Mercedes-Benz SWOT Analysis 2021

Mercedes-Benz SWOT Analysis 2021

Mercedes-Benz SWOT Analysis: The year 2016 was a time of dynamic and constant increase in Mercedes Benz. Revenue and unit sales were up and EBIT increased to record levels. 

In all of this, the focus continued to be on the brand new E-class, which is being hailed as the world’s smartest business car. 

But, Mercedes has aggressively focused on the latest technological advances to gain the sake of growth and popularity. 

Other than the E class, its main specialization is roadsters and convertibles. Mercedes also produces a variety of SUVs.

Mercedes-Benz SWOT Analysis

It has modernized and expanded this selection further. With these changes, Mercedes has taken a stride towards electric mobility.

Its rise over the course of the calendar year is mostly due to the introduction of new models, specifically thanks to SUVs and the brand new E class. 

The brand is known principally for its high-end cars. It is currently seeking to grow faster through the introduction of new models and styles. 

In 2017, the market for luxury vehicles is predicted to increase and that creates huge potential for Mercedes. 

The following is a SWOT review of Mercedes Benz that evaluates the strengths as well as the weaknesses, opportunities, and threats that face the luxury brand’s name is mentioned.

Company Background

Name Mercedes-Benz AG [1] (Subsidiary of Daimler Group-Parent Company)
Industry Automotive [1]
Founded 1926 [1]
Headquarters Stuttgart, Germany [2]
Chairman of the Board of Management (CEO) Ola Källenius [2]
Revenues € 108.7 million (Combined Revenues of Mercedes-Benz Cars Division & Mercedes-Benz Vans Division) [2] € 172.7 billion (Daimler Group) [2]
Net Income € 2.7 billion (Daimler Group) [2]
Leading Competitors BMW, Ford, GM, Honda, Hyundai, Isuzu, Kia, Mazda, Nissan, Paccar, Subaru, Suzuki, Toyota, Volvo, Volkswagen [2]

SWOT Analysis Of Mercedes-Benz

Strengths In The SWOT Analysis Of  Mercedes-Benz

Mercedes-Benz SWOT Analysis

  • The value of brand’s names is high and well-known: The Interbrand consulting firm has recognized Mercedes-Benz as the most luxury brand in the auto industry in the “Best Global Brands 2019.” Mercedes-Benz is widely regarded as one of the most valued brands around the planet [22.
  • A customer-centric approach: The company meets the needs of its clients through custom-designed items and solutions. This is evident by the 3 business divisions of the company, specifically: Mercedes-Benz AG, Daimler Truck AG as well as Daimler Mobility AG. The company makes use of “special Mercedes-Benz moments and technologies” to make its customers feel unique in their own automobiles. [2].
  • Highly capable and well-supported researchers and developers: The company has made significant investments into its R & D because it believes this will strengthen the future of the company. The company is planning to invest nearly 19 billion euros into R & D by the period 2020-2021. This will help in the development of innovative products, new innovations, and technological advancements [2].
  • The usage in the form of “cash-preservation measures” and cost control measures, particularly during the outbreak: The company’s main figures increased in the 3rd quarter of 2020 as compared with the first quarter of 2020 because of its vast efforts to counter the severe consequences of the COVID-19 pandemic. The company made EUR40.3 billion during the 3 3rd quarter of the year 2020. It is however less than the EUR43.3 billion in revenues that were earned for the 3 3rd quarter of the year 2019. It was evident that significant improvements were made as well as the net profit of the company in the 3 3rd quarter, 2020 (EUR2.2 billion as compared with EUR1.8 billion in the 3 3rd quarter) [55. The stock price of the company appeared to rebound from a major dip in March 2020.

 Weaknesses In The SWOT Analysis Of  Mercedes-Benz

Mercedes-Benz SWOT Analysis

However, the truth is that even Mercedes has its flaws; the proof that perfection is only an ideal idea. Let’s look at what the most significant flaws of the Mercedes brand’s reputation are.

