Comparative Analysis of Mercedes-Benz, Audi, and Porsche in Canada

This report provides a comprehensive comparative analysis of three German automobile organizations – Mercedes-Benz, Audi, and Porsche – focusing on their operations within the Canadian market. The analysis delves into the internal and external environmental factors influencing these companies, including Porter's five forces, SWOT, and PEST analyses to understand the competitive landscape. The report examines their market entry modes, competitive advantages, strategic cost considerations, and value chains. Furthermore, it explores the drivers of globalization and key success factors within the automotive industry, offering a detailed understanding of the challenges and opportunities faced by these leading automotive brands in Canada. References from credible sources are provided to support the analysis.

Running head: COMPARISON BETWEEN ORGANIZATIONS
COMPARISON BETWEEN ORGANIZATIONS
Name of the Student
Name of the University
Author Note

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Executive Summary
The analysis in the report is based on three automobile organizations of German origin
namely, Mercedes Benz, Audi and Porsche. The operations of the three companies in
automobile industry of Canada has been analysed in the report in detail. The internal and
external environment based factors of the organizations have been discussed in detail.

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Table of Contents
Porter’s five forces analysis of automotive industry......................................................3
About the organizations.................................................................................................3
Entry modes of the companies in Canada......................................................................4
Type of advantage enjoyed by the companies...............................................................4
SWOT analysis...............................................................................................................4
SWOT analysis of Mercedes Benz............................................................................4
SWOT analysis of Audi.............................................................................................5
SWOT analysis of Porsche.........................................................................................5
PEST analysis of automotive industry of Canada..........................................................6
Strategic cost, value chain, competitive strength and advantages.................................6
Drivers of globalisation..................................................................................................7
Key success factors of automotive industry...................................................................7
References......................................................................................................................9

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Porter’s five forces analysis of automotive industry
Threats based on new entrants – The automobile industry of Canada is not able to
provide opportunities to the new companies to enter. The major reason behind the weakness
of this force is based on the requirement of huge amounts of capital.
Bargaining based power of the suppliers – The power that has been developed by
suppliers in the automotive industry is low due to presence of huge number of suppliers for
the large organizations (Hitt, Li & Xu, 2016).
Bargaining power of the buyers – The buyers in automotive industry have moderate
levels of power in order to influence the prices of products.
Threats of the substitutes – The threats that are provided by substitute organizations in
the industry are low. The alternative transportation modes are not able to fulfil the needs of
consumers of the automotive organizations.
Competitive rivalry – The levels of competitive rivalry in the industry are high and
the organizations in the automotive industry are able to provide major levels of competition
to each other (Holtbrügge & Berning, 2018).
About the organizations
Mercedes Benz is a multinational automobile based organization that has its origin in
Germany. The organization was established in the year 1926 and operates in the luxury car
based industry (Mercedes-benz.com, 2019).
Audi AG is an automobile manufacturing company of German origin that was
established in the year 1910 (Audi.com., 2019).

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Porsche AG is also a German automobile organization that has its headquarters in
Stuttgart and operates under the organization named Volkswagen AG (Porsche.com., 2019).
Entry modes of the companies in Canada
The market entry mode that has been implemented by Mercedes Benz in Canada is
wholly owned subsidiaries. The similar market entry is also implemented by the two other
German organizations namely, Audi and Porsche in order to enter the automobile industry of
Canada.
Type of advantage enjoyed by the companies
Comparative advantage has been gained by Mercedes Benz in the international
operations in automobile industry of Canada. The advantage is based on the levels of
innovation of products.
Audi and Porsche have also been able to develop comparative advantage in the
automobile industry and in the operations of the organizations in Canada. The levels of
competition in the industry have been increased due to these factors (Holtbrügge & Berning,
2018).
SWOT analysis
SWOT analysis of Mercedes Benz
Strengths – The manufacturing facilities of Mercedes Benz are located in different
parts of the world. The continuous innovation is also a major strength of the organization.
The company is financially stable in nature and is able to provide different types of products
to the customers.
Weaknesses – The after sales services and maintenance are expensive. The
distribution process of Mercedes is not strong (Karakaya & Stahl, 2015).

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Opportunities – The growth opportunities are provided to Mercedes from the
emerging markets. The demands related to premium vehicles have increased. The strategic
alliances are major opportunity based on growth.
Threats – The levels of competition in the industry are high and fuel based prices are
volatile (Law, 2017).
The internal strengths are able to support Mercedes Benz in order to take advantage of
the major opportunities that are offered to the company in the industry.
SWOT analysis of Audi
Strengths – The technology and precision levels of the products of Audi are important
for the operations. The brand value is also considered to be a major strength that has been
developed by Audi.
Weaknesses – The lack of proper diversification is an important factor that is able to
affect the revenue levels of Audi. Communication and promotional activities of the
organization are not effective (Lysenko, Mills & Schwartz, 2017).
Opportunities – The innovation levels in the products can be increased and emerging
markets can be targeted by Audi.
Threats – The customer base of Audi is limited and many other premium brands are
already operating in the industry (Middlebrook, 2016).
The technology levels in Audi are able to provide opportunities to the company in
order to increase its operations in various parts of the world.

