Reference no: EM132180930
Introduction - Automotive Industry (Mercedes Benz)
Mercedes Benz is a global manufacturer of luxury vehicles, buses, trucks and coaches; it is a subdivision of a Germany company Daimler AG and has its headquarters. It was founded in 1926 under the name Daimler AG by Karl Benz and Gottlieb Daimler (Kasi, 2017). Daimler’s strategy rests on four pillars, global presence, strong brands, broad product range and technology leadership. Mercedes Benz was ranked the 12th best band with the value of $ 28 billion, although it is not a mass production industry but it is premium band which explains a lot about them “Best or Nothing” as their products are quality and exclusive. It is one of the best brands in the automotive industry due to its customer satisfaction which in return beings customer loyalty. It has managed to stand its position in the automotive industry by continuously employing ways to manufacture environmental friendly products. Karl Benz acknowledges that his wife Bertha Benz was the one who was supporting him for him to be able to accomplish his dreams; she was the first person to ride his first automobile just as a gesture of support and love. When the company expanded it broke the sales records and its growth was not only due to the domestic interest but also the exports to foreign customers. Motorsport also helped to establish the name of Mercedes Benz as a luxury vehicle for sophisticated clients (Martin, 2015).
The Porter’s Five Models
Competitive Rivalry
It is undeniable that the automotive industry is extremely competitive and some of the competitors of Mercedes Benz are BMW, Audi, Lexus, and Volvo, Jaguar and Porche. All these brands offer their customers with luxuries and technical aspects that are unique for each brand. They compete through the performance of their product, their innovativeness and the competition on their prices has intensified too (Leruste, 2013). Due to massive competitiveness it is essential for Mercedes Benz to generate a perception of status, recognition, ambition, attainment and the success that is associated with owning a luxury premium vehicle. The competition is intensifying in developed countries as the industry is becoming saturated in recent years (Businessessays.net, 2016). One solution that branded companies use in order to differentiate themselves so that the competition can be less is to incorporate discounts and promotions in a way to lower down their prices without adjusting to the initial price that way they will win customers and later even if they return the original price they would have set the reputation of having better deals than their rivals.