Mercedes-Benz: Strategies for Improving Business Operations and Sales

This report examines the business operations of Mercedes-Benz, focusing on strategies to improve sales, profitability, and market position. The analysis begins with an introduction to the company's global operations and highlights the challenges posed by competitors like BMW and Audi. It then explores various strategies, including implementing lean manufacturing, improving supplier relations, focusing on leadership, and developing financial strategies. The report also delves into production overhauls, personnel management, and benchmarking to enhance performance. Furthermore, it discusses the application of tools and techniques such as Six Sigma, DMAIC, value stream mapping, and Kaizen to address operational inefficiencies. The report concludes by comparing Mercedes-Benz's operational strategies with those of Audi and BMW, emphasizing the importance of product management, supply chain optimization, inventory control, and forecasting to maintain a competitive edge in the luxury automotive market. This report provides a comprehensive overview of the operational challenges and potential solutions for Mercedes-Benz, aimed at improving its business performance and market share.

Business operations and
Services

INTRODUCTION
Operations of company can be defined as daily activities of company which help to
increase profitability. Activities that help to earn revenue to cover expenses of business. Help to

manage challenges like marketing, sales grow in a business. Business operations vary according
to requirement and structure of a industry. Mercedes is a German automobile company
specialized in manufacturing luxury cars, buses and coaches. One of the largest seller of
premium vehicles all over the world. In this report will analyze problems that affect overall sales
of Mercedes vehicles, introduce companies wide operations all over the world. Develop strategy
for tools and techniques that help to increase profitability of company and maintain their position
in market.
Part 1
1 Introduction of companies wide operations improvement strategy.
BMW is the leading firm that provides high quality automobile products to wide range of
consumers across the world. Recently Mercedes having a bad time due to increase in competition
from Audi and BMW. Overall quality of products are reducing day by day. Strategy that help in
improvement of operations in Mercedes are as follows.
Implementing Lean manufacturing process and improvement in supplier relation
Lean manufacturing is a strategy to reduce wastage within manufacturing systems to
increase productivity(Liu and Lin, 2017.). Lean manufacturing help to analyze value for
customers, produce product according to customers request. Reducing waste is one of the most
effective process to increase sales and profitability for business. In context of Mercedes company
is facing problem with their quality and reducing profitability of business. Company need to
reduce over production of their vehicles and wait to get orders from customers by creating value
for their products in customers mind. Analyze demand for product in different economies and
transport vehicles according to requirement of customers in a territory to reduce transportation
cost. Control excess inventory and raw materials that increases expenses of company. Reduce
workforce large number of unskilled workers will reduce overall productivity of business,
3,85,000 employees worldwide are working in Mercedes, company cut around 8500 jobs to
reduce wastage. Develop a process from beginning of production to delivery of vehicles. Process
help to identify improvement and reduce wastage of excess material it is an entire life cycle of
product and services.
Suppliers play an important role in each and every stage of product life cycle. Suppliers
provide raw materials to companies for manufacturing of final product. For success of business

Mercedes communicate regularly with their suppliers to reduce confusion and disagreement,
communication help to understand each other requirement(Uhl and Gollenia, 2016.) . Discuss
problems with supplier help to develop a relationship and build trust and respect so that they
work with loyalty towards company. Company get advice from their supplier about changes in
products which help to identify risk. Set roles and responsibilities help to work together and
reduce wastage.
Focus on leadership
Leadership help company to guide, direct employees towards achievement of
organizations goals and objectives, increases confidence and abilities of employees towards
work. In context of Mercedes, ineffectiveness of management team is unable to meet
organizational goal. Leadership help to complete work on time and improve effectiveness of
employees in company. Mercedes focus on leadership because it help them to make all other
employees work according to requirement of business. Leader help to shape behavior of
employees towards organizations success. Improvement in leadership help company to focus on
change. Leaders help to analyze employees while working in company to maintain quality of
vehicles. Improve ability of leader to focus on changes to produce product according to
requirement of company.
Financial strategies
Financial strategy help to improve operation management. Company need a plan and
define its objective to develop a financial strategy. Financial strategy help to generate revenue
for business. In context of Mercedes financial strategy help to use resources effectively.
Mercedes set budget according to requirement of their business by analyzing cost of products of
their competitors like BMW and Audi. Set budget by analyzing prices of raw materials, other
transportation and production cost. Budgeting help Mercedes to increase profitability of their
business in market. Mercedes aim to set budget is to increase overall sales of vehicles.
Production overhaul
Production overhaul help to improve quality of products(Lacity and Willcocks, 2017.). In
context of Mercedes company prepare process for producing their vehicles to minimize wastage.
Production overhaul help company to maintain quality and work according to set budget for
business. Strategy help to modify the way that Mercedes is using for producing products.
Personnel management

