#2 PRESENTATION

COMPETITORS ANALYSIS OF MERCEDES BENZ

COMPETITIVE PROFILE MATRIX

PORTER’S 5 FORCES ANALYSIS

PESTEL ANALYSIS

OPPORTUNITIES & THREAT

EXTERNAL FACTOR EVALUATION

THIS #2 PRESNTATION WILL FOCUS ON THE INTERNAL ASSESMNET AND EVALUATION OF THE
COMPANY

The Resource-Based View (RBV) https://www.essay48.com/case/34457-

Mercedes-Benz-Dealership-Resource-Based-View

The RBV
categorizes resources available to the firm broadly as being tangible or intangible in
nature.

2. Tangible resources

Tangible resources include those resources that are physical in nature and can be
easily identified by the organization and competitors. Moreover, these resources can
#2 PRESENTATION

easily be brought from the market, or developed in the long run. Based on this fact,
where competitors may acquire identical, or similar resources In the future, they
provide little to negligible competitive advantage to the company.

Tangible resources available at Mercedes Benz Dealership include, for example:

2.1. Land

The land is a tangible resource for Mercedes Benz Dealership which includes all
spaces owned and rented by the company for purposes of hosting production units
as well as for warehousing purposes. Additionally, all units owned or rented by the
company for purposes of packaging are also included to be tangible resources under
the land.

2.2. Equipment

For Mercedes Benz Dealership, equipment is also a tangible resource that includes
all the equipment owned by the company for purposes of production and packaging,
as well as other operational purposes. In this manner, all technological
advancements, and technological integration for improving processes and
operations may also be seen as an extension of equipment that the company
employs to enhance its product line, and incorporate economies of scale.

2.3. Materials

Materials include all the raw materials and other packaging materials that Mercedes
Benz Dealership uses for the successful production and packaging of its products.
The materials are tangible in nature, and may also easily be accessed by the
competitor players for their own production processes and other purposes.

2.4. Supplies

Mercedes Benz Dealership, supplies is also a tangible resource and include all
materials and products that are used and needed for supporting the packaging and
production functions of the company. Supplies also include all products and
#2 PRESENTATION

supporting materials that are needed by other functions in the Mercedes Benz
Dealership for the successful attainment of business goals and targets.

2.5. Facilities

Facilities are also a tangible resource that is visibly identifiable by competing players
with respect to Mercedes Benz Dealership. The facilities include all the production
units, warehouses, offices and supporting buildings and functions for the company
which help it in streamlining its processes and operations, and also lead to
successful performance. Facilities also include the interior design and interiors of
buildings at Mercedes Benz Dealership – designed for optimizing performance and
maintaining brand image.

2.6. Infrastructure

This includes all the land and facilities in terms of technology, buildings, office
materials and maintenance, and allocation of power resources such as electricity to
its plants by Mercedes Benz Dealership. The infrastructural buildup is an important
resource for the company for ensuring high performance, and ease of operations for
the company. However, like other tangible resources, it may be accessed easily by
competing players – who may develop similar resources for their own products and
functions in the future. 

3. Intangible resources

Intangible resources refer to those resources that have no physical value but are still
owned and possessed by organizations such as Mercedes Benz Dealership.
Competing players are more than often unable to purchase, or acquire the intangible
resources available to Mercedes Benz Dealership because of associated factors and
aspects of historical uniqueness, causal ambiguity, and social complexity. Intangible
resources are largely inimitable and likely to stay within the organization over the
long run as well, and thus form the basis of competitive advantage for Mercedes
Benz Dealership. The intangible resources for Mercedes Benz Dealership are also
#2 PRESENTATION

seen to be a 9source of the firm’s success because they are not easily replicated in
factor markets by competing players. For Mercedes Benz Dealership, some
intangible resources include, for example: 

3.1. Brand reputation

Brand reputation for Mercedes Benz Dealership is built over historical uniqueness
where the brand has worked hard to provide high-quality products and earn
consumer trust over decades. The company’s brand reputation – based on its
organizational culture and unique relation with customers –can not be imitated by
the competitors, and may become a source of competitive advantage.

3.2. Intellectual property

Mercedes Benz Dealership’s production processes and its product uniqueness is

safeguarded by intellectual property rights which prevent other competing players
from copying or having access to its unique product blend, and product ingredients
and inputs. This ensures novelty to Mercedes Benz Dealership and makes its
products inimitable for competing players.

3.3. Patents and Copyright

Mercedes Benz Dealership enjoys patents and copyrights not only for its production
processes and product composition but also for research and development activities
that it undertakes for product improvement and enhancement. These patents and
copyrights protect Mercedes Benz Dealership against potential encroachments or
imitation.

