Strategic management is analysed as formulation and implementation of important goals and initiatives that has been taken by management on the behalf of owners which is based on the consideration of resources and assessment of internal and external environments in which organisation is competing. Present report is based on analysis of Mercedes Benz group and its strategic management that provides overall direction to business enterprise and involves specification of objectives, policies and plan which are designed to achieve these objectives and allocation of resources in order to implement the plans (Hitt, Ireland and Hoskisson, 2012). Mercedes Benz group is major tour planner which is a company of opportunities for their customers and stakeholders and their employees. Further, company is manufacturer of luxurious and wide range of Vehicles with their brand name. They usually have strong brand position in automotive and achieved high profitability in market by providing quality of products and services to clients.
Their effective integrated model allows them to leverage the power of distribution in their own source markets and optimum clients volumes for their own assets. Further, their strategy is to offer differentiated and controlled products to attract target customer, drive demands in target markets and create entry barriers. Presently Mercedes Benz has strong financial position as they having a net income of around 15000 million and operating income of 20000 million (Hill, Jones and Schilling, 2014). The main competitors of organisation are analysed Volkswagen, Toyota, Audi in UK. There are various luvxurious vechile have been luanched by organisation in market to attract cutomer.
Analysis of organisation's strategic position using relevant KPIs
Key performance indicators are identified as measurable values which clearly demonstrates the ways through which company is effective achieving key business objectives. Large scale organisation use their KPIs for evaluation of success at reaching the targets. In this context, there are also some key performance indicators for Mercedes Benz have identified and use to analyse the strategic business position of organisation in market. Some of them are as follows:
- Profits: Most important performance indicator that clearly provides an analysis of company's financial position as compared. Moreover, shareholders of Mercedes Benz groups always analyse firms' annual report to analyse the profits that clearly defines its capabilities to sustain its position in market (Moutinho and Vargas-Sanchez, 2018). At present, Mercedes Benz has strong financial position in market in comparison to its competitors. Company is now analysed as market leaders in their automotive sector in terms financial strengths.
- Cost: It is also a n important KPI in which shareholders and investors measure the cost effectiveness of organisation and finds the best ways to reduce and manage the costs (Ginter, 2018). Mercedes Benz group has provided understanding that they have managed to cut its underlying cost.
- Customer lifetime value: In addition, minimizing the cost is not only the ways for customers acquisition. Further, CLV provides support to consider at the value Mercedes Benz is getting from along term customer (18 Key Performance Indicator (KPI), 2017). In this, organisation's position in industry have been identified through analysis of effective channels used by organisation to attract customers at best price.
- Customer acquisition cost: It is also important performance indicators which is analysed organisation' shareholder to demonstrate its effectiveness in earning high amount of profits in market. It is also considered as which is incurred by Mercedes Benz for attracting customers to buy its products and service (Wheelen and et.al., 2017). From sales forecast of company, it is analysed that Mercedes Benz customers acquisition cost has been decreased as they have applied new and innovation channels for promotion of their new Vechile in market.
- Customer satisfaction and retention: Increase in customers satisfaction and retention of previous customers towards the organisation also provide analysis firm's capabilities and potential in market as compared to its competitors. In this context, By providing quality products and services at competitive prices, Mercedes Benz has increased the satisfaction of its target customers and also provided some special continuously to retain its previous potential customers.
- Employee turnover rate: This KPIs is mainly an indicator of firm's effectiveness towards achievement of its objectives. Employees are analysed as strength of Mercedes Benz group as they provide support in accomplishment of various business objectives such as attracting customers, increasing in market, carrying out research. Increase in employee turnover rate determine weaknesses of organisation in managing its operations (Slack, 2015 and Davis, 2014). In this, it is analysed Mercedes Benz has implemented various monetary policies to motivate its employees and retain qualified employees at workplace. They are also following all the rules and regulation related to employment of organisation.
- Employee satisfaction: Satisfaction of employees towards organisation tends to provide a clear understanding about the effectiveness of organisation in market towards application of market avoidance (Meyer, Neck and Meeks, 2017). Employees in Mercedes Benz are highly satisfied with compensation policies and business operations of organisations.
Analysis of organisation strategic direction
Mercedes Benz is one of the largest tourer operator in the international touristy industry and this company aim to hold a strong business and portfolio in all parts of universe (Molina-Azorin, 2012). Mercedes Benz using these strategies become most successful in all over the world they use there policy, techniques, supplier and increase their market share and price as well. This company use Ansoff matrix for evaluate the growth of the businesses.
