, lorries, business and luxury
vehicles etc. The headquarters of company is in Stuttgary, Baden-Wurttemberg. Initially the
names was first patent in 1926 under the name of Daimler-Benz by Karl Benz. This is also
reward by first gasoline-powered and petrol automotive organisation. Leading through
innovation, organisation has made meticulous engineering changes and inventions within the
segment since 1886 and is reinventing their procedures and activities. The report is developed by
analysing numerous backgrounds of automate industry as well as organisation understanding
numerous extrinsic environments and strategic capabilities of enterprise. Report is focusing over
the existing and future technologies that is explaining the management and leading of innovation.

Table of Contents
EXECUTIVE SUMMARY ............................................................................................................2
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Organisation and industry overview with innovations................................................................1
Organisation existing innovation and performance capability....................................................3
Industry in future.........................................................................................................................6
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Innovation can be mentioned to as creation of something new in the market. It can be
considered to be an activity through which an organisation changes itself and its environment.
This assignment focuses on the innovation practices which are being carried out by Mercedes-
Benz. This auto mobile manufacturer is a division of Diamler AG which is known to deliver
luxury vehicles throughout the world (Leading through innovation, 2018). This assignment will
make attempt previous and future innovation to articulate to set the future innovations and
growth of business. Entire these business aspects in this assignment that require to maintain
through organisation for generating suitable opportunities or options.
TASK 1
Organisation and industry overview with innovations
INDUSTRY OVERVIEW
History of automate industry lies decade back to 80th century. The first auto-mobile was
initially invented and structured in France and Germany in 1800s. Henry Ford is considered as
the pioneer of mass production innovation and techniques that catered the company in whole
“Big Three” along with General Motors and Chrysler , Ford by 1920s. Where, nowadays, the
segment in each nation faces wide range of altering components certain to their individual
conditions including main pronounced developed markets like India, Brazil, Argentina, Russia
etc. Hence, industry has modified their innovation in cars from steam engine to auto-functioning
digitalised hybrid cars.
COMPANY BACKGROUND
Mercedes Benz is one of largest and most celebrated company among luxury automate
brand across the world. It is now operated by Daimler-Benz and is headquarter in Stuttgart,
Germany. Origin of company traces back to 1886, when Carl Benz made Benz Patent-
Motorwagen as pioneer of Gasoline powered automate to Daimler-Motoren-Gesellschaft's 1901
as Mercedes (Antikainen and Valkokari, 2016). Company manage their equity with their
message “the best or nothing” from “a replacement for the horse”. In 1901, the company first
marketed their products and initial brand brand name was given in 1926. Here are discussed
major innovations of organisation evolved with generation:
 1886 Mercedes-Benz Benz Patent-Motorwagen
 1928-1932 Mercedes-Benz SSK
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 1954-1963 Mercedes-Benz 300 SL
 1964 Mercedes-Benz 600 Pullman
 1990 Mercedes-Benz 190E 2.5-16 Evolution II
 1991 Mercedes-Benz C111
 1991-1994 Mercedes-Benz 500E
 1998-1999 Mercedes-Benz CLK GTR
 2009 Mercedes-Benz SLR McLaren Stirling Moss 2008-2011 Mercedes-Benz SL 65 AMG Black Series
4P'S OF INNOVATION
To explore possible advancement in the auto-mobile structure by Mercedes-Benz, 4P's
models is one of suitable techniques that can assist in managing innovation and highlighting
major changes within company. Product Innovation: From the first petrol car, the organisation has developed hybrid cars
with PRE_SAFE anticipatory occupant safety system and DISTRONIC PLUS adaptive
control framework with Magic Body Control framework within their products. Process Innovation: Company has recently formed their fourth Lab1886 incubator
internationally as first innovation centre to provide ideas and technological knowledge
(Archibald and Archibald, 2016). With co-creation techniques and MBUSA assistance,m
recruitment is being done in company including concept of inclusion and diversity within
workplace,. Paradigm Innovation: For professional fleet administration, company use Mercedes
PRO connect with cutting-edge telematics cure, advanced quality and electric mobility
(eVito & eSprinter). Also, Mercedes is using advanced media tools and campaign
management for promoting their services. Position Innovation: e-drives and adaptability has created new positioning as company is
pursuing commercial fleet electrifying. Digital technologies are more accident-free and
emission-free with green driving system i.e. created pleasing and satisfactory recognition
of brand among people.
PESTLE Analysis
Hence, in regard of considering major components, this is fundamental for business
innovation, PESTLE analysis of Mercedes-Benz discussed here:
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Political Factor
 Government favouring low emission vehicles.
 State policies are affecting growth. Innovation in governmental process due to technical advancement.
Social Factor
 People's preferences and higher demand of SUV. Popularity of company's products and higher innovations.
