North South University

SBE, Department of Marketing and International Business

International Business
Course Code: INB372
Semester: Summer 2020

MIDTERM
(To BE ATTENDED BY ALL STUDENTS)

Name: Tanzir Ahamed

ID: 1821540030 Roll: 25 Sec:09

Faculty: MHz Date: 26/08/2020

TOTAL MARKS - 30

Marks obtained:

(This space is for faculty’s usage. Do not write here.)

1
 Introduction

Company Name: Daimler

Daimler is the most well-known automobile companies in the world. And this is the pioneering
company in the German automobile industry. They are familiar their most of the premium cars
and vehicles which they make. And they are the most successful company in Germany. And
worldwide they are well known for their most premium car Mercedes-Benz.
In 1886 two pioneer founders Gottlieb Daimler and Carl Benz started their own automobile
company; basically they focused to make gasoline-powered auto engine. Daimler and Benz both
are focused produce their manufacturing autos and both are succeeding their business. After forty
years later in 1926 the most two successful founders Daimler and Benz transformed their two
separate companies into one company. Two engineers utilize their experience they produce
powerful engine and make lots of verities models car. And now Daimler is the biggest premium
car manufacturer worldwide.[ CITATION The20 \l 1033 ]
The Daimler Company headquarters in Stuttgart, Germany.
Daimler makes their verities products with a lot of divisions. Most premium Mercedes-Benz
cars, Mercedes-Benz Vans (Passenger Bus, off-road vehicles), Daimler Trucks and Daimler
Financial Services. It helps companies financing packages, insurance and other financial services
for their customers. [ CITATION Dai20 \l 1033 ]
Daimler produces most of the products in Germany. Besides France, Spain, Latin America, the
U.S.A and North America and almost the other ten countries. And they operate their business
worldwide. Daimler has joint ventures with Chinese companies and most of the Vehicle plants
location is Germany, (Ham Bach) France, (Kecskemet) Hungary (Rastaclat) Germany. And
Daimler production plant is the largest production plant in Europe. They have a Research and
Development center where they develop their new car model production. Mercedes has a top-
class safe factory and always improve their car design and quality and they develop their product
innovation for their competitive business. [ CITATION Dai20 \l 1033 ]
In 2019 Daimler total year Production output is 3.34 million where their revenue is almost
€172.745. And the ends of 2019; almost 298,655 employees work with Daimler Company.
Now, this time Daimler Company focuses their green and innovative technology which is more
eco- friendly and they are adjusting their work with modern world. And they have taken this
issue of social responsibility as a challenge and it can be said that they are working successfully
in this issue.[ CITATION The20 \l 1033 ]

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 Market

 Daimler Mercedes-Benz produces its production unit in four continents in the whole
world. Most of their production unit in European countries. Among the countries outside
Europe, their production unit country is USA, Asia, and Latin America and in recent
years they increased their production in other countries also. Daimler produces their most
of the products in the UK, France, Italy, and Spain in the European country and their
main production plant in Germany. [ CITATION Ind12 \l 1033 ]
In 1994 Daimler entered the France market with a joint venture of a Swiss company. But
after some years later this factory was fully owned by the German company Daimler and
the factory was opened 1997.

In 1973 Daimler AG entered another European country Italy. There are three cities in
Italy where Daimler manages their business, and their financial car service is a leading
service in Italy. [ CITATION Dai20 \l 1033 ]

In 1981 Daimler-Benz acquired its production unit finally in Spain. And this is the largest
plant in the world where they produce Daimler vans and supplies all types of production
vehicles in the whole world market.

 Notable incidents

In 2006 Daimler Mercedes-Benz opened A Museum in Stuttgart which is the one and
only museum in the world where Mercedes shows their 120 years automobile history;
basically they shows people lot of historic car model which they produced from the
beginnings to present.[ CITATION Dai20 \l 1033 ]

In 1967 Mercedes opened their top secret track in media which was the high-speed track
for rough-road and test car high speed. Which is called a product of the "”Economic
miracle” This track proved Mercedes brand value and their diversity and development as
an automobile company. [ CITATION Dai20 \l 1033 ]

Mercedes-Benz name is associated with Formula One history. The ‘‘Silver Arrows’’ is
the car of Mercedes-Benzes racing legend. In 2014 Mercedes won 16 race and 2016
Mercedes break the record with 19 win.

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 Market Analysis

(i) Globalization of market and Globalization of

production

Daimler has five segments which they are operating; Mercedes-Benz Cars, Mercedes-Benz
Vans, Daimler Buses, Daimler Trucks and Daimler Financial Services. In Europeans countries
France recently produce electric and smart car in their own Daimler factory. Besides Italy, Spain,
Hungary also produces lot of vehicles and cars in their factory. And these every countries
Daimler AG have their own factory. Their most of the production unit are located in Europe and
these countries contribute their most of the revenues.
Normally Daimler use polycentric and geocentric approach for their company strategy. Since
their most of the production in EU countries so every employees and member moves to another
country easily. France, Spain and some EU countries Daimler apply polycentric approach where
they recruit their HR management level in their own country Germany and other employees are
selected from the local country. But most of the countries in EU Daimler use geocentric strategy
where they focus good production, skilled and efficient employees for their production unit and
HR management. [ CITATION Nea03 \l 1033 ][ CITATION Cer94 \l 1033 ]
Daimler manufactures high-end vehicles and cars that are more costly from other companies. So,
definitely their target customers are mostly rich people. Besides, they are popular in the market
for their expensive products.
Daimler use good materials and advanced technology for their every product and day by day
more invest their new vehicles design and upgrade their production safety. So, these competitive
advantages are keeping them ahead in auto mobile industry.

ii. Political environment

Normally political stability prevails in most of the European countries. So, multinational
companies get very good opportunities to invest and do their business easily.