  • Competition: Despite being a well-known and well-known company, Mercedes still has many rivals in the market that are just as powerful as, if not even better. This is why it’s difficult for the brand to get a greater market share since the automotive business is extremely crowded. Brands such as Stellantis, Ferrari, BMW Group, and AutoFlightX always maintain Mercedes on its feet. Get it? I used the word “wheels” instead of feet since they are the ones who make cars.
  • Lawsuit: In the year 2020 Daimler, the parent company of the brand Daimler came under serious controversy after it was revealed that they had put in software on their vehicles that could make air pollution tests more difficult.250.000 units Mercedes-Benz were affected by this issue, and the company was required to pay 1.5 billion dollars to the US government, which had claimed to have the issue. It can take a few or perhaps one of the scandals that lead to lawsuits to totally ruin the image of some of the most renowned brands.
  • Vehicle Recalls: Everyone is entitled to make mistakes, as you are competent to correct them. However, brands like those we’re studying are expected to have almost zero errors. In 2021 the company took the decision to recall the 1.3 million products that were manufactured during the period 2016-21 due to a flaw in the Emergency Communication Module software. It is possible that this could give users inaccurate addresses during emergency situations. Even though the issue could be easily fixed, with the most unpleasant thing to do is go to the dealership, some chose to take the problem into their own hands.
  • Brand Image: Yes, you are thinking that I’ve put an advantage under the weak heading, but listen to this: although having great brand equity can be an asset, it’s an enormous burden for companies to uphold their standards. Even the tiniest of incidents such as scandals, opinions, or even the smallest of issues can cause unwarranted issues. Additionally, information of today remains in perpetuity through the internet. Ahead with a lot of weight wears the crown.

Opportunities In The SWOT Analysis Of  Mercedes-Benz

Mercedes-Benz SWOT Analysis

  • Opportunities for electric vehicles in the Chinese market As China seeks to achieve carbon neutrality in 2060, the country is aiming to achieve carbon neutrality. China also plans to reduce emit less CO2 before 2030 date. This is an opportunity that can be tapped by the company through creating a completely electric vehicle for the China markets ( McGrath, 2020).
  • Collaborations and partnerships: Mercedes-Benz and BMW’s collaboration to develop autonomous driving technology was suspended in the year 2019. By resuming the collaboration, each manufacturer can highlight their mutual compatibility in the area of security and benefits for customers with regard to autonomous driving. Strategic cooperation was expected to last for a long time in order to make advanced technologies accessible in 2024. ( Auto vista, 2020).
  • Mercedes-AMG link to Formula1:The sub-brand Mercedes-AMG’s connection to Formula1 will be further strengthened in the coming year to strengthen its reputation as a high-performance brand. Mercedes-Maybach is focused on opportunities for growth across the globe which will see it double its sales and will also be offering electric models ( Daimler, 2021)

Threats In The SWOT Analysis Of  Mercedes-Benz

Mercedes-Benz SWOT Analysis

  • Intense competition with other players in this segment: Presence of players like AUDI, BMW, Volvo, and others. which aren’t leaving a mark unturned to establish themselves as an international leader and player in all markets.
  • Variability in prices of fuel: At least for the segment of passengers, fluctuations in the prices of fuel remain the main driver for its rise. Additionally, government regulations regarding the use of alternative fuels, such as CNG. Shell gas can also affect inventories.
  • Sluggish Economy: Macroeconomic uncertainty, Recession, unemployment, etc. are economic indicators that could frighten the auto industry for a prolonged duration.
  • A high fixed cost and investments into R & D: Because the mature markets are already over-crowded and the industry is moving to emerge markets through the construction of infrastructure, R & D centers however the benefit is not yet realized.
  • government Regulations: Government policies such as reducing global warming through limiting the use of personal vehicles by reducing the road permit’s validity, reducing the volatility of the price of fuel, and restricting the entry of non-state vehicles are a few guidelines/regulations that are currently being implemented in various regions of the planet and are affecting the entire industry.

Benefits and limitations in SWOT analyses for Mercedes-Benz

The in-depth SWOT analysis could help Mercedes-Benz to maximize its potential through leveraging its internal strengths more quickly than its competitors. SWOT analysis provides a variety of advantages to Mercedes-Benz which are outlined in the following paragraphs:

  • It is a valuable resource to help you develop effective business strategies.
  • It allows Mercedes-Benz to maximize its strengths and overcome weaknesses, limit risks and make the most of opportunities.
  • Mercedes-Benz recognizes the key strengths, performs market forecasts, and also do future planning.