Technological Factor:
 Low emission and environmental friendly auto-mobiles. Hybrid and auto-navigation car system.
Economical Factor:
 Demand of luxury vehicles negatively affected due to crisis. Market development increase purchasing power and higher revenues due to its offered
technologies.
Legal Factor:
 Strict emission laws regulated by state. Follows safety structure, and environmental laws at global market. s
Environmental Factor:
 Green Driving system and emission-free cars.
 Focus over pollution control.
Hence, due to its rapid technological advancement and innovation in products, the
company faces numerous positive influence in market.
Organisation existing innovation and performance capability
Entire auto-mobile industry and associated companies consider and set through
company's management which aims over the goals attainment and efficient operations
functioning (Archibald, 2017). Mercedes-Benz is the pioneer in car manufactures that include
digital transformation and networked mobility in services to clients. In order to understand the
performance capabilities, Mercedes-Benz Company need to understand their existing innovation
in the present era i.e. improvising their abilities and their recognition in global market. Here are
discussed major recent innovation in present market:
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 Auto-mobile Change Inventor: Company led to globalisation and digitalisation
introducing the term “Industry 4.0” also considered as the pioneer of development. It has
present the Intelligent Aerodynamic Automate Concept (Concept IAA) fascinating
opportunities of development. More Precision, Speed and Diversity: Digital prototyping acceleration is constantly
made in Mercedes-Benz since 1970 to present era which modified 80million elements ad
still rising (Chen, Jiao and Zhao, 2016). Numerous technologies are added such as Traffic
Jam Assist, Distronic Plus Active Cruise Control, Magic Body Control, Also, for efficient
control, Ingenious aerodynamics is assisting for efficient production of Mercedes-Benz
creating comfortable and flexible digitalisation within company.
 More Interaction and Personalised Brand: Online stores, digitalised marketing and sales
are creating interactive framework to connect with their people. Company is including
digital element design in products including Plasma screens, multi-touch monitors, Cam-
Touch-Pad HMI etc. to form connectivity. They have also appointed Online portal for
consumer services and individual networking individually along with Car2go lifestyle
app to brand their firm globally.
Hence, through understanding latest activities of innovation, company can assess their
innovation capabilities which can be identified through SWOT analysis that influence their
strategic development. Beneath, SWOT analysis of Mercedes-Benz is discussed:
SWOT ANALYSIS OF MERCEDES-BENZ
Strengths Weakness
 Strong brand presence and global
leader.
 Assembles and production in
approximate 20 nations.
 Pioneer of marketing and promotion
through online ad, TV and print ads etc.
 Innovation leader and is liable for
intrinsic air bags and combustion
engine etc.
 Intense market competition i.e. limited
share growth of market for Mercedes.
 Being a global company, proportion is
affecting brand image from minor
issues.
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Opportunities Threats
 Enter to emerging markets or
economies.
 Strong brand presence leveraging
consumer.
 Company can aims over fuel efficient
and hybrid cars.
 Increasing fuel costs.
 Intense automate brand competition.
 State policies are leading to business
loss.
On the grounds of this, this can be state that dynamic and strategic capabilities outlines
through Mercedes-Benz position themselves above their rivals (de Zubielqui, Jones and
Statsenko, 2016). The innovation, technical knowledge and quality assurance make their
engineering more qualified and better. Their cars are classified through trademarked safety and
branding features making their imitate impossible. In regard to consider this, numerous resources
needed to evaluate which is discussed as below:
RESOURCES
Mercedes-Benz include innovation within their resources functioning and management as
well that keep modifying with the period of time. Physical Resources: Organisation has highly qualified and technological production
machinery with more than their production infrastructure in more than 20 countries as
well as expanded in globally (Prokop and Stejskal, 2017). Also, they provide e-stores that
is also assisting in individual branding. Financial Resources: Company has wide financing and leasing range to their consumer
and functioning their operations. Company has €217.2billion revenues overall with 35%
current liabilities. Company invest approximate €20billion in R&D division to gather
information and new innovation requirement. Human Resources: Company prefer inclusion and workplace diversity concept to deliver
better creative ideas of innovation. Company has most qualified and skilled worker
allotting sophisticated system and better wage according to their skills.
 Intellectual Capital: Mercedes has unique identity which is first petrol and gasoline cars
patent its invention. Now, organisation has trademarked and copyrights over their
innovation of emission free and digitalisation system of their products.
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Therefore, on the grounds of this, strategic capabilities can be determined of Mercedes-
Benz which depicts the innovation and its management within the working environment within
the company.
STRATEGIC CAPABILITIES
It can be referred as the ability of business that organise competitive strategies which
allow them to increase and survive with value over time. Through employing VRIN framework,
management and identification of strategic capabilities can be done which are discussed here:
VRIO Framework: This is an intrinsic analysis tool in business management context
which manage their value and capabilities on the grounds of these four elements: Valuable: Company created their values through efficient dynamic. Technological
advancement and strong brand portfolio etc. which is creating distinct value. Inimitable: Their emission-free and green technologies along with advancement is
unique and diverse from other companies. Rare: Their framework and technologies are rare that is creating distinct recognition
within the industry.
