Mercedes Benz organization behavior

Mercedes-Benz is a division of Daimler AG, manufacturing luxury vehicles, buses, and trucks. Mercedes-Benz organization has been around for well over a decade, submitting their first patent for the first car invented by the organization in 1886. Since the creation of the first car, "Mercedes-Benz has set the pace for what all cars might someday become" (M-BUSA).

The company's first vehicle not only changed the way people moved about, but it also sparked a future of innovation that Mercedes-Benz still boasts about today. Until 1931, Mercedes-Benz devoted its resources to the production of a three-wheeled vehicle. However, in 1931 Mercedes released details of the four-wheel independent suspension; the first-ever fully independent suspension.

By this time, Mercedes was capturing a large part of the upper-class European market but still hadn't made its impact on the American market quite yet. As Mercedes shifted their focus to adapt to the American wants and needs, safety became a major factor in producing reliable and classy cars. In 1978, Mercedes added ABS (antilock braking system) to its line of vehicles. In the midst of fully capturing the American market, Mercedes got caught up with the rapid influx of sales, just before the recession hit.

Poor decisions were made to expand during a time of a fragile economy. In the early part of 2000's, customer complaints and media scrutiny hit Mercedes-Benz organization hard. In fact, in the middle of the decade, consumer reports rated some of the company's vehicles as a zero; the lowest possible score.

At this time, Mercedes management spent hours with their engineering people to find a solution to the quality issues. In addition, Mercedes failed to merge with Chrysler, and to make matters worse, the economic recession had begun to effect sales.

Mercedes overcame these issues and recovered from the scrutiny in a matter of only a few years. Mercedes introduced a Ernst Lieb as the new President and CEO of its USA division. Mr. Lieb envisioned some necessary steps to "improve the company and its culture" (GPtW Institute). Mercedes-Benz has continued to rely on its innovation as a key successor for the firm. In addition, Lieb implemented a fitness self-awareness survey that allows colleagues to understand who they really are while finding practical solutions.

Retrospectively, Mercedes-Benz continually updates its processes as new innovations often require slight deviations. Likewise, Mercedes-Benz has adapted design and innovation through the likes of the fashion and technology industries. “In addition elegance and design have been the major factors of success for the brand Mercedes-Benz," stated by Mercedes-Benz Middle East Corporate division. In the end, CEO, Ernst Lieb continues to support his theorem enforcing his employees to be fully committed to 'staying on the course'.

"About Mercedes-Benz USA | Mercedes-Benz." Mercedes-Benz USA. N.p., n.d. Web. 18 Feb. 2013. .

Kiley, David. "Mercedes-Benz Scores Zero in Consumer Reports. Ouch!" Consumer Reports. N.p., 20 Mar. 2007. Web. 17 Feb. 2013. .

"Leading through Innovation." Mercedes-Benz USA. N.p., n.d. Web. 18 Feb. 2013. .

"Mercedes-Benz Middle-East and Levant – News & Events – ExpressYourStyle."Mercedes-Benz Middle-East and Levant – News & Events – ExpressYourStyle. N.p., n.d. Web. 19 Feb. 2013. .

"Mercedes-Benz USA's Turnaround." Mercedes-Benz USA's Turnaround. Great Place to Work Institute, n.d. Web. 18 Feb. 2013. .

Part B (Scott):

The Mercedes-Benz brand has set the standard for luxury cars since 1886. According to emercedesbenz.com, Mercedes business model is crafting vehicles that are cutting edge in safety, luxury, refinement and a symbol of status. Status is a big deal in the world today. Mercedes has branded itself as the benchmark of success. People do not react the same way if someone says they own a Kia or Hyundai.

According to a poll on consumerreports.com, 86 percent of the people polled voted yes when asked, “Do you consider someone successful if they own a Mercedes?” In 2010, Mercedes was able withstand the economic recession due to another facet of their business model, providing affordable loans to dealers and consumers.