Personnel management help companies to aware about day to day activities in business.
Personnel management help to improve companies operations by analyzing employees. In
context of Mercedes help to analyze requirement of employees skills and abilities that company
require for development of products. Mercedes plan to launch a new S class series of luxury
class and to develop their product effective and attract customers towards business, company
need to train their employees to work with new technology. Effective training of employees help
Mercedes to compete with other rival companies like Audi and BMW. Help to plan for growth of
Mercedes to launch a new product.
Bench marking
Bench marking is use to improve performance and achieve organization goals effectively.
Bench marking help to analyze performance of competitors and gap in companies performance.
In context of Mercedes it help to plan for business and set goal according to requirement.
Mercedes collect information about vehicles of BMW to know what attracts customers towards
their product. Monitor marketing techniques used by competitors to develop strategy for their
own business..
Focus on quality
Maintaining quality of product help company to meet goal easily and develop business
(Heizer, Render and Munson, 2017.) . In context of Mercedes due to reducing quality of their
products customers loyalty decreases, and they are moving towards product of competitors.
Recalling vehicles due to increasing issues in batteries and brakes. Company need to improve
quality by hiring talented people those who can work better to improve quality of their products.
Tools and techniques
Organizations success largely depends on working of companies operation department
which help to achieve goals and objectives easily. Mercedes wants to compete with their
competitors by increasing their market share and some tools and techniques that help them in
improvement are as follows.
Six Sigma
Six sigma method provide organization with tools to improve capability of business. Help
improve quality of product and increase profit for business. Increase overall morale of employees

to work with full of their efficiency for development of business. Help to minimize problems in
product, process or service. Aim to increase customers satisfaction
Importance of six sigma for Mercedes
Due to increasing competition in market it effects overall business of Mercedes(Lee Park
and Paiva, 2018.) . Each and every automobile industry is finding ways to be innovative and
improve their services. Controlling cost for products become tough for Mercedes, customers
become dissatisfied from companies vehicles. Six sigma process help to meet requirement of
business for meeting the organizational goal.
Voice of customer
It is a foundation of process improvement and analyze measures of six sigma. It help
Mercedes to set process for achievement of objectives. Process that help to maintain smooth
working in business. Set process help to reduce wastage and maintain quality of companies
products and services.
Critical to quality
CTQ provide factors for success of organization. Mercedes need to analyze their
customers and develop process and products according to wants of customers. Manufacturing
product according to customers preference help the firm in satisfying buyers..
Value marketing
Value marketing help to develop a high quality product for success of industry. Quality
product help Mercedes to earn loyalty of customers.
Benefits of Six sigma
Proper implementation of six sigma help companies to generate profits for their business.
It provide flexibility to company to work with changes in market(Annarelli, Battistella and
Nonino, 2019.). Help to maintain position of business on top. Method help companies to know
that they meet all requirement of constantly changing environment and able to work with
changes to achieve goals of business. Changes in organizations working help to earn a
competitive advantage.
Six sigma tools
DMAIC

This is the method that first define problem, measuring of issue is done and improvement
strategies are implemented by the authority and at last controlling is done so that such problems
do not take place.
Define
Mercedes need to analyze their customers preference, quality issues that they are facing
in their product, And reasons due to which issues are arising. In this process Mercedes analyze
their business process that affects their working.
Measure
Company determine their current process that they are using in development of products.
Identify key improvement measures like reducing wastage, focus on leadership. Collect data
from competitors products and market to prepare plan for Mercedes.
Analyze
Mercedes need to analyze data that they collect from market about their competitor as
well as customers to improve abilities of their business process and fulfill their needs(Niaki and
Nonino, 2018.) . Analyzing competitors product help to develop opportunities for their business
to improve.
Improve
Developing leadership and reducing wastage in companies products help improve overall
performance of Mercedes. Company develop solution that help to fix problems and increase
profitability of business.
Control
At last company implement methods for improvement and analyze those methods to
know that they are performing effectively towards success of business.
Value stream mapping
Value stream mapping help to develop a flow of materials and information in overall
working of business. In context of Mercedes mapping help to reduce wastage and unwanted
activities to increase profitability of business.
Kaizen
Kaizen help companies to observe, identify improvement in manufacturing process of
business. In context of Mercedes Kaizen initiates that all employees and managers of companies