 Organised to Exploit: Mercedes-Benz is structured, advanced and viable to exploit their
capabilities and resources.
Hence, this can has better performance and inimitable resources and organisation
capabilities that is earned through managing and adopting suitable innovation methods
accordingly.
Industry in future
After analysing numerous innovation aspects and managing innovation, different
possibilities can be measure and executed in the organisation each and every day to retain as
leading organisation globally (Van Lancker, Wauters and Van Huylenbroeck, 2016). Numerous
challenges are posing in 2018 in the automate industry which is leading business to the boom
beginning. Here are discussed major trends in 2018 carried in entire auto-mobile industry:
Sales Slowdown: According to the 2017, 17.1million vehicles were sold which is increased 20
million annually. But due to great recession and dealers, sales are predicated to decrease to 16.6
million.
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 Electric Vehicle: Sales of electric vehicles are on boom increased to 30% that has been
predicted to grow rapidly by 2020 as companies like BMW, Ford etc. are producing these
extensively to go green.
 Air Compressor: This technologies create fuel cell stack which accelerate which is
trending in 2018. It is supposed to increased rapidly in future.
Hence, among numerous methods and technologies, Mercedes-Benz is developing
various technologies i.e. popularising each and every day. Here are discussed some major
Mercedes-Benz trending on the grounds of SWOT: Expansion in Emerging Markets: the company has emerged and deployed their business
in the international markets including developing nations such as India, South Africa etc. Safety Features: S-class had numerous autonomous features of driving along with latest
model including Traffic Sign Assist, Attention Assist, Crosswind Assist etc. These
framework can aid in managing innovations and various modifications can lead to more
working practices.
 Advancement in Technologies: Numerous models were launched in 2018 that are
revolutionising such as MFA platform (E-cars), AMG GT, C-class, E-Class, S-Class, G-
Classes, SL Classes etc.
In previous few decades, advancement and evolvement in the technologies has disrupted
which is manufacturing and managing innovation widely. Through the assistance of
digitalisation, companies are aiming high technologies and artificial intelligence have catered
drastic development opportunities in this segment to develop. Here are discussed some major
trend predication that can drive in future by Mercedes-Benz and other automate organisation:
 Machine learning as well as artificial intelligence functioning can be disrupted in car
companies as well making the process of consumer management and manufacturing units
easier at numerous level.
 Industrial Automation and Digital Twins are helping in the creation of virtual copes
which is creating efficient machinery, opting operations and reducing costly prototypes.
 Smart industrial robots rendered by cutting-edge software as well as vision framework
are predicted in future leading to flexible manufacturing.
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 2.0 Hybrid cars framework have enabled in market produced or developed by numerous
organisation. Hence, industry will drastically be improving such models in future as the
idea is highly appreciated in market.
CONCLUSION
This can affirm from the above states notions that innovation management is crucial for
improvisation and development of organisation. This is significant for increasing sustainability
and reflects the required and demanded changes which carries with time in future. It is
significant to make alternation and modifications within organisation to refrain with time and
rule the entire industry in terms of technologies and advancement.
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REFERENCES
Books and Journals
Antikainen, M. and Valkokari, K., 2016. Framework for sustainable circular business model
innovation. Technology Innovation Management Review. 6(7). pp.5-12.
Archibald, R. D. and Archibald, S., 2016. Leading and Managing Innovation: What Every
Executive Team Must Know about Project, Program, and Portfolio Management. CRC
Press.
Archibald, R. D., 2017. Leading and Managing Innovation: What Every Executive Team Must
Know about Project, Program, and Portfolio Management. Auerbach Publications.
Chen, J., Jiao, H. and Zhao, X., 2016. A knowledge-based theory of the firm: managing
innovation in biotechnology. Chinese Management Studies. 10(1). pp.41-58.
de Zubielqui, G. C., Jones, J. and Statsenko, L., 2016. Managing innovation networks for
knowledge mobility and appropriability: A complexity perspective. Entrepreneurship
Research Journal. 6(1). pp.75-109.
Prokop, V. and Stejskal, J., 2017. Different approaches to managing innovation activities: An
analysis of strong, moderate, and modest innovators. Engineering Economics. 28(1).
pp.47-55.
Van Lancker, J., Wauters, E. and Van Huylenbroeck, G., 2016. Managing innovation in the
bioeconomy: An open innovation perspective. Biomass and Bioenergy. 90. pp.60-69.
Online
Leading through innovation. 2018. [Online]. Available through:
<https://www.mbusa.com/mercedes/benz/innovation>.
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