3.4. Goodwill

The goodwill for Mercedes Benz Dealership is again developed through historical
uniqueness where the brand’s reputation and customer experience have allowed the
development of long-standing goodwill for the company. This, In turn, has enhanced
the overall brand equity for Mercedes Benz Dealership. The goodwill for the company
has developed over a long period of time through continuous hard work by the
Mercedes Benz Dealership brand, and cannot be copied by the competing players.
#2 PRESENTATION

3.5. Trade names

The trade name is also an intangible resource for the company as other players
cannot adopt or imitate this name. The trade name is recognizable by the customers,
and provide instant recognition for the company across borders. The trade name
also communicates the brand promise and values to customers globally and is a
source of competitive advantage for the company.

3.6. Customer experience

Mercedes Benz Dealership provides a unique customer experience to its customers

through its brand activities, and offerings – as well as marketing activities. Though
marketing activities may be copied by competing players, the strategic direction and
intent with which the customer experience and brand activities are planned is
inimitable and prides a unique source of competitive advantage to Mercedes Benz
Dealership.

3.7. Patented technology, computer software, databases and trade

secrets 

Mercedes Benz Dealership is also successful in its operations and businesses and
has a large customer following that is loyal and does repetitive purchasing because
of its trade secrets – which also comprises of having a secret recipe for product
competition. Mercedes Benz Dealership also regularly develops and incorporates
advanced technology that is developed internally and is thus patented. This includes
hardware and software for improving the company’s operational [processes, and as
such, provide an edge to the business in factor markets. 

3.8. Video and audiovisual material (e.g. Motion pictures, television

programs)

All marketing content, and video and audio-video material designed, developed,
launched, and released by Mercedes Benz Dealership is also an intangible resource.
Though this marketing content has little physical value, it contributes towards brand
building for Mercedes Benz Dealership and works towards increasing brand
awareness, brand recognition, and overall brand equity. Since this material is guided
#2 PRESENTATION

by a broader arching business and marketing strategy, the marketing content

developed by Mercedes Benz Dealership is inimitable by players in factor markets.

3.9. Customer lists 

Mercedes Benz Dealership has a variety of different product lines and product
offerings for different target groups and target consumer markets. Moreover, the
company operates internationally and has consumer markets in over 100 countries.
Based on this, it is safe to state that Mercedes Benz Dealership has developed
unique customer markets – that share similar characteristics – in different
countries. Moreover, this customer market comprises of different consumer groups
and categories. As such, Mercedes Benz Dealership has unique customer lists in
different countries, and this can’t be imitated largely because of social ambiguity
attached.

3.10. Licensing, royalty and standstill agreements 

Mercedes Benz Dealership has developed unique licensing, royalty and standstill
agreements over time in the different consumer markets it operates. These have
been developed strategically over time through continuously consistent and
successful performance by the company, and because of brand development from
functional to emotional to lifestyle in nature. Based on this progress of the brand,
and brand characteristics, along with strategic leadership and vision – Mercedes
Benz Dealership has been able to develop inimitable licensing, royalty, and standstill
agreements that allow its competitive positioning in factor markets.

3.11. Import quotas 

Mercedes Benz Dealership has developed strategic contracts with different

countries for import quotas. These quotas include not only the final packaged
products but also unique raw materials and its import in different countries for
supporting the business processes. As such, the defined import quotas cannot be
imitated by other companies since they are based on the unique position of The
Mercedes Benz Dealership and its strategic direction.

3.12. Franchise agreements 

#2 PRESENTATION

Mercedes Benz Dealership has unique franchise agreements with reliable partners in
different companies for production as well as for distribution and sale purposes.
This has allowed the company access to different markets while safeguarding it
culturally and financially against potential risks. The franchising agreements are also
intangible in nature and based on unique, trustworthy relationships upheld by
Mercedes Benz Dealership. 

3.13. Customer and supplier relationships (including customer lists) 

Mercedes Benz Dealership has unique customer and supplier relationships. The
customer and supplier relationships have developed over time through consistent
behaviour, trust-building, and transparency in operations and intent. The strong
customer and supplier relationships help Mercedes Benz Dealership informing global
networks that are well managed, and smoothly undertaken – and largely inimitable
by competitors in the immediate future.

3.14. Marketing rights

The company’s marketing rights in different countries are based on strategic

leadership and strategic direction, as well as the company’s legal compliance and
history. This cannot be imitated by other players, and cannot be acquired by them as
well. This is because Mercedes Benz Dealership has developed them over time, and
through stringent processes and means – allowing it a unique standing over other
players in competing markets. 

4. Heterogeneous and immobile characteristics of

resources

The RBV for firms holds that all resources possessed, controlled and owned by
organizations have two core characteristics – of heterogeneity and immobility. 

4.1. Heterogeneity
#2 PRESENTATION

Under heterogeneity, the RBV assumes that resources based on skills and
capabilities – for example in the form of human resource activities, training, and
talent, varies from company to company. This variation is important for avoiding the
building of characteristics of perfect competition. As such, with heterogeneity, the
RBV assumes that each organization has a different amount and mix of resources –
which lead to different strategic directions and strategic choices to them – under
similar external pressures and conditions. 

