Mercedes-Benz: Overcoming Diminishing Market Share Essay

Mercedes-Benz: Overcoming Diminishing Market Share Essay

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Introduction 3
The central issue 3
Mercedes-Benz’s Management Goals 3
Management Constraints 3
Alternatives to dealing with management constraints 4
Implementation plan 5
Conclusion 5
References 6

(Albright, 2008, pp. 1) carried out a case study on the Mercedes Benz’s All Activity Vehicle (AAV) that the company developed as one of the new vehicle models it introduced into the market to counter the negative performance results it posted in the wake of the early 1990s recession that led to a dip in its sales and consequent losses.
The central issue
The central issue that (Albright, 2008, pp. 1) intends to bring out in the case study is how a company like Mercedes-Benz can overcome problems of a diminishing market share and high production costs to ultimately increase their vehicle sales by developing new vehicle models, that are targeted at emerging market segments and niches while ensuring that the product development costs are minimized. As a result of the great recession of the early 1990s, Mercedes made losses for the first time in its history. There was thus a need to develop a new strategy to overturn the results and get back to its profitability making history.
Mercedes-Benz’s Management Goals
According to (Albright, 2008, pp. 1), the goals of Mercedes-Benz’s management are to increase its market share through identification of new market segments and niches of customers and target them with new models in the most cost effective way while maintaining their internal standards of quality and customer satisfaction. They intended to achieve these goals through globalization and establishment of manufacturing plants as close as possi...

... middle of paper ...

...ies need to make bold steps in addressing challenges present in the environments in which they operate. It is also important to incorporate consumers’ participation in product design and specifications by explaining product concepts and ideas to them and seeking their ideas and suggestions. This ensures that the final product is acceptable to them as they will feel they own the product and thus become encouraged to buy it. It is also important to develop seamless relationships with suppliers of product components and systems and ensure that they are involved from the early stages of new product development so that they understand and co-own the production process to avoid deviations from projections and targets in terms of costs of productions.

Albright, T. (2008). Mercedes-Benz All Activity vehicle (AAV). IMA Educational Case Journal, 1(1), 1-4.

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