· It is referred to exiting product in existing market and this company main motive to achieve the growth with exiting product in their current market segments.
· It aims to increasing their share and improve product quality (Killen and et.al., 2012).
· If Mercedes Benz can introduce their package in the existing market they easily penetrate the market, this company earn more profit and cover its cost (Evans Stonehouse and Campbell, 2012).
1. This company focus to expand their businesses through its investors, suppliers and social media channels along with digital advertisement.
· These strategies are very helpful for reducing the risk of the businesses and government also giving this company relaxation to entry
· This company can't face any problems regarding to licensing and make a good relationship with foreign
· New product development strategy of business to commercial vechile and machinary equipments.
· They introduce their new product same market this company spent lot of money on advertising.
· They choose particular locations and directed reasonable packages (Alkhafaji and Nelson, 2013).
· They are Utilizing of excess productions and increase its product line stay in the market and increase its market share.
· This company direct connect with their customer online and sell their new product.
· The purpose of this company providing satisfied their target customer offering new and luxurious vechile as compard to competitors.
· This firm develop their new product and its target to raises existing market
Mercedes Benz will adopt new products developmen strategy for long term earning and it helps a businesses giving more opportunities or increasing the profitability in automotive sector. It is totally based on market share and market growth. It shows the high and low rate of the businesses and it provides graphic representations on this company.
The objective of this report is to analysis the critical position of Mercedes Benz GROUP by applying PESTLE Analysis.
Political factor includes Tax policies of government, it has moderate impact on the performance and growth of Mercedes Benz Group. Negative publicity and the risk of perception arrives is generated by political instability which influence the decision of clients and which result in unavoidable decrease in clients arrivals (Rothaermel, 2015). On the other hand, the financial condition is also affected by the terrorism which led to serious crises of Mercedes Benz Group.
Automotive is a growing company, the growth and employment has come strategic component of the world economy. Downward momentum has been seen due to Recession. By high level of fixed assert most of the Automotive operator were handicapped and were less able to manage the automotive industry and airlines. There is fluctuation in exchange rates, fuel cost and currency fluctuations. Primary Automotive sectors like lodging, restaurant, transportation and retail trade has most direct effect on economic environment of Mercedes Benz group.
It mainly refers to the perception and values of customers towards purchasing products and services that also effects the profitability of enterprise. Influene of social culture of business of organisation is positive as people are likely buy their products and services in market. Company have influence the perception of customers by providing quality of services at workplace.
For reservations and administrative operations for business, information technology has given boost to Automotive.
These are the environmental factors that needs to be complies by organisation for regulation of business operations effectively. Legislations related Emission and pollution also provided influence the business operations of organisation in market.
Critical evaluation organisation strategy
There are various important strategies have been adopted by organisation in order to achieve success in business operations. Implementation of these strategies will provide support to organisation in overcoming its weaknesses and reduce the impact of external factors on business operators (Lasserre, 2017). As it was clearly analysed that Mercedes Benz group has adopted the business strategy of diversifying its business operation in automotive and cruise business. Moreover, SAF framework of operation is applied for critical analysis of organisations strategy which involves three important business elements which are mentioned above:
- Suitability: This element of model clearly states that organisation will tend to its achieve success in business operations when the strategy which they have applied in their organisation is effective. Strategy of organisation is identified as suitable when its uses its strength, overcome its weaknesses and helps in accomplishment of strategies. In this context, New product development strategy is also considered as important business strategy which provides support to Mercedes Benz group in achievement of high profitability in market as compared to rivals but it also contains high risk and sometimes its tends to create situation of failure. Along with this, for New product development strategy of business in Machinaries and autmobile accessrioues manufacturing requires a lot of capital and resources. Moreover, strong financial position in Automotive industry and brand image is major strength of organisation which provides them support in New product development strategy of business.
- Acceptability: It is also important element of model which clearly implies that firm's strategy tends to be successful in market when its accepted by its stakeholders. Stakeholders are key player which possess their major impact on business operations of organisations (Keupp, Palmié and Gassmann, 2012). Organisation can aslso makes collboration with other autmobile parts manufacturers. They will also focus on New product development strategy of their portfolio geographically through growing their Australia and Asian countries , while also strengthening their core destination in Europe. Moreover, it is clear identified that stakeholder will provide their acceptance towards strategies when they will find the best return on investments and facilities.
