Mercedes-Benz produces some of the most technologically advanced, sophisticated, and performance-oriented automobiles on the market, and this is no accident. Since Karl Benz produced the first petrol-powered car in 1886, they’ve been producing inventive and technologically revolutionary vehicles.
In this blog, we will be discussing the company’s strengths, challenges, and opportunities in the contemporary business world. Before we dive deep into the SWOT Analysis of Mercedes Benz, let’s learn about the company in brief.
About Mercedes Benz
Mercedes-Benz was founded on 28 June 1926. It is known as a brand of cars from the Daimler AG company of Germany. The two main divisions of the company are cars and vans. The production output of the brand is around 2,164,187 cars across the globe. Brand’s slogan is “The best or nothing” and it is known for luxurious cars with classy looks. It was the largest seller of the premium vehicle in the world, having sold 2.13 million passenger cars. The organization’s headquarters are located in Stuttgart, Baden-Wurttemberg, Germany, manufactured luxury vehicles, trucks, buses, and coaches.
The symbol of the company was entered on the register of trademarks on 10 October 1910. The brand logo consists of a three-pointed star which means the domination of Mercedes Benz on land, sea, and air.
Now that we understand the company better, let’s dive right into the SWOT analysis of Mercedes Benz.
SWOT Analysis of Mercedes Benz
SWOT analysis is an evaluation of a company’s Strengths, Weaknesses, Opportunities, and Threats. Strength and weaknesses are the internal factors and on the other hand Opportunities and Threats are the external factors. SWOT analysis enables the brand to compare its performance with its competitors since it is one of the best leading luxurious brands in the automobile sector.
Let’s examine the SWOT analysis of Mercedes-Benz.
1. Strengths of Mercedes Benz
Strengths are the basic benefactor of a company. With the help of strengths, a brand can improve the quality and quantity of its products with a lot of innovative marketing strategies.
- Leader in Innovation
Mercedes-Benz is the world’s first automobile company that introduced diesel engines, fuel injection, and anti-locking brakes.
- Financially Developed
It is a financially developed company and because of that, they invest huge amounts of money in brand building. The brand holds patents on the majority of safety features
- Top Level Management
Dieter Zetsche is the Chairman of the Management Board of Mercedes Benz who is very well experienced in the field and helps in increasing the strength of the company.
The organization has a good brand image because it creates brand awareness through TVCs, print media, and online ads which easily reaches its target audience.
- Partnership with Luxury Hotels
Mercedes Benz has a partnership with Kempinski hotel which allows the guest to drive the brand cars leading to the sales and growth of the company. It invests billions of dollars in the marketing and promotions of its vehicles.
2. Weaknesses of Mercedes Benz
Weaknesses are challenges faced by the company. This allows the brand to improve its mistakes and course-correct. Let’s have a look at Mercedes-Benz’s weaknesses.
- Expensive Luxury Brand
Being a luxury car, Mercedes Benz is very expensive which at times results in the weakness of the Automobiles Companies. There are gaps within the range of the products sold by the corporation. This may create an opportunity for the competitors to attract more customers to their products.
- Limited Global Distribution
The distribution of Mercedes Benz cars is limited around the globe; which affects the supply and thereby the brand equity. Even though the company is spending above the industry average on research and development, it has not been able to compete with the leading automobile companies in the terms of innovation.
3. Opportunities for Mercedes Benz
Opportunities are potential avenues for growth. Let’s discuss some opportunities that could greatly benefit Mercedes-Benz.
- Need for Luxury Cars
Need for the luxury cars is growing rapidly and it can be a good opportunity for automobile companies like Mercedes to expand their markets in underdeveloped countries i.e. India and Sri Lanka.
- Technical Update
Mercedes Benz is technically updated with hybrid features to bring more reliability and comfort to their costumes. The company can collaborate with other leading manufacturers of electric cars to create new and unique electric cars. Mercedes can develop electric luxury cars in the future to reduce major consumption of fossil fuel as there is a limited source of fossil fuel left.
- Research and Development with E-commerce
Research and Development (R&D) is a great tool in bringing new features to their Cars. The emergence of e-commerce and social media marketing can create an opportunity for Mercedes-Benz if it can ensure an online presence on different social networking sites.
4. Threats to Mercedes Benz
Threats are the major challenges faced by the company. Although if dealt with timely, they could prove to be extremely helpful.
- Fluctuations in Fuel Prices
Fluctuation in fuel prices remains the deciding factor for its growth. Increasing prices of steel and other raw materials may directly influence the manufacturing cost and sales of Mercedes-Benz. Price war and the rise in inflation increases the cost of production and affects the business of profitability
- Change in Governmental Policies
Change in the government policies for the automobile sector all around the world can cost business losses for Mercedes-Benz.
There are a couple of different marketing techniques from the other automobile companies which the brand must use to take them up a notch in the luxury market. They always stick to their target market and ensure the safety of their customers. Their main goal is to be recognized as a means of transportation and comfort in the industry, and they seem to have been succeeding so far.
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