It is clear that Mercedes is a multinational automobile manufacturer with a strong global presence although their target. Mercedes Benz targets the upper middle and high income market. However, it implements similar strategies to motivate their human resource as its competitors do and these include non-monetary and monetary forms of motivation. In terms of marketing, it uses print, electronic and Internet media for advertising. It also relies on their brand names for attracting customers and maintaining customer loyalty.
Thus, they become more competitive and the ones with best processes win market sectors. In this case the competitors react more aggressively and they introduce new IT innovations, instead of imitating the first mover. Competitors compete by introducing new innovations and attracting customers so that they begin to switch from one to another. Therefore they are responding to changing environment. Industry rivalry brings intense and dynamic movements in the market.
Intense competition. BMW faces increasing competition from its direct competitors and now tends to compete on price rather than differentiation. Moreover, the markets for luxury cars are saturated in the developed economies, thus intensifying competition. 2. Rising raw material prices.
Main players of the Automobile industry are Toyota, General motors, Volkswagen, Honda, Ford and more. The Automobile Industry is very complex and to start a business in automobile industry high level of capital investment is required. Not only huge amount of money but also a labor force will be essential, which are the main barriers to enter into the automobile industry. For Example, the US auto industry was once considered safe until Honda Motors gave a big challenge to these companies by opening a manufacturing plant in Ohio. The Automobile industry includes many other industries as well for example, tires and seat manufacture.
The customers of Mercedes Benz look for products that have certain benefits that hold value for them. Therefore, in terms of benefits sought, they seek for high-end integrated technology and functioning of the car, along with consistency in performance and most importantly they will look to purchase cars that will offer high sustainability and reliability. The Mercedes is purchased among customers that heavily use the product on a daily basis. As mentioned in the demographics segmentation section that people who purchase these cars are in the high income class group, which means that these customers will regularly use a mode of transportation to travel to workplaces. The market for Mercedes Benz will also be divided in terms of their loyalty status.
For example, is there was only one car manufacture, the automotive industry would greatly suffer for multiple reasons. Firstly, if a person wanted to buy a new car, there would only be one option to buy from. The car company could pick any price arbitrarily because there would be no competing car companies. The car company could also sell low quality cars. It would not make a difference because there would be no industry standard.
Automakers are using technological advancements in their vehicle The automobile companies are working closely together with the technological innovations to improve the ways of designing the cars. With the trending mobile technology, the tech savvies are using the mobile devices like the tablets and mobile phones and smartwatches to integrate with the vehicles and access the functionalities that are present in the vehicle. The connected cars are the vehicles are fitted with the LAN and data connection that allows the vehicle to access the internet with the devices that are present inside or outside the car. New technology and the automotive industry By using the mobile apps the functionalities and the features of the car can be improvised like implementing the GPS tracking system, user convenience, transmission of message to the in dash navigation system using the mobile phone, diagnostic reports of the vehicle and other
Mercedes-Benz offers a variety of product that can fulfill the preference of majority customer base. They design and differentiate their car models into several types of requirement and performance level such as compact luxury vehicle, mid-size luxury vehicle, high-performance vehicle level and so on. Moreover, customers can customize the interior accessories which can fulfill the customer’s satisfaction. In order to increase performance and luxury of their products, Mercedes-Benz had started a development division focus on upgrading the company product’s quality and performance name AMG in year 1999. AMG engines are all hand-built and it shows guarantee of confidence for customers seeking for outstanding performance car.
Potential Entrants Threats of entrants can be reduced by high fixed costs Tata Motors dominance over the market of commercial vehicles will be challenged by other market forces such as Mercedes-Benz, Volvo, and Navistar etc. also the world's largest truck maker Daimler heavy duty trucks of Bharat Benz brand is biggest challenge to Tata Motors. In commercial segment a fuel efficient vehicle is being developed Tata Motors to meet the competition head-on, this kind of an approach is to eliminate any sort of threats from entrants by keeping the fixed costs of production high that cannot be achieved by new players. Tata motors has taken some measures to mark its dominance in world automobile industry by introducing 50 new products