need to work for development of business(Helo, Gunasekaran and Rymaszewska, 2017.) .
Kaizen process help to ensure that waste need to be reduced with help of all other employees to
work effectively.
Cause and effect analysis
Mercedes facing problems with their competitors and reducing quality of their product.
Company analyze cause and develop a structure for improvement in their business. Company
need to reduce wastage of raw materials, use different methods of leadership for development of
business, measure performance of competitors to develop plans for their business.
Part 2
Operational strategies of organisation
Audi and BMW both are working effectively in market by grabbing attention of potential
buyers. Both companies allocate their resources in order to support infrastructure and production.
Strategy help companies to maximize effectiveness of their product.
Proper management or product
Audi maintains effectiveness of their product so that it can gain trust of buyers and can
satisfy them (Jagoda, Kiridena and Lin, 2016.). Managing product need to be effective and work
according to requirement of business. Company use different type of technology to improve
work quality and to maintain communication at workplace so that people can work better and
consumers can get satisfactory goods and services. Product management help to attract customer
and maintain effectiveness of organization.
Improved Supply chain
Audi and BMW both have an effective supply chain for their products and services.
Strong supply chain help company to gain competitive advantage. Attract customers towards
working of organization. Improved supply chain help company to improve products quality.
Strong supply chain help company to establish their business at a large scale.
Control inventory
Both companies to reduce wastage of products and services maintain and control
inventory for their products and services. Material which is used by firm are unable to work
according to requirement and availability of organizational goals. Control inventory help

company to use all available resources effectively and able to meet goal (Gong, Greenwood and
Song, 2017.) . Maintaining inventory help Mercedes to achieve objectives easily.
Forecasting
Audi develop product according to requirement of market and demand of their customers.
Prepare schedule according to requirement of companies products. Forecasting is beneficial tool
to analyze customers wants and maintain their products according so that customers like to buy
it. Developing products and services according to customers wants help companies to achieve
goals.. It helps company in analyzing market demand.
Scheduling
BMW prepare schedule for launching their new product. It helps in attracting customers
easily. It supports in meeting the demand timely.
Quality
Quality products with effective technology help company to gain competitive advantage
(Mocker and Fonstad, 2017.) . Quality help to attract customers and retain them. Quality
products attract customers organization and require to maintain effectiveness and help to achieve
goals easily. Maintaining quality help in development of organization.
Facilities planning and management
Audi prepare proper plans for development of products to maintain effectiveness and
analyze availability of raw materials. Planning help company to manage all working and
establish for success of organization. Overall effectiveness of organizations goals and objectives
need to be achieved effectively and maintain abilities of all available employees in an
organization. Planning prepare an objective for business.
JIT
JIT is a manufacturing process that help to identify defects in overall working of
organization. It help company to reduce wastage and manage inventory in working of
organization (Hu and Yuan, 2018.). It help to maintain smooth working. Both Audi and BMW is
using JIT strategies for overall development of business. Maintain all efforts and working of
organization. JIT help company to increase inventory turnover and maintain effectiveness of
organization to meet goal and to attract customers.
Continuous improvement

JIT approach help Audi and BMW in identifying fault and improving things to raise
satisfaction level of consumers. Company analyze problems that affect their business and that
reduces overall value for their business. It is beneficial for company to reduce wastage of raw
materials. Company develops easy and simple method of working in their organization.
Maintains quality by analyzing each and every employee in organization. Quality control help to
ensure each and every worker will perform his duty effectively towards development of
organization at a large scale.
Eliminating waste
It help company to reduce waste of raw materials and other products in both companies.
Their strategy to reduce waste in one of the most important factor of their organization. Strategy
help Audi to reduce wastage of time by developing a proper plan and help to implement success
in their organization and work according to requirement. Control inventory help them to save
money and all important inputs for their business that help them to work effectively. Company
take orders after analyzing demand for their product which help them to save transportation cost
for their products.
Advantages
Just in time approach help Audi and BMW to minimize cost of stock. JIT help company
to maintain efficiency and quality to engage customers easily towards their product.
Disadvantages
JIT approach is unable to tolerate mistakes which make it difficult for company to work
properly for achievement of their goals and objectives. Unable to cope up with changes that
affect growth of business.

CONCLUSION
Operation management is basically the framework as well as process through
organizations plans, organizes as well as supervise the various activities as well as operations
like production, manufacturing etc. In short, it is predominately administration of the various
business practices for creating and building the great level of effectiveness and efficiency for
achieving the organizational goals and objectives. In order to increase the efficiency as well as
productivity of the operational processes, organizations mainly use a wide variety of tools and
techniques like lean manufacturing, bench-marking etc. This enables the organizations to reduce
the waste produced and hence increase their overall productivity. Besides this, it is essential to
raise the market share and tap a greater geographical area, organizations mainly use numerous
strategies like quality management, Just in time and many more. These eventually helps them to
increase the level of their quality and hence gain competitive advantage.

References
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