6AG502 Strategic Management Assignment University of Derby

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 have a net income of around 15000 million and operating income of 20000 million (Hill, Jones and Schilling, 2014). The main competitors of the organization are analyzed as Volkswagen, Toyota, and Audi in UK.   There are various luxurious vehicles that have been launched by organizations in market to attract customers.

Analysis of the organization's strategic position using relevant KPIs

Key performance indicators are identified as measurable values, which clearly demonstrates the ways through which company is effectively achieving key business objectives. Large-scale organizations use their KPIs for evaluation of success at reaching the targets. In this context, there are also some key performance indicators  for Mercedes-Benz has identified and used to analyse the strategic business position of the organization in market. Some of them are as follows:

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Financial metrics:

• 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 reports to analyse the profits that clearly define their capabilities to sustain their position in the market (Moutinho and Vargas-Sanchez, 2018). At present, Mercedes-Benz has a strong financial position in the market in comparison to its competitors. company is now analysed as market leaders in their automotive sector in terms of financial strengths.
• Cost: It is also an important KPI in which shareholders and investors measure the cost effectiveness of the organization and find the best ways to reduce and manage the costs (Ginter, 2018). The Mercedes-Benz group has provided understanding that they have managed to cut its underlying cost.

Customers matrix:

• Customer lifetime value: In addition, minimizing the cost is not only the way for customer acquisition. Further, CLV provides support to consider the value Mercedes-Benz is getting from long-term customers (18 Key Performance Indicator (KPI), 2017). In this, the organization's position in industry has been identified through analysis of effective channels used by the organization to attract customers at the best price.
• Customer acquisition cost: It is also an important performance indicator that is analysed by the organization's shareholder to demonstrate its effectiveness in earning a high amount of profits in the market. It is also considered a cost incurred by Mercedes-Benz for attracting customers to buy its products and services (Wheelen et al., 2017). From the sales forecast of the company, it is analysed that Mercedes-Benz customers acquisition costs have decreased as they have applied new and innovative channels for promotion of their new Vechile in the market.
• Customer satisfaction and retention: An increase in customer satisfaction and retention of previous customers towards the organisation also provides analysis of the firm's capabilities and potential in the 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 services continuously to retain its previous potential customers.

People metric:

• Employee turnover rate: This KPI is mainly an indicator of the firm's effectiveness towards the achievement of its objectives. Employees are analysed as a strength of the Mercedes-Benz group as they provide support in the accomplishment of various business objectives, such as attracting customers, increasing market share, and carrying out research. An increase in employee turnover rate determines the weaknesses of the organization in managing its operations (Slack, 2015; Davis, 2014). In this, it is analyzed that Mercedes-Benz has implemented various monetary policies to motivate its employees and retain qualified employees at the workplace. They are also following all the rules and regulations related to the employment of organizations.
• 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 organizational strategic direction

Mercedes-Benz is one of the largest tour operator in the international tourism 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, and suppliers and increase their market share and price as well. This company use Ansoff matrix to evaluate the growth of the businesses.

Ansoff matrix

Mercedes-Benz will adopt a new product development strategy for long-term earnings, and it helps businesses by giving more opportunities or increasing profitability in the automotive sector. It is totally based on market share and market growth. It shows the high and low rates of the businesses, and it provides graphic representations of this company.

The objective of this report is to analyze the critical position of the Mercedes-Benz Group by applying PESTLE analysis.

Political

Political factors include tax policies of the government; they have a moderate impact on the performance and growth of the Mercedes-Benz Group. Negative publicity and the risk of perception arrive is generated by political instability, which influences the decisions of clients and results in an unavoidable decrease in client arrivals (Rothaermel, 2015). On the other hand, the financial condition is also affected by the terrorism, which led to serious crises for the Mercedes-Benz Group.

Economical

Automotive is a growing company; the growth and employment have become strategic components of the world economy. Downward momentum has been seen due to the recession. By high level of fixed assert, most of the automotive operators were handicapped and were less able to manage the automotive industry and airlines. There is fluctuation in exchange rates, fuel costs, and currency fluctuations. Primary automotive sectors like lodging, restaurants, transportation, and retail trade have the most direct effect on the economic environment of the Mercedes-Benz Group.

Socio-Culture

It mainly refers to the perception and values of customers towards purchasing products and services that also affect the profitability of enterprises. influence of social culture on business of an organization is positive, as people are likely to buy their products and services in market. Companies have influenced the perception of customers by providing quality services at the workplace.

Technology

For reservations and administrative operations for business, information technology has given boost to Automotive. 

Environmental

 These are the environmental factors that needs to be complies by organisation for regulation of business operations effectively. Legislations related to emissions and pollution also provided influence on the business operations of organizations in market.

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Critical evaluation of organization strategy

There are various important strategies that have been adopted by organizations in order to achieve success in business operations. Implementation of these strategies will provide support to organizations in overcoming its weaknesses and reduce the impact of external factors on business operators (Lasserre, 2017). As it was clearly analyzed, the 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 organizational strategy, which involves three important business elements, which are mentioned above:

• Suitability: This element of model clearly states that an organization will tend to achieve success in business operations when the strategy which they have applied in their organisation is effective. strategy of an organization is identified as suitable when its uses its strength, overcomes its weaknesses and helps in accomplishment of strategies. In this context, New product development strategy is also considered an important business strategy which provides support to Mercedes-Benz group in achieving high profitability in market as compared to rivals but it also contains high risk and sometimes it tends to create situation of failure. Along with this, for New product development strategy of business in machines and automobile accessories, manufacturing  requires a lot of capital and resources. Moreover, strong financial position in Automotive industry and brand image is major strength of the organization, 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 it is accepted by its stakeholders. Stakeholders are key players who possess their major impact on the business operations of organisations (Keupp, Palmié, and Gassmann, 2012). The organization can also make collaborations with other automotive 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 clearly identified that stakeholder will provide their acceptance towards strategies when they 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 the aim of getting major financial position in market. Along with this, it is also essential for organizations to have adequate human resource to perform business functions for New product development strategy of business (Priem and Carr, 2012). From the analysis, it is clearly identified that the organization needs to adopt various important business strategies to carry out various business expenses and promote 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.

CONCLUSION

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 provider, and now its has diversified its business operations in Automotive sector to promote the business operations. Mercedes-Benz group is major tour planner, which is a company of opportunities for their customers, stakeholders and 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 long-term customer. Mercedes-Benz customers acquisition cost have decreased as they have applied new and innovative channels for promotion of their products and services in market. increase in employee turnover rate determines weaknesses of the organization in managing its operations. Employees in Mercedes-Benz are highly satisfied with compensation policies and business operations of organisations.

RECOMMENDATIONS

From the analysis of the organization's financial position, it is analyzed that 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 organizations to have support of stakeholders. Therefore, it is essential for organizations 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 focus on increasing profitability and its position in market. For achievement of success in business operations , it is essential for organization to deliver high-quality products and services to attract its target customers. Along with this, they also adopt effective and new marketing techniques for increasing their brand image in diversified market.

REFERENCES

• 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.
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• Lasserre, P., 2017. Global strategic management. Palgrave.
• Meyer, G.D., Neck, H.M., and Meeks, M.D., 2017. The entrepreneurial 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.

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