Introduction to Business Operations and Services


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Question :

This assessment will cover the following questions:

  • Evaluate how you would introduce a companywide operations improvement strategy. This improvement strategy must include the tools and techniques that you have learned in this moduleUGB 165.
  • Mercedes Benz is the luxury car company. Provide guidance on the operational strategies that Audi and BMW can implement to gain market share from Mercedes-Benz.
Answer :
Organization Selected : Mercedes-Benz


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

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


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.


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.


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.


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.


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.


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 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.


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.


BMW prepare schedule for launching their new product. It helps in attracting customers easily. It supports in meeting the demand timely.


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 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.

Also Read :- Challanges of a Company In Internal And External Environment


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.


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.


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.

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