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Mercedes-Benz
What is the competitive environment faced by MB?
MB's competitive environment consists of other brand manufacturers producing all-utility vehicles, a new market for automobile manufacturers in the 1990s. Competitors were also produced vehicles that conformed to consumer safety demands (airbags, etc.) and that were cost-efficient. By the time MB entered into the AAV market, consumers were moving towards more luxury brand automobiles, which conformed more to MB's aim.
How has MB reacted to the changing world market for luxury automobiles?
It has accommodated consumer demand for more safety -- as the sampling of consumers showed this to be the most common demand in vehicles with a "relative percentage rating of 41%" (Albright, 2000, p. 3). But, of course, most significantly, it has expanded its luxury class to include production of the AAV -- a new type of vehicle for MB, never before produced. Its purpose is to combine the SUV phenomenon with the luxury brand stylings of MB for a new vehicular experience.
3) Using Cooper's cost, quality, and functionality chart, discuss the factors on which MB competes with other automobile producers such as Jeep, Ford, and GM.
Using Cooper's cost, quality and functionality chart, the factors...
Its MB-style chassis is most important to the company because this is what delivers the typical quality smooth MB drive, but safety is number one on the importance list for consumers. Thus, MB achieves balance between price and functionality by being aware of costs that competitors are maintaining and also providing the functions important to consumers. For example, it discovers consumer costs by purchasing competitors' vehicles and breaking them down to discover how they were put together and at what price. Surveys of consumers were also conducted in order to discover functions that they preferred and these were combined with functions MB preferred to still maintain. Because the market for the consumer interested in the luxury AAV was primarily in the U.S., MB decided to build and manufacturer the cars right in the U.S. so as to reduce shipping costs and also be closer to consumer (helpful for getting important consumer input).
4) How does AAV project link with MB strategy in terms of market coverage?
In terms of market coverage, MB's AAV strategy helped the manufacturer reach a new audience of consumer -- the driver seeking a larger luxury vehicle that conformed to the AAV trend. Because the market for this driver was primarily in the U.S., MB decided to…
References
Albright, T. (2000). Case I: Mercedes-Benz: All-Activity Vehicle (AAV). NJ:
Institute of Management Accountants.
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