This means that the strategic decision and choice undertaken by Mercedes Benz
Dealership will differ substantially from its competition under similar external
environmental pressures based on the different mix of resources available to the
company. This assumption of heterogeneity under RBV allows Mercedes Benz
Dealership to complete product and outperform the competition in facto markets,
and also achieve competitive advantage through its use of unique resource bundles
and mixes. 

4.2. Immobility

Under the assumption of immobility, the RBV assumes that resources available to
the firm are not mobile, and cannot be transferred from one organization to another
– in the short run at the least. Based on this notion of immobility in the short run, the
RBV assumes that rival companies are unable to imitate, and replicate resources
available to Mercedes Benz Dealership, and devise and implement strategies and
decisions similar to that of Mercedes Benz Dealership. Intangible resources are
largely immobile in nature. 

All intangible resources available to Mercedes Benz Dealership are heterogeneous

and immobile in nature at large. The tangible resources are also immobile in nature
in the short run for Mercedes Benz Dealership and maybe homogeneous to the
player in the factor markets depending on the advancement, and strategic
developments of competing players. 

5. VRIO analysis
#2 PRESENTATION

The characteristics of heterogeneity and immobility are not sufficient for Mercedes
Benz Dealership in using resources to develop a competitive advantage. To
determine if resources can be used and enhanced to develop a competitive
advantage in the long run with sustainability, it is important that resources identified
for the company to fulfill the VRIO criteria.

Resource Valuable Rare Inimitabl Organized Advantage

e
Land Y N N Y Competitive parity
Equipment Y N N Y Competitive parity
Materials Y N N Y Competitive parity
Supplies Y N N Y Competitive parity
Infrastructure Y N N Y Competitive parity
Facilities Y N N Y Competitive parity
Brand reputation Y Y Y Y Competitive
advantage
Intellectual property Y Y Y Y Competitive
advantage
Patents and copyrights Y Y Y Y Competitive
advantage
Goodwill Y Y Y Y Competitive
advantage
Trade names Y Y Y Y Competitive
advantage
Customer experience Y Y Y Y Competitive
advantage
Patented technology, computer Y Y Y Y Competitive
software, databases and trade advantage
secrets
Video and audio-visual material Y Y N Y Temporary
competitive
advantage
Licensing, royalty and standstill Y Y N Y Temporary
agreements competitive
advantage
#2 PRESENTATION

Customer lists Y Y Y Y Competitive

advantage
Import quotas Y Y N Y Temporary
competitive
advantage
Franchise agreements Y Y N Y Temporary
competitive
advantage
Customer and supplier relationships Y Y N Y Temporary
competitive
advantage
Marketing rights Y Y N Y Temporary
competitive
advantage
HRM skills Y Y Y Y Competitive
advantage
Integrating Strategy and Culture https://www.essay48.com/13619-
Mercedes-Benz-Organizational-Culture

The foundations of the work are built on four corporate values:

• Respect: “We show respect for our employees, customers and business
partners.”

• Passion: “Our passion allows us to do our best every day; it is the basis of
our success. “

• Discipline: “For us, discipline means taking on challenges and achieving

goals, taking into account different interests.”

• Integrity: “Integrity makes us successful in the long run and contributes

to a functioning society”.

Organizational culture

One of the core values - integrity, is a central part of their organizational

culture.
#2 PRESENTATION

The values listed above are the basis for the organizational values of all
Daimler Group companies. They have been set out in the Integrity Code.
This is based on a shared understanding of the values they have developed
with the employees and sets out the principles that must underpin their
daily conduct. These principles include respect for the law and rights,
honesty, responsibility, mutual respect, openness, and transparency. These
guidelines help employees make the right ethical decisions in difficult
business situations.

Even in cooperation with business partners, the crucial requirement is

integrity. Their booklet Ethical Business: Our Business Partner
Expectations outlines the ethical principles and related expectations of
their business partners, which is intended for all business partners around
the world and should help raise awareness of the integrity and business
ethics of the business.

1. Organizational culture

The organizational culture represents the specific pre-defined policies that provide
guidance to the employees and give a sense of direction. It is a complex system that
comprises the shared beliefs, values and assumptions, and governs the employees’
behavior within the organization. These underlying assumptions, beliefs and values
contribute to the unique and distinct psychological and social environment. In this
article, the organizational culture of the Mercedes-Benz is analyzed in light of
Hofsetede’s organizational culture model.

