Globalization and its Challenges: A Case Study on Mercedes Benz

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Globalization and its challenges: A case
study on Mercedes Benz
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Table of Contents
Introduction......................................................................................................................................3
Discussion........................................................................................................................................3
Task 1: Analyse the key factors of cost, market, environment and competition that drive global
commerce and trade. (P1)............................................................................................................3
Task 2: a) Explain the complexity of strategic challenges faced by organizations like SASOL
Limited or any organization of your choice when operating in a global environment supported
by specific examples (P2)............................................................................................................6
TASK 3: Evaluate the influences of globalization on organizational governance and leadership,
structure, culture and functions of any organization of your choice. (P3)......................................8
b) Evaluate the influences of ethical and sustainable globalization on organizational functions
(P4)................................................................................................................................................10
TASK 4......................................................................................................................................11
a) Evaluate the different ways decision-making can work effectively in a global context. (P5)
...................................................................................................................................................11
b) Determine and articulate the various routes to internationalization an organisation may
adopt, including key barriers (P6).............................................................................................13
Conclusion.....................................................................................................................................14
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Introduction
In today’s contemporary world, Globalization and its challenges are a vast topic to be discussed
while analyzing a specific business. In this context, the concept of marketing, business
environment, key factors of success and costing affections can be important factors. This present
report has emphasized on the aspect s of globalization and its challenges according to Mercedes
Benz for having the better impacts of the selected topic. Moreover, the study has the focus of
decision-making abilities over the context of globalization to have better analysis. By the
completion of this assignment, there is the chance of gaining the identification of the concept of
globalization. In addition, the assignment is helpful for the prominence of proposing actual
methods that are effective to reduce the challenges of globalization according to several business
organizations.
Discussion
Task 1: Analyse the key factors of cost, market, environment and competition that drive
global commerce and trade. (P1)
The automobile business is always fluctuating as per the different scenario of different countries.
If the matter is Key Factors of Cost then the company worked in various sections to develop their
cost system (Hanelt et al., 2015). Like, Automation; they invented and applied their automatic
technology to almost every part of their vehicles. E-mobility and mobility, where the company is
included almost the total android system with their product and delivery facility too (Meier and
Zimmermann, 2016). Connectivity towards almost all country is very much flexible as per their
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strategy. These all points are made easy their aspect to the market. They can easily work with
their cost based upon the mentioned points and that is quite acceptable to the market.
Marcedez Benz is already touched the moon of market. It is now easily understandable that for
capturing the market they have already experimented with their product first (Hildebrandt et al.,
2015). However, they have started with public vehicles but later they also expanded their
business towards logistics as well by investing in the manufacturing of trucks. According to the
statement of Schnedler-Meyer et al. (2016), automatically they targeted the heavy industry
businesses. They heredity and luxury they maintain is remarkable.
For the environmental and global competition part, they are always competing with the other
luxury brands. Still they are in the top level. The global scenario of their business areas and
opportunities are mentioned below;
Factors Effects
Political  The democracy is parliamentary
 The Constitutional monarchy is federal parliamentary
 Liberalism, Moderate and Egalitarian Tradition is there
 It’s a Total Democracy Oriented
Economic  As per the present global scenario, the economical scenario is
slightly decreased or may decrease by 2020
 The National Bank is ready to balance the scenario
Social  Individual rights oriented, daily life related
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 Involvement of Public Sector for stimulating the upcoming
factors
 The businesses are also cultural activity related
Technological  Curious to adopt the new technology
 Contentious Scientific research is a common phenomenon for
updating technology
 The main characteristics is to application of innovative ideas in
industrial research
Legal  Various law is there in every step to control the dark side
 Youth generation is always in the monitor for maintain and
create the refined future
 Law in business is an absolute different part for controlling any
discrepancies
Environmental  Increasing pollution is a forehead shrinking matter
 Land area and Ports are always in the special observation
 Summer are though stable but sudden snow effects the import
and export part of any business
Table 1: PESTEL Analysis
(Source: Created by Learner)
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Factors Effects
Strengths  One of the best selling product throughout the globe
 Manufacturing units are there through out almost 26 countries
 Enough market in the developing nations
Weakness  A little expensive based on the economy of developing nation
 The way of distribution is quite narrow
Opportunities  Asian markets is the golden area for their growth
 Continuous increasing demand
 Effective towards to their business strategy
 Technologically updated.
