Contemporary Developments in Business & Management of Mercedes-Benz

This report provides an analysis of Mercedes-Benz's business environment and contemporary developments in business and management. It utilizes tools such as PESTLE and Porter’s Five Forces to evaluate the external factors influencing the organization. The report examines Mercedes-Benz's marketing communication mix, assesses the effectiveness of the company's responses to market changes, and identifies areas for improvement. It highlights the company's strengths, such as its brand value and continuous growth, while also addressing challenges related to competition and economic factors. The analysis covers both macro and micro environmental factors, including political, economic, social, and technological influences, as well as internal aspects like employees, customers, and management. The report concludes with recommendations for future business development, focusing on innovation and sustainable practices.

CONTEMPORARY
DEVELOPMENTS IN
BUSINESS AND
MANAGEMENT
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mercedes

EXECUTIVE SUMMARY
The business of the Mercedes has seen many changes till now in the markets and is still
standing firm in the markets with high brand value. This is the result of the effective business
policies and operations of the company. Here, particularly in this assignment of contemporary
developments in business and management the business environment of Mercedes is analysed
with various tools like Pestle, Porter’s forces etc. Mercedes is one of the organizations who has
seen continuous growth in all the business sectors and is capable to change the scenario of the
markets with the new innovation and vehicle models. This study includes the marketing mix for
the company and finally, the responses of the company have been evaluated with some
improvement areas.
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CONTENTS
EXECUTIVE SUMMARY.....................................................................................................................1
INTRODUCTION................................................................................................................................3
TASK 1..............................................................................................................................................4
BRIEF OVERVIEW OF THE PRIMARY EXTERNAL INFLUENCING FACTORS TO THE
ORGANIZATION AND IMPORTANCE OF EACH TO THE ORGANIZATION......................................4
MACRO ENVIRONMENT...............................................................................................................5
MICROENVIRONMENT.................................................................................................................8
TASK 2............................................................................................................................................10
2.1 MARKETING COMMUNICATION MIX AND ITS RELEVANCE TO MERCEDES AND HOW IT
INFLUENCES POLICIES AND DECISION-MAKING WITHIN THE ORGANIZATION.........................10
EFFECT ON POLICIES AND DECISIONS OF THE COMPANY.........................................................12
2.2 EVALUATION OF THE EFFECTIVENESS OF THE MERCEDES RESPONSE................................13
2.3 AREAS FOR IMPROVEMENT IN THE RESPONSE OF THE MERCEDES....................................15
CONCLUSION.................................................................................................................................17
REFERENCES...................................................................................................................................18
APPENDIX.......................................................................................................................................20
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INTRODUCTION
Mercedes-Benz is one of the organization which is popular in every country of the world and
people desire for its cars. It generally deals in the automobile sector only but nowadays it has
also business in the financial sector. It produces luxury cars, trucks, buses and vans which are
made brilliantly such that there is no chance of any error in the production or any other
business operation. If it is asked for someone that what brand he/she wants in an automobile,
Mercedes is in the answer (Daunton, 2015). Further for the future growth in the middle-class
sectors of the world or in the developing countries like China, India, Argentina, Turkey, etc., the
company has to analyse its present growth and presence in the markets.
For analysing some of the factors that influence the business operations of the organization and
it's decision-making process some tools will be used in this assignment like PEST analysis,
Stakeholder analysis, Porter’s Five Forces etc. Further in this assignment for the contemporary
development in the business and management of the Mercedes, its marketing communication
mix is illustrated to evaluate the position of the organization and the responses it gives to the
changes in the business environments. Finally, some recommendations will be made that can
significantly facilitate some better ways for the development of the business of the organization
successfully.
Figure 1: Mercedes Logo
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TASK 1
BRIEF OVERVIEW OF THE PRIMARY EXTERNAL INFLUENCING FACTORS
TO THE ORGANIZATION AND IMPORTANCE OF EACH TO THE
ORGANIZATION
Mercedes is the global automobile brand started from Germany, it is the division of the Daimler
AG. Today the brand is the well known brand for the coaches, luxury cars, sports cars, buses,
trucks etc. The organization is created by the Karl Benz and Gottlieb Daimler in 1926. At
present, it has many subsidiaries and alliance operations in many countries to serve the people
with the world-class products. The company also manufactures cycles and electric cars
regarding the safety and protection of the environment and is very focused on this field to
expand the business in future (Bah and Fang, 2015). Till now the company has seen many
changes in the business environments and has never taken any step back in the business. The
business environment of the company includes both the internal and external factors of the
business which have both positive and negative impacts on the organization. Here for
understanding the external business environment or the macro environment of the
organization, PEST analysis is performed which is described below.
Figure 2: Macro and Micro Environment of Mercedes
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MACRO ENVIRONMENT
PEST ANALYSIS
POLITICAL – these are one of the most important factors which are the major concern of most
of the companies but in case of the Mercedes, it is a little issue because of the effective