Peter Zieringer, CEO of Mercedes-Benz Bank, stated that Mercedes consistent lending policy kept a good relationship with banks at a time when consumers were looking for reliable lenders(Dietmar). Not only has Mercedes been consistent, they have also been innovative to keep up with the competition. Mercedes-Benz provides many affordable models while still keeping its prestige.

Mercedes has recently developed lower costing cars in response to their biggest competitors, Audi and BMW. In 2011, profits fell for Mercedes-Benz while BMW’s profits rose once again. BMW sold 287,000 more cars than Mercedes in 2011. This is largely due to the fact that BMW offers a wider range of models. Mercedes-Benz countered with additional models of their own including the C-Class, CLA-Class, and E-Class.

They have a brand new CLA-Class beginning at $29,000. The C-Class sedans begin at $35,000(Edmunds). Mercedes-Benz now offers 12 different models. Although the sales in 2011 compared to BMW may seem like bad news, Mercedes sold the most cars in their history that year, earning $5.2 billion dollars. Mercedes-Benz innovation and brand enables them to be a top competitor in the auto industry year in and year out.

Hawranek, Dietmar. “Daimler Struggles to Regain its Spark.” Spiegel Online. 28 September 2012. Web. 20 February 2013. http://www.spiegel.de/international/business/mercedes-falling-behind-competitors-despite-strategy-changes-a-858260-2.html “Mercedes-Benz Reviews – New Mercedes-Benz Cars” Edmunds Online.” N.p., n.d. Web. 20 February 2013.http://www.edmunds.com/mercedes-benz/?ps=new&mktcat=mn-cities-mercedes-benz&kw=mercedes-benz+new+market&mktid=ga25039325&gclid=CKPrk_TLr7UCFQmxnQodISUA0w

Part C (Quentin): Mission

Although the internal mission statement of Mercedes-Benz USA is not publicly available, the luxury carmaker does have six values that they refer to as "What Drives Us," which fulfill the intention behind a formal mission statement. The six values that "drive" Mercedes-Benz USA are:

• The audacity to reject compromise • The instinct to protect what matters • The commitment to honor a legacy • The vision to consider every detail • The foresight to take responsibility • The ingenuity to outperform expectations

Additionally, on November 25, 2010, the parent company of Mercedes-Benz, Daimler Group, joined 21 German companies in agreeing to a "mission statement for responsible actions in business." The six principles of this shared mission statement are: •

Business must serve the good of the people. • Business that serves the good of the people requires competition. • Business that serves the good of the people is based on merit. • Business that serves the good of the people takes place globally. • Business that serves the good of the people must be sustainable. • Business that serves the good of the people demands responsible.

Vision

Due to the nature of the Mercedes-Benz products, namely, luxury cars, the company is known for expensive cars, parts and services. The vision the company builds on is an ambition to lead through brand, product, sales and profit. Mercedes-Benz focus on responsibility, perfection and fascination is what attributes to it being the most valuable premium automotive brand worldwide and Europe’s most valuable brand overall.

Mercedes-Benz communication activities support the three brand values of responsibility (customer care, sustainability, innovation), fascination (sportiness, style, design), and perfection (comfort, quality, safety). They focus on four international sponsoring platforms such as fashion, sports, corporate social responsibility, and classic. By using their sponsorship activities for classical advertising they communicate in an authentic way to their target group. Mercedes, aware of the recession and the decline in sales for the year 2009, ran the ad on TV and displayed the price for the E-class car “starting at $48,600”.

This subtle piece of advertising had a powerful impact. In 2003, the E-class car had a 9% higher price. Instead of stating and promoting the discounted 9% price, they only decided to show the new price. Mercedes-Benz prospects knew that the price reflected value according to the tough economic times and the price helped on increasing sales based on the value-conscious Mercedes aficionados. Therefore, it can be inferred that Mercedes vision on their marketing communication will always be consistent to the historical background and the perceived high value of German engineering instead of promote themselves as a desperate company to capture sales no matter what.