2. Organizational culture of Mercedes-Benz

The vision statement of Mercedes-Benz is brief and to the point. This means that the
company has not used long dialects and dialogues to delivers its opinion ad stance
to the public and relevant stakeholders. The vision statement should be brief and
comprehensive – it should communicate the essence of the business, and its future
plans to help the stakeholders understand its business philosophy and business
strategy.
#2 PRESENTATION

3. Three levels of organizational culture

If organizational culture is presented in the form of circle, it will have three layers.
The outermost will be artefacts, middle will be the values and beliefs and inner most
will be the underlying assumptions. Coca-Cola’s organizational culture is its
strongest asset, and can be analyzed on three levels:

3.1 Artefacts of Mercedes-Benz’s organizational culture

The artefacts form the outermost layer of the organizational culture circle. The
artefacts are the tangible and visible aspects of the Mercedes-Benz’s organizational
culture. Some examples of the artefacts are- open door policy, office layout and
official dress code for the employees. The cultural artefacts of the Mercedes-Benz
are easily observable by the outside world, however they are hard to interpret.

3.2 Values within the Mercedes-Benz’s organizational culture

The core values are not easily observable. The Mercedes-Benz’s core values are the
shared goals, principles and standards. These core values are accountability,
diversity, quality, collaboration, passion, integrity and leadership. The Mercedes-Benz
management understands the importance of communicating the core values so that
each employee could accept and modify the behavior accordingly.

3.3 Assumptions within the Mercedes-Benz’s organizational culture

Assumptions are deeply embedded ideologies and philosophies and provide the
foundation to the Mercedes-Benz’s organizational culture. Employees generally
remain unaware of these underlying assumptions, yet they play an important role in
formulation of core values and visible behaviors.

4. Why it is important to understand the organizational

culture?

It is important to understand the organizational culture because in today’s

competitive business environment, the organizational culture plays an important role
in gaining the competitive advantage. The organizational culture of Mercedes-Benz
#2 PRESENTATION

makes sure that all employees share the common purpose and it is well aligned with
the broader organizational purpose. The explicit alignment of the behaviors, goals
and deeply rooted philosophies enable the Mercedes-Benz’s employees to put their
efforts in right direction, give best performance and ensure strong commitment with
the organization.

Main reasons for understanding the organizational culture are:

 It may act as a strategic tool for understanding the Mercedes-Benz’s

willingness to change,
 It shows how employees’ relate to the Mercedes-Benz’s work culture.
 It may help Mercedes-Benz in identifying the possible gaps between actual
and desired work culture.

5. Organizational culture in light of Hofstede model

The organizational culture model proposed by the Hofsetede holds the seminal
importance as it has been frequently applied by analysts to analyze the
organizational culture of any company. Mercedes-Benz’s organizational culture can
also be analyzed in light of Hofseted’s cultural model. The model has six
dimensions, as listed below:

 Means oriented versus goals oriented

 Internally driven versus externally driven
 Easy going work discipline versus the strict work discipline
 Local versus Professional organizational culture
 Open system versus the closed system
 Employee orientation versus work orientation

In next section, each individual organizational cultural dimension is discussed in

detail and related to the Mercedes-Benz.

5.1 Dimension 1: Means oriented versus goals oriented

5.1.1 What is Mean orientation and Goal orientation?

#2 PRESENTATION

A highly mean oriented organizational culture emphasizes over ‘how’ the work is
carried out, while, the goal oriented culture emphasizes over the results and focus on
‘what’ can be achieved. The mean orientation reflects the people’s risk avoidance
behavior, while the goal orientation shows that people’s risk orientation as they
remain willing to achieve the desired results even if they involve certain risks.

5.1.2 Analysis of Mercedes-Benz

The Mercedes-Benz has successfully attained the right balance between the mean
and goal orientation, as it emphasizes over the importance of accomplishing the
goals, and meanwhile encourage employees to take risks only if they are worthwhile.

 By focusing on the mean orientation, Mercedes-Benz ensures that the

employees must adopt the ethical and integrate ways for accomplishing the
assigned goals because it considers the integrity as its core value. In this way,
employees are encouraged to only promote the healthy competition.
 By focusing on the goal orientation, Mercedes-Benz encourages its
employees to put their best efforts for accomplishing the assigned goals.
Employees are not punished for sharing new ideas and taking risks. In this
way, Mercedes-Benz has successfully reduced the fear of failure from its
employees.

The analysis suggests that the successful organizations like Mercedes-Benz intend
to find the right equilibrium position on the mean and goal orientation continuum.

5.2 Dimension 2: Internally driven versus externally driven

5.2.1 What is an Internally driven and externally driven culture?

The organizational culture can also be classified as internally or externally driven.

 An internally driven organizational culture reflects the employees’ overall

perceptions about their expertise and knowledge. In an organization with
highly internally driven organizational culture, the employees believe that they
know the explicit and implicit needs of customers and act accordingly. The
internally driven organizations place high importance to the ethics and
#2 PRESENTATION

integrity, and they do not compromise over these values to achieve the
desired results.
 On the opposite end, the organizations with externally driven culture tend to
focus on the results and employees in such organization believe that meeting
the customers’ demands is more important than business ethics.
Consequently, they adopt a more pragmatic rather ethical attitude.
 5.2.2 Analysis of Mercedes-Benz
 The Mercedes-Benz’s organizational culture is more internally than externally
driven. Despite ensuring a quick response to the changing customer needs,
the top management openly communicates the importance of adopting an
ethical attitude while responding to the market needs. The company shares
strong commitment to embedding ethics and integrity into its business
operations. The internally driven organizational culture has enabled the
organization to use its ethical brand image as a tool to get a strong
competitive edge over rival firms.