- Feasibility: It is clearly determines the availability of resources for implementation of strategy. For New product development strategy of business operations there are major requirements of Mercedes Benz to have Adequate financial resources which provide them support in carrying business activities (Ward, 2012). From internal business analysis, it is identified that firms has strong financial position in market with an aim of getting major financial position in market. Along with this, it is also essential for organisation to have adequate human resource to performs business functions for New product development strategy of business (Priem, and Carr, 2012). From the analysis, analysis of it is clearly identified that organisation needs to adopted various important business strategies to carry out various business expenses and promotion of various important strategies to increase the market position and achievement. They also need to adopt important business strategies and hire qualified candidates which provide them support in accomplishment of objectives.
In this report, it is concluded that strategic management play an important role in providing success to the organisation in international market. Mercedes Benz groups is an international Automotive service providers and now its has diversified its business operations in and Automotive sector to promote the business operations. Mercedes Benz group is major tour planner which is a company of opportunities for their customers and stakeholders and their employees Mercedes Benz has strong financial position in market in comparison to its competitors. CLV provides support to consider at the value Mercedes Benz is getting from along term customer. Mercedes Benz customers acquisition cost has been decreased as they have applied new and innovation channels for promotion of their products and services in market. Increase in employee turnover rate determine weaknesses of organisation in managing its operations. Employees in Mercedes Benz are highly satisfied with compensation policies and business operations of organisations.
From the analysis of organisation financial position it is analysed it will tend to achieve group of around 4 percent in their business operations. While adopting New product development strategy strategy, it is essential for organisation to have support of stakeholders. Therefore, it is essential for organisation to analyse the interest of their stakeholders towards business operations and try to satisfy their expectation for achievement of contiguous support. Mercedes Benz also needs to provide their focus on increasing the profitability and its position in market. For achievement of success in business operations , it is essential for organization to deliver high quality products and service to attract its target customers. Along with this, they also adopt effective and new marketing techniques for increasing their brand image in diversified market.
- Alkhafaji, A. and Nelson, R.A., 2013. Strategic management: formulation, implementation, and control in a dynamic environment. Routledge.
- Evans, N., Stonehouse, G. and Campbell, D., 2012. Strategic management for travel and Automotive. Taylor & Francis.
- Ginter, P.M., 2018. The strategic management of health care organizations. John Wiley & Sons.
- Goetsch, D.L. and Davis, S.B., 2014. Quality management for organizational excellence. Upper Saddle River, NJ: pearson.
- Hill, C.W., Jones, G.R. and Schilling, M.A., 2014. Strategic management: theory: an integrated approach. Cengage Learning.
- Hitt, M.A., Ireland, R.D. and Hoskisson, R.E., 2012. Strategic management cases: competitiveness and globalization. Cengage Learning.
- Keupp, M.M., Palmié, M. and Gassmann, O., 2012. The strategic management of innovation: A systematic review and paths for future research. International Journal of Management Reviews, 14(4), pp.367-390.
- Killen, C.P., Jugdev, K., Drouin, N. and Petit, Y., 2012. Advancing project and portfolio management research: Applying strategic management theories. International Journal of Project Management, 30(5), pp.525-538.
- Lasserre, P., 2017. Global strategic management. Palgrave.
- Meyer, G.D., Neck, H.M. and Meeks, M.D., 2017. The entrepreneurshipâ€strategic management interface. Strategic entrepreneurship: Creating a new mindset, pp.17-44.
- Molina-Azorin, J.F., 2012. Mixed methods research in strategic management: Impact and applications. Organizational Research Methods, 15(1), pp.33-56.
- Moutinho, L. and Vargas-Sanchez, A. eds., 2018. Strategic Management in Automotive, CABI Automotive Texts. Cabi.
- Priem, R.L., Li, S. and Carr, J.C., 2012. Insights and new directions from demand-side approaches to technology innovation, entrepreneurship, and strategic management research. Journal of management, 38(1), pp.346-374.
- Rothaermel, F.T., 2015. Strategic management. McGraw-Hill Education.
- Slack, N., 2015. Operations strategy. John Wiley & Sons, Ltd.
- Ward, K., 2012. Strategic management accounting. Routledge.
- Wheelen, T.L., Hunger, J.D., Hoffman, A.N. and Bamford, C.E., 2017. Strategic management and business policy. pearson.