Threats  Presence of competition there with other luxury car makers
companies
 Fuel prices effects
 Imbalance in global economy effects the business somehow
 Matched up with the government policies
Table 2: SWOT Analysis
(Source: Created by Learner)
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Task 2: a) Explain the complexity of strategic challenges faced by organizations like
SASOL Limited or any organization of your choice when operating in a global
environment supported by specific examples (P2)
Globally, Mercedes – Benz has expanded their business for continuing their business growth in
an effective manner. In order to do so, the company has applied some valuable strategies that can
be essential in terms of successful business growth in a specific marketplace. By the analysis
from Bartleby.com (2016), the esteem company has expanded their business in global manner by
opening some manufacturing plants. In this case, the selected regions for the manufacturing
companies can be not so effective in terms of economic profits. On the other hand, the labour
cost may be high in manner in some specific regions. Moreover, the efficiency level of
employees is varying from region to region, especially for the diverse places. In addition, the
company is specific for opening various outlets in different places as per the necessity. In this
present context, there can be the situation by which the company can get complexity form the
suppliers as per the in-efficiencies of delivering the required materials. The most effective
growth factor of Mercedes-Benz can be considered as the prominence of providing hybrid and
diesel engines that are effective in terms of consuming low fuels (in case of high prices on fuels).
Innovative culture is another strategic implementation that is present in the business processes of
Mercedes Benz (Bartleby.com , 2016). Latest technological interventions are implemented in the
cars so that the services can be provided for the customers in a native manner.
According to this scenario, the company can be hampered by the irregularity of reviewing the
innovative processes with proper implementation methods. Moreover, the technological teams
are needed to be more concise so that the chances of misbalancing can be occurred in the
performances of latest technological cars. The product differentiation portfolio is an element of
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company’s strategy. In the year of 2017, the company had launched Mercedes-Benz X-class,
which a premium portfolio that will be sold in Australia and other European countries
(Annualreport.daimler.com, 2017). In this context, this can be stated that the company is trying
to imply the needful factors that can be effective in terms of customer engagements. In case of
appointing non-effective approaches of customer engagements, this can be costly or non-
profitable for the company. Moreover, the human resource activities are the backbone of any
company’s organizational structure or organizational operational activities. According to this, the
company has to be more concerned about the effective approaches of HR activities so that the in-
efficiencies cannot be present for hampering the business processes of Mercedes Benz.
With the help of appropriate strategic approaches a specific business organization can be more
focused with their desired organizational goals. Moreover, the strategic implementations are
much more complex when it is not implemented with the proper approaches. For better instance,
the company Mercedes can be more concerned to effective strategies with the proper
implementation methods so that the improper complexities cannot be there to hamper the present
business scenario of the particular company.
TASK 3: Evaluate the influences of globalization on organizational governance and
leadership, structure, culture and functions of any organization of your choice. (P3)
Nowadays, business organizations had to face many challenges and had to deal with many
factors for the globalization, as they had to get accustomed with the constant changing
atmosphere of the markets in the world. By the opinion of Michelli (2016), globalization
influences many factors of a business organization. Here, the company Mercedes is taken and it
will be discussed that how Mercedes, gets accustomed to the markets in the world. Many
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renowned magazines declared Mercedes Benz as one of the top cars globally. Mercedes sells its
cars to very section of people like the people who belongs upper middle class, middle class. It
changed its way to turn itself into a car company, which not only pays attention but also pays
attention to providing customers the cars that suits their need and their way of living. In order to
establish their markets globally, they did so. This company has their centers for designing in
every part of the world that means they have their hubs in every parts of the world (Franz et. al.,
2017). This makes them design their cars according to different sections of people across the
globe and they can properly screen the way of living of different people in different parts of the
world. Mainly Mercedes is automobile company, which deals with luxury cars of varied models.
After introducing Mercedes Benz in the market, it got recognition from all sections of people.
Most importantly, it got huge success in India as, In India; there are varied class of people with
different style of living. This company’s recent proceeding in the direction of selling huge
number of cars by diminishing the cost to an extent, gathered huge success all around the globe
and the business experienced a hike everywhere. Every customer expects that the amount paid by
him or her should get the right worth of it. However, the company pays attention to the quality
and uses high quality of metals in making the cars. Mercedes-Benz does not need high promotion
because of their huge brand value and recognition of themselves as one of the best selling cars
around the globe. In short, its name is enough. The strategy of modifying themselves in
accordance with changing time made them hugely popular among young buyers. It has
introduced a varied range of models in the market like M-Class, A-class, B-Class and it has been
highly appreciated by the customers, which hiked the sales of this automobile company across
the markets globally. Mercedes has coined a term called “Blue Efficiency” and applied it, to
diminish the discharge of carbon dioxide which made them superior compared to the other
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automobile companies in the market (Shaw, 2019). Mercedes Benz, which is recognised as the
best selling product of Mercedes has been in the market for over a century. The self-innovative
techniques in market strategies and in introducing new models of cars for the global audience
made its way to one of the top selling cars of the world (Kaiser et. al., 2017).