5.3 Dimension 3: Easy going work discipline versus the strict work discipline
5.3.1 What is an Easy going work discipline and the strict work discipline?

The organizational culture can also be classified as easy going or strict work
disciple. This cultural dimension denotes the extent to which the organization is
internally structured, controlled and disciplined.

 Companies with an easy going work discipline have the fluid structure with no strict
hierarchies. The culture lacks the certainty and management can only exert a limited
control to ensure the discipline. Such organizational culture is deemed favorable for
promoting a creative and innovative work attitude.
 On the other hand, the companies with a strict work discipline tend to have strict
hierarchies with high certainty. Management exerts the strong control and
employees work in a disciplined work environment with serious attitude.

5.3.2 Analysis of Mercedes-Benz

The analysis of the Mercedes-Benz’s organizational culture reveals that the company
is more closely related to the disciplined work culture with vertical hierarchy and tall
#2 PRESENTATION

structure. It means the management withholds the decision making authority, and
directly controls the employees’ work behavior. The creative and innovative work
behaviors are promoted by rewarding the employees with various monetary and non-
monetary rewards, but the empowerment and autonomy is limited due to
organizations’ inclination towards the strict work discipline.

However, in response to the employees’ growing need for autonomy and

empowerment, the management has decided to make a gradual shift from the
centralized to decentralized organizational structure. This shift will transfer some
authority from top to the bottom, and consequently, the organization will attain a new
equilibrium between strict and fluid structure.

5.4 Dimension 4: Local versus Professional organizational culture

5.4.1 What is Local and Professional organizational culture?

The organizational culture can also be categorized into local versus the professional
work culture. This cultural dimension denotes the employees’ identification with
either the boss/work unit or their profession.

 In companies with a high degree local culture, the employees tend to identify
themselves with their organizational units, teammates/colleagues or their
bosses. The focus remains internal and short-term and employees have high
desire for association and relatedness to the people around them. The strong
social control obliges the organizational members to behave alike each other.
 On the opposite side, in companies with a high degree professional culture,
the employees tend to identify themselves with their profession or work
content. They do not desire to behave alike others and have an external and
long-term focus.

5.4.2 Analysis of Mercedes-Benz

In case of Mercedes-Benz, the company promotes a professional attitude among its

employees. There is no obligation to behave in a particular way. At Mercedes-Benz,
the diversity is promoted and differences are appreciated. It is done to leverage the
opportunities offered by such constructive differences. The Mercedes-Benz’s
#2 PRESENTATION

example shows the importance of cultivating a professional organizational culture to

remain successful in a highly diversified environment.

5.5 Dimension 5: Open system versus the closed system

5.5.1 What is open system and closed system culture?

The open versus the closed system dimension denotes the organizations’
accessibility and overall communication climate.

 Organizations with open system tend to welcome the new employees and
create an inclusive work culture in which employees from different
demographic backgrounds can adjust easily. The organization keeps its door
open to the outsiders and integrates the flexibility so that everyone can fit into
it. Such organizations value the diversity and integrate it into their business
practices.
 On the other hand, the organizations with closed-system tend to make it
difficult for newcomers to adjust and develop relatedness. People in such
organizations are generally exclusive and diversity is discouraged as only
certain kinds of individuals are encouraged to join and fit well in the
organization.

5.5.2 Analysis of Mercedes-Benz

The analysis of the Mercedes-Benz’s organizational culture shows that the company
has a clear inclination towards the open side. In Mercedes-Benz, there are open
communication lines and the organizational culture is flexible and well-diversified.
The competitive advantage of the Mercedes-Benz also lies in its ability to manage a
highly diversified workforce.

The open cultural system has enabled the Mercedes-Benz to ensure a high
information flow and leverage the knowledge, skills and competencies of employees
from diversified backgrounds. Both these factors are considered important by the
multinational organizations like Mercedes-Benz to timely respond to the changing
customers’ needs in different geographic areas.
#2 PRESENTATION

5.6 Dimension 6: Employee orientation versus work orientation

5.6.1 What is employee orientation and work orientation?

The employee and work orientation reflects the management’s philosophy,

prioritization and an overall orientation towards either employee welfare or the
accomplishment of work goals.

 An organization with a clear employee orientation reflects the management’s

philosophy of putting the employees ahead of customers and shareholders. It
is the management philosophy and shares the high relatedness to
contemporary era in which the human capital has gained the strategic
importance.
 In an extremely work oriented culture, the organizations tend to put excessive
pressure on the staff and heavy emphasis is put on maximizing the task
performance, even if it comes at the cost of the broader employee welfare.