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SWOT analysis of Porsche
Strengths – The brand image and reputation that has been formed by Porsche is an
important strength of Porsche. The levels of brand extension of the company are also major
parts of the position that has been developed.
Weaknesses – The middle customer base of the automotive industry cannot be
satisfied with the help of products that are offered. The costs based in maintenance of the
products are also high (Tulung, 2017).
Opportunities – Porsche has the opportunity to grow and develop exclusive cars that
can be provided to customers.
Threats – The government policies in a country and high levels of competition are
important threats that have been provided to Porsche (Lysenko, Mills & Schwartz, 2017).
The image and reputation that has been developed by Porsche in the Canadian
automobile industry is an important factor for the growth opportunities.
PEST analysis of automotive industry of Canada
Political factors – The regulations and laws that are developed by the government of
Canada have an impact on the automobile organizations that operate in the country. The
political situation is able to affect the ways by which automotive industry is able to operate.
The taxation based policies in Canada and the tariffs are able to support the organizations in
automobile industry. The three organizations like, Mercedes Benz, Audi and Porsche are
affected by the political stability levels.
Economic factors – The economy of Canada is affected by the levels of profitability
and revenues that have been gained by the automobile organizations. The automobile based
market is able to provide a huge amount of contribution to the GDP of Canada (Hitt, Li &

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Xu, 2016). The fuel prices in Canada are influenced by changes that take place in the
economy of Canada. The Canada-US free trade agreement is a major factor that has been
helpful in the development of a welcoming environment for automobile companies. The
prices of fuel have an impact on the sales of Mercedes Benz, Audi and Porsche.
Social factors – The brand value of an automobile organization has an impact on the
choice and preference levels of the consumers in Canada. The buying based pattern of
customers can change due to the economic condition. The buying behaviour of consumers are
considered to be an important factor that affect the sales of Audi, Porsche and Mercedes
Benz.
Technological factors – The mature levels of technologies that are used by the
organizations can affect the ways by which automobile organizations in Canada can develop
the products and offer them to the customers (Holtbrügge & Berning, 2018). The changes in
technological environment have a major impact on the products that are developed by Audi,
Porsche and Mercedes Benz.
Strategic cost, value chain, competitive strength and advantages
The four major building blocks of the three major automobile organizations of
German origin namely Mercedes Benz, Audi and Porsche including, value chain, strategic
cost, competitive advantages and strengths can affect the revenue levels that are gained in
Canada. The strategic cost based levels of the three organizations can have an impact on the
prices of different products. On the other hand, the value chain is developed by the
companies with respect to the brand and the suppliers of the organizations. Competitive
strength and advantages of the organizations are related to exclusive products that are offered
to the customers in the automobile based industry (Karakaya & Stahl, 2015). Innovation is
considered to be the major competitive advantage of Mercedes Benz. The cutting edge based

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logistics processes are important factors that have provided a competitive advantage to Audi.
The levels of fuel efficiency that are offered by the cars of Porsche have provided the
company with an edge over others in the industry.
Drivers of globalisation
The globalisation based activities that are performed by the modern organizations
have an impact on the products that are developed and the ways by which they are offered to
the customers. The automobile industry of Canada is affected by globalisation in a huge
manner The major drivers of globalisation include,
The advancement of technology is able to drive the operations of automobile
organizations like, Audi, Porsche and Mercedes Benz in Canada. The
operations of the companies across borders are considered to be important
(Lysenko, Mills & Schwartz, 2017).
The high levels international trade in Canada are considered to be a major
driver that is able to strengthen the international operations of the automobile
organizations in the country.
International investments that are made by the international automobile
organizations are affected in a positive manner by the globalisation (Hitt, Li &
Xu, 2016).
Key success factors of automotive industry
The key success factors that are a part of the automobile industry are,
The positive brand image that is developed by the automobile organizations in
Canada are important for the success levels that are gained. The promotional
and advertising based activities of the organization are important for the ways

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by which operations can be successful (Tulung, 2017). Audi and Mercedes
Benz have developed an effective brand image in Canada.
The network based on distribution that is developed by the automobile
organizations is able to provide major opportunities related to growth to the
three companies. The distribution network of Audi is highly effective for the
operations in Canada.
Cash flow and capital levels of the Mercedes Benz are important factors that
have an impact on the success levels and the revenues that are gained
(Lysenko, Mills & Schwartz, 2017).
The flexibility of the operations of different automobile organizations can
affect the success and revenues that can be gained by Mercedes Benz, Audi
and Porsche in the competitive automobile industry.

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References
Audi.com. (2019). Audi.com – the international Audi website | audi.com. Retrieved from
https://www.audi.com/en.html
Hitt, M. A., Li, D., & Xu, K. (2016). International strategy: From local to global and
beyond. Journal of World Business, 51(1), 58-73.
Holtbrügge, D., & Berning, S. C. (2018). Market entry strategies and performance of Chinese
firms in Germany: The moderating effect of home government support. Management
International Review, 58(1), 147-170.
Karakaya, F., & Stahl, M. J. (2015). Global Barriers to Market Entry for Developing Country
Businesses. In Proceedings of the 1993 World Marketing Congress (pp. 208-212).
Springer, Cham.
Law, C. M. (2017). Restructuring the global automobile industry. Routledge.
Lysenko, D., Mills, L., & Schwartz, S. (2017). Does Canada need trade adjustment
assistance?. International Journal, 72(1), 91-110.
Mercedes-benz.com (2019). Mercedes-Benz International: News, Pictures, Videos &
Livestreams.. [online] Mercedes-benz.com. Available at: https://www.mercedes-
benz.com/en/ [Accessed 18 Mar. 2019].
Middlebrook, K. J. (2016). Automobile Industry. Social Reconstructions of the World
Automobile Industry: Competition, Power and Industrial Flexibility, 200.
Porsche.com. (2019). Official Porsche Website - Dr. Ing. h.c. F. Porsche AG. Retrieved from
https://www.porsche.com/

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Tulung, J. E. (2017). Resource Availability and Firm’s International Strategy as Key
Determinants Of Entry Mode Choice. Jurnal Aplikasi Manajemen, 15(1), 160-168.