b) Evaluate the influences of ethical and sustainable globalization on organizational
functions (P4)
Ethical and sustainable aspects are very much responsive for the affections of positivity that are
concerned for the development of any business organization. Moreover, these aspects are
advantageous for the prominence of essential consecutive aspirations that are subjected to the
successful business in a specific region or marketplace. On the other hand, the there can be the
affections of positive organizational functions by the maintenance of effective ethical and
sustainable attributes.
Ethical Influences of Globalization: Globalization created an atmosphere of community among
not only the people of various countries but also the major business organizations. Companies
had to come up with newly reformed business ideas and strategies in order to do business on a
global scale market. For a huge multi-national company like Mercedes, it is important to manage
a positive image of the brand in the global market. This can be done by doing a transparent
business and have a satisfied customer base as well as having a good relationship with the
suppliers of products, business partners and all the employees of the organization. In addition to
that a company like Mercedes must also have a positive effect on the society in general. The
environment of the organization must encourage the employees to feel greatly happy about
working in that organization and Mercedes obviously follows this in order to keep give their
employees this environment. By the view of Crane and Matten (2016), the employees feel that
they have a secure future in the Organization then the output of their performance will
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significantly rise and this will help Mercedes to reach its business goals. In addition to that,
Mercedes strives to respect the Human Rights and tries to comply with the laws and regulations
of the country they are doing business. The Company prevents itself and all its employees from
all forms of corruption and tries to protect the major assets of the Company. Moreover, Mercedes
tries to keep its integrity while dealing with local government whenever they are trying to
expand their business in some countries and proper protocols are followed when the Company
deals with customers and gives heed to their valuable feedbacks regarding their vehicles (Da
Silva et al., 2016).
Globalization influencing Sustainability: For any organization to sustain in this modern global
market it is very important to make use of the wider market that is available with globalization.
Mercedes is constantly trying to expand its markets in the developing Asian countries. In order to
cater to the consumer base in the developing Asian countries the Company is devising newer
strategies based on the ethical and cultural norms of these countries. Although the brand image is
a very popular and attractive one but in order to stay ahead of its competitors Mercedes is
upgrading their luxury cars with the cutting edge technologies so that the younger generation
may consider the brand instead of their competitors (Najam et al., 2016). Moreover, they are
constantly improving their services depending on the specific customer base that they are
catering to. They are employing local employees in particular areas in order to give the local
customers a familiar face to talk with when they are coming to buy a premium car from
Mercedes. The overall growth of the global economy will have positive impacts on the financial
sustainability of the company but Mercedes has made many back up plans regarding financial
reserves in order to sustain their business even if they face some form of loss in any country
(Noe et al., 2017).
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TASK 4
a) Evaluate the different ways decision-making can work effectively in a global context.
(P5)
Decision-making is an action which is actually selected from different and substitution part to
achieve the aims and mottos of the organization. It is a continuous process and positive side of a
business organization. Decision-making helps a superior to apply his or her innovative ideas to
the production situation wise (Iimcal.ac.in, 2015). Mercedes is also doing the same; all the
managers are quite effective for the development of the company through out almost the all
continent. As the result, they are ruling almost 27 countries with the manufacturing unit.
Decision-making are there in almost every way inside the company because Mercedes started
their business as public vehicles manufacturer but later they expanded to heavy vehicles like
trucks as well.
It is a visible matter now that decision-making in different ways really works in a global context.
As a result, Mercedes is now a top automobile company throughout the globe.
Course Objectives: There must be some strategies for any individual to catch their goal. The
decision Mercedes are taking continuously for expanding their business is remarkable. Now they
are the most dependent luxury automobile company of Asia.
Mandatory Things: There must be few mandatory things in decision-making, if the company
wants to apply in the global context. Like; relation between managers, leaders and other staffs.
Maintain authentication.
Restriction: Restrictions or limitations are the words, which actually related with the legal and
open apart as well. The growing business company like Mercedes should focus to their cost and
to the protocol of other countries as well.
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