5.6.2 Analysis of Mercedes-Benz

The Mercedes-Benz management truly understands the value of its human capital,
and hence prioritizes the employee satisfaction and motivation. Although,
employees are assigned with the challenging goals, the management takes care of
their concerns and avoids pressurizing them that may lead the employees towards
burnout. The equilibrium between the task and employee orientation is attained by:

 Assigning the challenging goals and offering rewards to maximize the task
performance
 Providing employees with necessary coaching, mentoring and guidance to
accomplished the assigned goals
 Discouraging the employees from making overtime a common norm in the
workplace.
 Motivating and training the employees to manage the stress and time, which
is important for both- improving the task performance, and improving the
psychological well-being.

6. Overall analysis
#2 PRESENTATION

The overall analysis suggests that these individual cultural dimensions also interact
with each other. For example, the Mercedes-Benz tends to balance its means
orientation and goal orientation, and shares a closer inclination to the mean
orientation, which is interconnected with its inclination towards the internally driven
dimension. Both these dimensions emphasize over the ethics and integrity, and
inclination towards one dimension (e.g. mean orientation) automatically predicts the
organization cultures’ inclination towards second dimension (e.g. internally driven
culture).

7. Hofstede organizational culture model- strengths

and limitations

The Mercedes-Benz’s organizational culture is analyzed in light of Hofstede’s

organizational culture model. However, the model has certain limitations that must
be considered when applying this model to understand the culture of any
organization:

 The organizational culture is broad and complex, and cannot be fully

assessed based on a few dimensions.
 These cultural dimensions are obtained by surveying the 20 units of 10
different business organizations. The close-ended survey responses may not
be detailed enough to give an insightful information about a company’s
culture.
 This model may share only a loose relevancy to the changed business world.

Despite these limitations, the cultural model is still applied by the analysts for
following reasons:

 The model is based on the rigorous research design, which means the
extensive research is conducted to identify these dimensions.
 The model is believed to have a high relative accuracy as most of the
researchers who applied this model offered the consistent results.
 The model is simple and easy to understand, which makes the analysis of
organizational culture easier for the general public.
#2 PRESENTATION

8. Conclusion

The analysis of the Mercedes-Benz’s organizational culture shows that the

successful business organizations do not adopt an extreme cultural orientation, but
try to find the right equilibrium to develop the effective culture. Mercedes-Benz has
successfully created a strong organizational culture that is deeply embedded and
widely accepted by its highly diversified workforce.

When an organization successfully creates the alignment between its structure,

culture and business strategies, and understands the complex association between
underlying assumptions, core values and observable behaviors, it can then use the
organizational culture as a tool to gain strategic benefits. Organizations with strong
work culture secure their position in the hypercompetitive market, and Mercedes-
Benz is an example of it.

https://www.mbaskool.com/marketing-mix/products/16988-mercedes-benz.html
Marketing Strategy of Mercedes Benz analyses the brand with the marketing mix
framework which covers the 4Ps (Product, Price, Place, Promotion). There are
several marketing strategies like product innovation, pricing approach, promotion
planning etc. These business strategies, based on Mercedes Benz marketing mix,
help the brand succeed.
Mercedes Benz marketing strategy helps the brand/company to position itself
competitively in the market and achieve its business goals & objectives.
Let us start the Mercedes Benz Marketing Strategy & Mix to understand its product,
pricing, advertising & distribution strategies:
Mercedes Benz Product Strategy:
The product strategy and mix in Mercedes Benz marketing strategy can be explained
as follows:
Mercedes Benz is one of the leading premium car brands in the world. One of the
strongest points of Mercedes is its products. Mercedes Benz has a wide range of
passenger cars, light commercial and heavy equipment vehicles as a part of its
marketing mix product strategy. However, the strongest in its product portfolio will be
the luxury car segment which consists of Sedans, SUVs and sports cars as well. In
the new generation segment, it has A-class, B-class and the CLA. In the sedan, it
boasts of the E-class, C-class and S-class. Mercedes Benz also has a wide range of
cabriolets and roadsters in its product portfolio while it has the GLA, GLE, GLC and
GLS in the SUV sector. Also the Mercedes Maybach S class is a true essence of
luxury in its own. The Mercedes can boast about its products as not only it has the
best of design and luxury but also the best of technology. The 4matic and BlueTEC
is one of the best technologies till date. Also apart from dealing with new cars,
Mercedes also deals with pre-owned Mercedes through its Mercedes Benz certified
#2 PRESENTATION

portfolio. By 2022, the company is focusing on investing $11bn for having electric &
hybrid cars in the market.

Mercedes Benz Price/Pricing Strategy:

Below is the pricing strategy in Mercedes Benz marketing strategy:
Mercedes Benz is a premium priced luxury car brand.
Being in the luxury segment, it caters to a niche segment who value quality more
than the price and so the price is always on the higher end. In the overseas market
where Mercedes Benz have a huge product variety available, the prices range from
$30,000 to $100,000 and above. Primarily it caters only to the luxury car market, and
hence it invests a lot on high cost materials. Thus, the Mercedes Benz marketing mix
pricing strategy is that of premium pricing, based on its features and competition.