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  In France there is a good political standing situation because they are the leading political
country in EU and they are the member of UN Security Council. But recently their
economic situation is not so stable but their political standing is enough for any company.
So, it can be said that there is a huge political advantage and opportunities for Daimler
doing their business and production their product. [ CITATION Lev00 \l 1033 ]
 Spain political stability is not good as like France and this is the main risk for
multinational companies. The local leadership in some areas is in conflict with the
government. This country is in a Global division of labor position and for this reason lot
of multinational companies not attractive set up their factories. [ CITATION Lev00 \l 1033 ]
 After some political issue in euro zone, it’s effect developments of Italy and it’s also
effect of companies who doing their production business in Italy. Some political decision
like tax rate in investments and business development is effect cost of the Daimler
production, so in this place Daimler have to find other ways to run their business
effectively.[ CITATION Eis09 \l 1033 ]

iii. Economic environment

After some economic setbacks, European countries have been able to turn around again and their
Trade Union and organizations have played a vital role.
 France has strong economic growth stability. And they are the 5th largest GDP output in
the world and strongest economic balance power in European countries. Recently they
have some budget issue but their economic condition is balanced, so it is the best
opportunities for multinational companies like automobiles industries. [ CITATION Luk05 \l
1033 ]

 Spain market condition is helpful for multinational companies because it has balanced
GDP which growth is +0.8% and this is the 3 rd largest economy in the European
countries. In economic scale Italian economic is attractive and valuable from other
countries. [ CITATION Mel08 \l 1033 ]

 Italy is best for luxury and rich automobiles product exporter where their Industry sector
GDP is 23.9 %. Italian automobile products are very high quality and creative, so it’s
good factor for other European countries automobile industries those invest and produce

5
 their product in Italy. And Italian vehicles market is growing continuously so,
multinational companies of automobiles can benefit from this sector.

iv. Legal environment

Most of the European countries help every foreign investor. But they have to follow some laws
and regulation. In this globalization world any country doesn’t want to disrupt business by
enforcing tough laws.
 In France any multinational company have to following some rules like Tax, regulatory,
environmental laws and others. France government laws are always helped for the
economy. And these laws are not challenging for multinational companies. But if anyone
breaks their legal laws they have to lead serious problems, so this is the risk for those
companies. But altogether France legal environment is lot of opportunities of Daimler
AG.[ CITATION Lam14 \l 1033 ]
 As a European countries Spain following most of the same conduct and rules for their
business laws. But some laws are challenging for multinational companies like Spain tax
policy is not favourable for business, because every sector they have a high taxation and
also their employees work framework is very complex which is not favourable for
automobiles or any multinational companies. So, in Spain there are lot of opportunities
for doing business but it’s more costly and risk for multinational companies. [ CITATION
Lam14 \l 1033 ]

 For manufacturing multinational companies Italy has a good legal environment. They
have some specific laws and rules for employment contracts. But in Italy there are some
problems with doing business like corruption, high level of tax in any business and
ineffective judicial system. These type of risk has face when any company doing their
production in Italy but overall they are offering boundless opportunities for multinational
companies.

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v. Cultural environment

As a Hofstede’s Dimension power distance cultural scenario France people are independent, and
they are take care oneself and they are individualist. Their Feminine behavior is a sign of success
and proudly. People motives Masculine or Feminine depend on their likes. Their low score on
feminine means they are caring in the society. France people Uncertainty Avoidance is high so
they always make their decision with well planning. And finally they are able to developing their
system and production if any necessary. So, it is good for any companies found this type of
cultural based country where they doing business.
Italian people are preferred decentralization power making and they like work with team. And
their Individualist culture focuses on more important friends and family. They are High score in
Masculine that means people are trying their best for achieve success. In feminine get low score
because they are caring for their life. In Uncertainty Avoidance is high that means society is
valuable and all laws and rules are maintained. So, people do not always decide multinational
companies product and others situation.
Spain power dimension is high that means they are high society and they are also individualist
which means they easily relate with cultures and other society. Spain people define Uncertainty
Avoidance it means they are following rules and laws besides their life are more complex.
[ CITATION Lut95 \l 1033 ]

Conclusion

Daimler is the most successful company in the automobile industry. They produce their vehicles
for almost Twenty-Two countries all over the world. Besides most of the production plant are
European countries like Germany, Spain, Italy, Austria and other some countries. In European
countries, Daimler has a lot of their own factories where they need skillful and efficient
employees for their manufactures. Still, outside of Europe, they faced a lot of problems like

7
setting up new factory and training workers and other facilities. So, their production costs
increase a lot. Where in France, Spain and Italy has provide a lot of advantages like they ensure
political and economic stability. Daimler also faces some problems in these countries, but they
met their challenging issues. In European countries, they have the almost same currency, same
business policy and their trade association is more readily helpful for multinational manufactures
automobile industries; so they fell safe and risk-free. In the Corona Virus pandemic situation,
Daimler stops their production in European countries because they want to ensure safety. But
manufacturing in European countries decision was indeed correct and appropriate. And the
European market continues to operate their all production unit and will play a vital role in the
success of Daimler. [ CITATION Dai20 \l 1033 ] [ CITATION The20 \l 1033 ]

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