BBA – MBA Integrated Programme

(2017 – 22)
Summer Internship 2020

MERCEDES-BENZ AG

Phase-III
WEEK-1
Submitted on
21ST JUNE, 2020

Submitted by
SHIRAZ NAGARIA (177149)
 PHASE-III
SWOT ANALYSIS FOR MERCEDES-BENZ AG
STRENGTHS
 Strong presence in growing economies: A growing economy holds greater potential than
what some scholars believe. Taking example of India, Benz has a strong presence in the
country, where they hold the largest market share in the premium automotive segment.
since the economy is growing, there lies great potential in gaining higher sales and
greater brand value in the county.
 Innovation: The company, historically has been the most innovative brand. Mercedes-
Benz created the trend of cars and continues to create innovative technologies in the
cars that maximize the customer experience, making them a leader in the market. The
company has many patented safety features, which differentiate their product from
other brands.
 R&D: Mercedes-Benz invests highly in their R&D activities, developing technologies for
tomorrow. The company produces some of the most incredible vehicles ever seen. The
R&D infrastructure increases the overall cost for the company, but in turn, the R&D
department comes with great results which has created the brand value they have
today to an extent.
 Global market share: over the years, Mercedes-Benz has held a strong presence in many
economies and has managed to be the leading brand in that country. Globally speaking,
the company holds the largest share in vehicles sold.

WEAKNESSES
 Expensive cars & spares: Being a luxury brand, it is obvious that the cost of vehicle and
spares would be high. But, in the competitive nature of the luxury automobile industry
requires that Mercedes-Benz bring down the cost to consumers. This will help boost
their global sales and also help in retention of customers.
 Tapping into EV segment: compared to other competitors, Mercedes-Benz has not come
out with many Electric Performance cars. For example, AUDI has launched the E-Tron,
which is an electric performance vehicle, while Mercedes-Benz is producing hybrids still.
The pace of production of EVs is low.
 Narrow range of customers: Mercedes-Benz, being a luxury carmaker has a low
customer base. Only those who can afford the cars are under the focus group. in my
opinion, the company should try decreasing cost of purchase of the cars, the customer
base may increase significantly.
 Highly competitive markets: as mentioned earlier, there is stiff competition in the
automobile industry globally. Mercedes-Benz faces competition from BMW, AUDI, LAND
 ROVER, etc., which makes it harder to gain access to untapped markets. There is no
geographical region where only one brand would be involved.

OPPORTUNITIES

 Developing future cars: every country has their own emissions norms and these norms
are becoming tighter with time. To tackle this and to bring forth revolutionary changes,
Mercedes-Benz would need to invest more into production of hybrid vehicles and
electric vehicles. The automobile industry is currently experiencing that shift globally,
with brands moving towards production of future cars.
 Tap into developing countries: the purchasing power of consumers in developing
economies is increasing with the level of income and due to impact of globalization.
With this, Mercedes-Benz can fill in the market gaps in developing countries.
 Expansion of Daimler Trucks and vans: The financials of the past few years show that the
Mercedes owned subsidiaries that produce vans and trucks have falling sales. The
reason for this is high cost of the commercial vehicles. The company can invest more
into the trucks and vans division, invest in R&D, move production sites to more
favorable location, which could increase the revenue generation from that segment of
vehicles.

THREATS

 Development of public transportation: From the viewpoint of a country’s government,

improvement in public transportation facilities is a good sign. But from the view point of
car makers, it is the opposite. Better public transportation systems mean that people
would prefer travelling by public mode of transportation rather than driving themselves
to work or other places.
 CO2 emission regulations: with increase in fuel powered vehicles around the world,
some countries have started having stricter emission norms, which would mean that the
car producer has to comply by those norms in order to sell their vehicles.
 Competition from Japanese Luxury car makers: brands like LEXUS (under Toyota) and
INFINITI (under Nissan) are producing cheaper and more durable luxury cars. This poses
competition for Mercedes-Benz because these manufacturers produce a lower cost, and
almost similar product, with comparatively similar performance and durability
standards.
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 Expansion into untapped markets: Mercedes-Benz has presence across the globe, with
establishment in several countries across most continents. Within the African Continent,
there are only 3 dealerships across the continents which are in Kenya, South Africa and
Egypt. If Mercedes-Benz expands to other African countries, the scope of business
increases, and this is a good sign for the company. Obviously, there are many factors to
consider before establishment in a foreign country. From a personal learning, I
understand that Tanzania is a business flourishing country, where there are good
proportion of substantially rich individuals who can afford luxuries. Here, Mercedes-
Benz has an opportunity. Likewise, there are other countries such as Uganda, Zambia,
DRC, etc. where great opportunities lie for the expansion of dealerships.
 Increasing investment in EV segment: the trend of performance cars is changing from
the current fuel combustion engine to hybrids and Electric Vehicles (EVs), powered by
batteries. Currently, tesla’s Model-X has proven a significant change in the way
consumers view an eco-friendly performance car. Before, if a car owner wanted to tune
his car for better performance, he had to get the cars hardware (under the hood
machines) replaced. But now, it’s all controlled by software. Tesla provides regular
updates on their cars which even increase the cars performance in terms of
horsepower, better battery capacity, better driving experience, etc. thus, it is very
important that Mercedes-Benz have an approach towards investing more into EVs. The
idea of electric vehicles is currently being slowly accepted by consumers worldwide. In
the coming decade, there could be a revolutionary shift in the way people see what a
car is.
 Cost efficiencies: Mercedes-Benz being a Luxury carmaker, it is quite obvious that the
price would carry a large premium due to various luxuries and features of the car. But,
currently, consumers are looking for luxury cars at a lower cost. Among the youngsters
in India, a study shows that BMW is preferred over Mercedes-Benz because of the fact
that it would cost them a little less, but provides almost a similar characteristic profile.
Thus, in order to capture the market gap, Mercedes-Benz could lower their profit
margins, allowing more customers to buy their products.
 Autonomous driving: the autonomous driving capabilities of Mercedes-Benz has been
installed in the top range cars for parking assistance, driving ease, etc., but the company
has not managed to create a complete autonomous driving experience car. Car brands
like Tesla and Audi have already launched production vehicles with complete
autonomous driving experience. If Mercedes-Benz manages to tap this feature in the
production line cars, it can be a spectacular plus point while a consumer wants to
purchase a car.