Mercedes Benz Place & Distribution Strategy:

Following is the distribution strategy in the Mercedes Benz marketing mix:
Mercedes Benz cars are present all across the world. Mercedes caters to a number
of countries worldwide, with its dealerships and service stations present across
various countries. The major markets are China, Asia pacific, Europe, Germany,
North America etc. A global reach shows the strong place & distribution strategy in
the marketing mix of Mercedes Benz. Mercedes has hundreds of dealerships across
the major metros and cities globally. It has its factories and plants set all across the
world in Asia, North America, South America, Africa, Europe etc.
Mercedes has its factories present in Germany, South Africa, India, France, Brazil,
USA & Hungary.

Mercedes Benz Promotion & Advertising Strategy:

The promotional and advertising strategy in the Mercedes Benz marketing strategy is
as follows:
Mercedes Benz has always been an aggressive promoter. The marketing mix
promotional strategy of Mercedes Benz uses all media channels like TV, print,
online, billboards etc. Being catering to the luxury segment, Mercedes did not feel
the need for the traditional methods of advertising. Mercedes’s marketing strategy
always focused on its products, technology etc. but with the changing times and
customer attitudes they have also resorted to increase its communication with
consumers worldwide through online marketing, social media presence, print media,
etc. Also Mercedes has built its brand awareness through various customer centric
activities like the Mercedes trophy, which is an international amateur golf tournament
where golfers from around the world compete. Also it organizes various drives like
the International driving platform, Luxe drive, etc. where motor enthusiasts get an
opportunity to drive the Mercedes cars in challenging locations. Hence, this covers
the Mercedes Benz marketing mix.

FINANCE
#2 PRESENTATION

Key financial ratios can be classified into the following five types:
1. Liquidity ratios measure a firm’s ability to meet maturing short-term obligations.
Current ratio
Quick (or acid-test) ratio
2. Leverage ratios measure the extent to which a firm has been financed by debt.
Debt-to-total-assets ratio
Debt-to-equity ratio
Long-term debt-to-equity ratio
Times-interest-earned (or coverage) ratio
3. Activity ratios measure how effectively a firm is using its resources.
Inventory turnover
Fixed assets turnover
Total assets turnover
Accounts receivable turnover
Average collection period
4. Profitability ratios measure management’s overall effectiveness as shown by the
returns generated on sales and investment.
Gross profit margin
Operating profit margin
Net profit margin
Return on total assets (ROA)
Return on stockholders’ equity (ROE)
Earnings per share (EPS)

Price-earnings ratio

MIS http://mercedes-benzis.blogspot.com/2011/12/size-of-different-information-systems_22.html

Mercedes-Benz Company use the three categories of the information system the
Departmental information system which connect between the different department
of the Mercedes-Benz Company like the supply department ,human resources
department and finance and accounting department also all other department its
#2 PRESENTATION

Combine all under the enterprise resources planning system (ERP) which include all
internal and external management information across an entire organization and it
work to make the business and planning inside the organization become easier and
more efficient using the network that make the flow of information inside the
company more effective , and make working with business activity more faster and
reliable because the operating works at the real time like for example dealing with
customer car order , also bill of the material used of producing the cars ,supply chain
planning and the company receivable . Whereas for Organizational information
system the company use a lot of information system like the Decision Support
Systems (DSS) this system use to support the organizational Decision making and
using the what if analysis for future planning, moreover the Mercedes company use
the Office Automation Systems (OAS) to support the data workers who share
information by using different software like spreadsheets, desktop publishing,
communication through voice mail, email, teleconferencing. Finally the Inter-
organizational system for Mercedes its system allows the flow of information to be
controlled by more than one organization in order to reach a desired supply-chain
management system and to have more advantages of having exchange of
technologies between organizations, Mercedes did that by having the IPhone
Interface Plus information system that enable Mercedes company to using
Smartphone’s as a media Center once the iPhone connect to the vehicle electronics
it well become easy to use the hardware controls , and it become easy to larger the
display on the vehicle’s dashboard to control and view content while driving and
enjoy iphone feature. ,The Mercedes-Benz app have been designed specifically for
the in-car use, making it easy to interact with social networks like email, GPS
services, Twitter, and Face book , furthermore its use to Tracking the service
progress of your vehicle and any problem the system find in the car for faster
checking of any errors face the car and this provide better service for the Mercedes
–Benz customers .

R&d

Daimler Greater China has opened a new state-of-the-art Mercedes-Benz Research & Development
Centre in China and has extended its local R&D network. The new facility will house 500 highly
qualified engineers and designers who will be working on new technology and product
developments for luxury automaker Mercedes-Benz. In total, about 865 million RMB (112 million
EUR) has been invested into the Beijing-based research and development facilities for Mercedes-
#2 PRESENTATION

Benz passenger cars, with about 105 million RMB (13.5 million EUR) into this new site alone,
according to a press release from the company.

