SO (strengths-opportunities) strategies aim to take advantage of external opportunities by using the firms major positive sides. If we are speaking about Mercedes-Benz, we may single out several directions in terms of marketing and production processes:
- The firm should launch a marketing campaign in China, emphasizing its reputable brand. There are several rationales for this policy. First, there is an emerging and expanding market in China as well as in other Asian countries (Law, 30). At present, it is not saturated with competitors, and the company will be able to find potential consumers. Moreover, Mercedes has always been famous for its excellence, both in terms of functional characteristics and design (Adler, 6). It should be borne in mind that Chinese car manufactures also try to raise their production standards, but at this stage, their vehicles cannot be compared to the cars, produced by Daimler. Therefore, some layers of the Chinese community would definitely take interest in these products. Additionally, Mercedes should implement this policy as soon as possible because other representatives of the automobile industry like Ford Motor Company, Audi also try to explore new Asian markets.
- The firm has to continuously improve the channels of distribution to Europe in order to maintain a competitive advantage. At present, the European market is occupied by a great number of European, American, or Japanese firms. Mercedes-Benz has already established a well-developed network of distribution but it is crucial that the firm constantly works in this direction.
- It is essential for Mercedes to invest in R&D (research and development), especially in such fields as alternative fuels. In the future automobile industry will have to adjust itself to new fuels (Law, 184; Domansky, 21). Nowadays it is primarily based on gas consumption. However, the situation may dramatically change in the next decades. Thus, a great number of models will be unsuitable for customers. The effects may be ruinous for many cars manufacturers; this is why Mercedes should be ready for any hypothetical changes.
- Additionally, the management should improve open more dealerships in Europe, Middle East, and China. They need to showcase mostly fuel cell cars. There are several reasons why this strategy should be implemented. First, there is a growing demand for more eco-friendly vehicles in these regions and Mercedes has developed several models which can suit customers needs (Daimler, 42). Nowadays, more and more people in the UK, Belgium, Swiss, etc are extremely concerned with ecological problems, arising due to global warming. Many of them can afford fuel cell cars.
- The management of the firm should use the increased profits to gain more ownership of Tesla Motors. Arguably, Tesla Motors is the only organization that develops and produces electric cars (Leitman & Brant, 67). In the long term, their models may enjoy considerable popularity. More likely, electric vehicles will become the only means of transportation. Overall, Daimler should establish close collaboration with Tesla Motors.
The main purpose of ST (strengths-threats) strategies is to use the companys strong sides to minimize probable external risks. It is possible to identify several tasks on which Mercedes-Benz will have to focus:
- The firm has to create more luxurious models based on the use of smart car technologies. The experience of Audi demonstrates that strong luxury positioning in the market can bring results and increase profitability. So, Mercedes may adopt some of their practices. On the whole, the company should create products for various layers of the population, for people with different income levels (Puchan, 42).
- Additionally, Mercedes needs to expand its smart car line. These models must be made more accessible to consumers. The new tendency shows that such vehicles are becoming more affordable, and their price gradually drops. As a result, the competition between leading companies like Mercedes, Ford, or Volvo becomes even more intense. To win this competition, Mercedes should create new products that better match the financial resources of the customers, who may be interested in purchasing smart cars (Puchan, 43).
- Unify emission standards. Currently, the governments of many countries impose rather strict restrictions on the number of gas emissions. Hence, it is sometimes difficult for Daimler to sell some of its vehicles. Apart from that, consumers may even be reluctant to buy cars that emit large amounts of gas into the atmosphere. During recent decades the level of their awareness has risen and they pay more and more attention to such criteria as eco-friendliness.
- Launch a new marketing campaign encouraging people to purchase the companys luxurious vehicles (T1, S1, or S3). Certainly, such a campaign is quite feasible especially in modern Germany as this country has gradually recovered after 2008 economic crisis.
- The firm should consider the acquisition suppliers for alternative fuel components to minimize the heft costs and establish new supply chain. In the future, the company would have to manufacture engines using alternative fuels. So, it is very much advisable that they purchase companies specializing in this area. Naturally, Mercedes works in this direction; however, the most cost-efficient method is to acquire the firm which has already proved its reputation in this field.
WO (weaknesses-opportunities) strategies are directed at improving internal weaknesses by using external opportunities. At present there are several ways to make company more effective:
- To reduce the number of employees who are on indefinite paid leave. Currently, this number is extremely large. Consequently, Mercedes has to incur significant expenses and these costs bring no dividends. However, the management should be very careful while delayering the personnel. Some of on-leave0 engineers may be highly-skilled professionals and Mercedes should not lose them.
- Develop new marketing strategy. This strategy has to touch on such aspects as product development, pricing, advertising, etc. The major objective is to extend Mercedes target audience.
- Use Tesla Motors to Increase the production of electric cars. As it has been noted before, Tesla Motors is the leading producer of electric cars. Yet, at first Mercedes has to gain more ownership in this firm.
The main goal of WT (weaknesses-Threats) strategies is to cope with internal problems of the enterprise and avoid external risks. Mercedes can make two important steps:
- Publish road tests about the reliability of lithium-ion batteries. The key issue is that they can ignite or even explode. Although such cases are very few, Mercedes is frequently criticized for the usage of this technology. This is why it is essential that the management proves that lithium-ion batteries are quite safe.
- Adapt already-existing business models to the changing conditions of global economy. This policy should include the change in production process, extension of supply chain, new marketing strategies, and increases role R&D.
Works Cited
Adler, D. Mercedes-Benz: 110 years of excellence. MotorBooks/MBI Publishing Company, 1995.
Adler, D. & Moss S. Mercedes-Benz: silver star century. MotorBooks/MBI Publishing Company, 2001.
Daimler. Official Website.
Daimler. “Innovation for Sustainable Mobility. Annual Report 2008”. Web.
Domansky, L.R. Automobile industry: current issues. Nova Publishers, 2006
Heike Puchan. “The Mercedes-Benz A-class crisis. ” Corporate Communications 6.1 (2001): 42. ABI/INFORM Global, ProQuest. Web.
Law. C. M. Restructuring the global automobile industry: national and regional impacts. Routledge, 1991.
Leitman. S. & Brant B. Build Your Own Electric Vehicle. McGraw-Hill Professional, 2008.
Larimer. F. Mercedes-Benz: buyer’s guide : roadsters, coupes, and convertibles. MotorBooks/MBI Publishing Company, 2004.