Objectives

Mercedes-Benz has the objective to be number one luxury car seller and automaker in the world. When the company started to be involved with Chrysler the company suffered a bit. Many customers complained with the poor quality of the electrical wiring of the car that gave problems to many and the accessories were not working as intended.

Many said that Mercedes-Benz were great cars as long as they stay in the blueprint. Once manufactured, they were no longer the best of the best. Much of the perceived decrease in quality has to do with Chrysler. Aware of the need to separate the concept of Mercedes from the troubled Chrysler brand, in 2005 the parent company, Daimler, launched a major program to re-establish the Mercedes credentials and a year later has given the Mercedes brand full strength.

Traditionally, the company has enjoyed a good standing among the public opinion. Back in 1930’s the brand started to market the cars luxuriously throughout Europe. In Paris, France, the company opened up a dealer store which helps on bringing prestige to the sophisticated consumer. They did not reach acclaimed reputation by chance.

The company knew that they needed a recognizable trademark. The three pointed star logo was created “symbolize Daimler’s ambition of universal motorization – ‘on land, on water and in the air’” 7. As of now, the Mercedes-Benz logo is one of the most recognizable trademarks in the word. Its simplistic but meaningful approach has gone through many innovations over the years. It was first seen on a Daimler in 1909 and 2011 it is an undisputed statement of quality, luxury and superior engineering.

1. http://retailindustry.about.com/od/retailbestpractices/ig/Company-Mission- Statements/Mercedes-Benz-USA-Mission-Statement.htm 2. http://www.emercedesbenz.com/Apr08/ 17_001109_The_History_Behind_The_Mercedes_Benz_Brand_And_The_Three _Pointed_Star.html 3. http://ar2007.daimler.com/cgi-bin/show.ssp? companyName=daimler&language=English&report_id=gb-2007&id=0 4. http://ar2007.daimler.com/cgi-bin/show.ssp? companyName=daimler&language=English&report_id=gb-2007&id=2001

Part D (Hoa): Mercedes hasn’t really been open to the public about all their goals, but I was able to come across some of them. For instance, on May 25, 2010 the firm stated that they wanted to increase their U.S market sales by 30% within the next five years. Their automaker’s executives have suggested that they expand in the down market to make this attainable. In an effort to attract more customers, Mercedes would bring in their B-Class hatchback and present extra C- Class derivatives.

Mercedes top two rivals, BMW and Audi has already released new coupes, convertibles and sedans. Mercedes had to remodel some original designs to keep up with the new market. The company has redesigned their E-Class’s doors, front end and also re-did the interior to make their line of luxury cars more presentable.

Also Chairmen/CEO of Mercedes, Dieter Zetsche has presented his “Mercedes-Benz 2020” strategy which calls for a wider range of models. The number of models for their A and B Class will increase from two to five and will include coupes, convertibles and SUVs. Their new S-Class will also be available in five models as well. Additionally, Mercedes will be investing in improved features and higher quality for all its vehicles.

This strategy also initially has plans for the B-Class to be launched into the marketplace with not only gasoline and diesel engines but with four other alternative drive systems. This however was difficult to complete due to it being too expensive or production of these alternatives were not ready at the time. So the B-Class will only be releasing electric and natural gas models.

On another note, Mercedes is celebrating the 125th anniversary of its automobile company. To commemorate this, Mercedes’ goal is to perform 125 Acts of Giving Back to the community. Some of the events that they are doing are Cookies for Cancer, Safe Driving Presentations, and the Family Reach Foundation.

http://www.spiegel.de/international/business/mercedes-falling-behind-competitors-despite- strategy-changes-a-858260-2.html http://www.benzinsider.com/2010/05/mercedes-sets-high-goals-expands-c-class-lineup-in-the- us/ http://www.mbusa.com/mercedes/about_us/mbcommunity