IFE

Similar to

the EFE Matrix and Competitive Profile Matrix described in Chapter 3, an IFE Matrix can be

developed in five steps:

1. List key internal factors as identified in the internal-audit process. Use a total of

from 10 to 20 internal factors, including both strengths and weaknesses. List

strengths first and then weaknesses. Be as specific as possible, using percentages,

ratios, and comparative numbers. Recall that Edward Deming said, “In God we

trust. Everyone else bring data.”

2. Assign a weight that ranges from 0.0 (not important) to 1.0 (all-important) to each

factor. The weight assigned to a given factor indicates the relative importance of the

factor to being successful in the firm’s industry. Regardless of whether a key factor

is an internal strength or weakness, factors considered to have the greatest effect on

organizational performance should be assigned the highest weights. The sum of all

weights must equal 1.0.

3. Assign a 1-to-4 rating to each factor to indicate whether that factor represents a major

weakness (rating = 1), a minor weakness (rating = 2), a minor strength (rating = 3),

or a major strength (rating = 4). Note that strengths must receive a 3 or 4 rating and

weaknesses must receive a 1 or 2 rating. Ratings are thus company-based, whereas

the weights in step 2 are industry-based.

4. Multiply each factor’s weight by its rating to determine a weighted score for each

variable.

5. Sum the weighted scores for each variable to determine the total weighted score for

the organization.

Regardless of how many factors are included in an IFE Matrix, the total weighted

score can range from a low of 1.0 to a high of 4.0, with the average score being 2.5.

Total weighted scores well below 2.5 characterize organizations that are weak internally,

whereas scores significantly above 2.5 indicate a strong internal position

Strength
#2 PRESENTATION

The value of the company’s brands is strong and well-recognized.

The Interbrand consulting firm recognized Mercedes-Benz as the top 1 premium

brand in the automobile sector in the “Best Global Brands 2019.” Mercedes-Benz is
also considered one of the most valuable brands in the world [2].

Customer-focused approach.

The company caters to the needs of its customers through its customized products
and services. This focus is also reflected in the three business units of the company,
namely: Mercedes-Benz AG, Daimler Truck AG, and Daimler Mobility AG. The
company utilizes “special Mercedes-Benz moments and technologies” to make their
customers feel special and connected to their private cars.  [2]. 

Well-supported and highly capable research and development team.

The company has invested heavily in its R & D because it believes that this will
solidify the company’s future. The company intends to invest almost €19 billion in R
& D by the year 2020-2021. This will support the creation of new products,
innovation, and technology [2].

The use of “cash-preservation measures” and cost control efforts, especially

during the pandemic.

The company’s key figures improved during the 3rd quarter of 2020 compared to the
1st quarter of 2020 due to its extensive efforts to combat the drastic effects of the
COVID-19 pandemic. The company earned €40.3 billion in the 3 rd quarter of 2020.
This however is still lower compared to the €43.3 billion revenues earned in the
3rd quarter of 2019. Significant improvements were seen as well in terms of the
company’s net profit for the 3rd quarter of 2020 (€2.2 billion compared to €1.8 billion
in 2019 3rd quarter) [5]. The company’s stock price seemed to recover as well from a
big dip during March 2020 [7]. 
7. Mercedes holds patents on the majority of safety features which are present for
the safety of the customers
8. The company has a significant presence in sports & motorsports through
sponsorships & participation respectively- Strong presence in motor sport under
McLaren Mercedes in Formula 1

9. Mercedes is a pioneer in advertising and marketing & creates brand awareness

through TVCs, print media, OOH and online ads
10. The company is a leader in innovation and is responsible for internal combustion
engine, air bags etc.
11. Environmental friendly options-Mercedes has also invested in electric & hybrid
cars for producing environmental friendly luxury automobiles, Self-driving or
driverless cars are also under built by the company
#2 PRESENTATION

Weakeness

Maintenance and Service Cost: servicing costs is one of the significant which influence the sales of
any car or vehicle. Compared to other players in the same market, Mercedes Benz’s maintenance
costs are high.

The company had a history of recalls.=In the last years, the company had recalled some of its units
due to issues on airbags, headlights, defects in power steering, and poor wiring in the fuel system
[6].

The “diesel gate scandal”.=The company was previously involved in a controversy regarding
installations of software in its 250,000 Mercedes cars and vans to cheat air pollution tests. It was
reported in Sept. 2020 that the company agreed to pay $1.5 billion as a settlement with the U.S.
government. The company has also agreed to pay another $700 million as a settlement for a class-
action lawsuit [8].

Failed mergers and acquisitions: The merger between Mercedes (Daimler) and Chrysler group failed
because of a clash of cultures. Daimler Chrysler suffered from frequent cost-cutting and
unimpressive sales of Chrysler models (Johnson, 2018).