management team and proper planning. The organization has widespread business all over the
world and hence it has to deal with the import and export bodies of the government and their
laws and taxation. Sometimes these taxes are much higher while in some cases it is sufficiently
suitable for the organization (Hamilton and Webster, 2015). With the increase in the business,
it has developed many manufacturing sites all over the world to deliver the vehicles fast and
with fewer customs duties. In the UK there are some issues in the political structure and
policies of the government because of the Brexit but for this, Mercedes has increased its
operations in the other sites to fulfil the needs of the customers (Wetherly and Otter, 2014).
ECONOMIC – it is the factor which is directly linked to the financial terms of the business. the
economy of any country is directly linked to the automobile industry as people with high
earnings always seeks to buy a new or better vehicle. While in case of inflation, the common
people can never afford cars of Mercedes. Now the company has many models that are
designed for the higher middle-class people so that they can also get served by the best
facilities of the company. the economic condition of the UK is not well but the company has
many strategies to marketize their products and attain their goals.
SOCIAL – here the population and their cultures are the major role players. People’s behaviour
towards the brand is one of the major concerns of the companies and even today Mercedes is
far away from the reach of middle-class people. One of the major reason is the referral policy of
the company for any new purchase, because of this only the people with the high standard can
buy it. Talking about other social factors, the company is very popular among all group of
people in terms of the case, culture, age, gender because of its big brand image it created in
past 90 years.
TECHNOLOGICAL – the company has very less competition in terms of the technological
changes in the macro environment because of the reason that it always performs huge research
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on all the possible ways to make their vehicles and services best in the world (Ehret, et al 2014).
Mercedes is the first company to present the petrol operated vehicle in the world, and till now
it is using the best technologies in their vehicles which is the reason why their cars are pretty
costlier than others.
Figure 3: PEST Analysis
Source: [Cirkovic D., 2017]
PORTER’S FIVE FORCES
Porter's five forces are one of the tools that effectively describes the position and value of the
organisation in the markets where it operates. This includes five major forces of the markets
that influence the operations of every organization. The Porter’s Five forces for the Mercedes
are described below.
THREAT OF SUBSTITUTES – for the Mercedes the threat of the substitutes is one of the major
concerning point because of the presence of the companies like BMW, Jaguar, Audi etc. while
the companies like Volkswagen, Toyota, etc. are emerging in the luxury segment which is
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creating major problems for the Mercedes. Today, the threat of the new substitutes for the
company is directly linked to the innovation and technology because of environmental safety
and protection laws.
THREAT OF NEW ENTRIES – the new entries of the automobile markets have to do very hard
work to directly pose competition for the companies like Mercedes. This organization is one of
the largest automobile company which never have problems with the new competitors until
they come with very latest technology at low cost.
COMPETITORS RIVALRY – this is the major problem of the market of Mercedes in its class of
vehicles. There are many companies that pose tough competition to the company in all the
business operations from research to sales (Prajogo, 2016). With the advancement in the new
technologies for marketing, production, sales and management all the companies have tough
competition from each other.
BARGAIN POWER OF SUPPLIERS – since the company has an operation in almost every country
of the world hence there are many cases of big demands by the suppliers of the raw material
and final parts for the vehicles. Sometimes, with the inflation, the suppliers of the business
increased their demands which creates the problem for the company.
BARGAINING POWER OF CUSTOMERS – Mercedes provides world-class vehicles and services
because of which the bargaining power of the customers of the company is not a big deal. The
company has customer centred activities that are only to serve the people with the best
product in the world. This is a reason why company’s vehicles are always in the higher price
ranges.
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Figure 4: Porter’s Five Forces
Source: [Myers M., 2013]
MICROENVIRONMENT
This is the factors that exist within the organization like the employees, management,
customers, suppliers etc. The microenvironment of the company is:
EMPLOYEES – these are the major stakeholders of any organization. The management of the
Mercedes is highly focused on giving them the best working environment so that their outputs
gets rewarded. Employees of the business impacts the overall functioning of the organization,
hence fulfilling their needs is the duty of the management team of the company. The people
inside the company are satisfied with the facilities they get, financially or supportively.
CUSTOMERS – this is one of the oldest company in the automobile sector and hence it has the
experience to handle the needs of the customers and maintain a better relationship with them.
All over the world, there are millions of Mercedes cars running on the roads and there has
never been a big issue for the customers in the quality of the vehicles.
MANAGEMENT – the management team of the company is very focused on delivering the best
products to the people according to their desires. Moreover, they also provide a lot of
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motivation to their employees, implement best marketing strategies and regular training to the
employees.
These described macro and microenvironmental factors of the business of Mercedes are very
essential for the company. While if it has been emphasised that the influence of the factors is
majorly positive on the business operations of the company, which is because of the best
planning and decisions of the authorities of the company (Messai and Jouini, 2013). In future,
with the help of more research on finding better ways for eco-friendly engine mechanisms that
are cheap and beneficial for all and grow successfully.
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