However, the SWOT analysis conducted by Mercedes-Benz has limitations the company should consider in order in order to reach its strategic goals.

  • Sometimes, it’s difficult to distinguish between threats and opportunities as the same opportunity may also pose a significant risk if the company cannot seize it quickly.
  • It is a simplified method of the identification of strengths or weaknesses, as well as opportunities and threats. The factors identified aren’t placed in order of their importance or urgency because of this, SWOT gives only a small amount of details.
  • The complex interdependency between the internal (strengths/weaknesses) and external (opportunities/threats) environmental factors make the analysis more difficult.
  • SWOT analysis doesn’t take into account the rapid nature of a changing environment.
  • The SWOT analysis is not able to provide solutions or suggest alternative strategies.
  • The analysis of weaknesses, strengths, threats, and opportunities creates lots of information, which can only be helpful in a small amount.

The limitations in SWOT analysis for Mercedes-Benz are a sign of the need for a holistic approach. Knowing and understanding these limitations could further enhance the process of making strategic decisions.

A SWOT analysis that is weighted for Mercedes-Benz

In order to address the above-mentioned limitations that have been mentioned, an asymmetrical SWOT analysis is possible for Mercedes-Benz which involves assigning importance to all the weaknesses and strengths outlined within the SWOT analysis of Mercedes-Benz. 

Also, it involves estimating the likelihood of an incident occurring in the external setting. This helps managers focus on the crucial aspects and pay less attention to lesser important factors.

The drawback of the SWOT analysis that is weighted is that it doesn’t examine how the holistic effect of various factors impacts the business when they are combined.

FAQ

What are the weaknesses of Mercedes Benz?

  • The company was known for its past of recalls. In the past the company was recalled certain models due to airbag issues headlights, airbags, problems with power steering, as well as poor connections in fuel systems [66.
  • “Delegate scandal “diesel gate scandal”.

What are the opportunities of Mercedes?

  • Mercedes will focus on developing hybrid cars as well as fuel-efficient cars in the near future.
  • The ability to tap into emerging markets around the planet and create an international brand.
  • The rapidly growing market for luxury cars and the resulting increase in income could be a great chance of Mercedes Benz.

What is the competitive advantage of Mercedes?

In accordance with Porter’s generic approach, Mercedes-Benz has employed focused market-specific differentiation strategies as a competitive strategy to beat other companies in the automobile sector (Thompson and others. 2007: 53). Mercedes creates their vehicles to look more luxurious than cars of competitors within the same price range.

What is Mercedes’s unique selling point?

Mercedes-Benz vehicles are built to give owners the highest level of luxury. This is the Mercedes-Benz promise. Every interior is designed to provide complete driver comfort and involvement and is outfitted with only top high-end materials.

Presently, a silver circle with a three-pointed star in the middle is today known to be an official Mercedes-Benz logo. Although the meaning of the logo was originally derived from family members and tradition, it is now used to symbolize the power and ubiquity of Daimler engines on the ground and at sea, and even in the air.

Why Mercedes-Benz is the best?

The luxury The luxurious interior, the luxurious leather upholstery soft carpeting, the polished wood trim, sleek design with LED mood lighting, an incredible variety of entertainment and information options; even the smell indicates that this car is unique. If you want the finest things in life, then your vehicle must be one from Mercedes-Benz.

What is the slogan for Mercedes-Benz?

The Mercedes-Benz Slogan is ” The Best or Nothing,” and it definitely reflects the high-end excellence of the cars that they offer even today.

In the span of seven years, Mercedes made the decision to include an iconic and well-known symbol of the three-pointed star. 1909 was the year that saw the birth of the iconic symbol that continued to be a part of the automobile industry up to this day. Gottlieb Daimler designed the logo when the wife of his friend wrote him on a postcard, and then sketched out the first rough design.

Mercedes-Benz SWOT Analysis Conclusion:

In the end, the business has a solid brand image and the resources required to pursue new possibilities. 

The issue lies with the constant innovation and innovative strategies of competitors, or any emerging competitors in the automobile sector. 

The business must ensure that it is able to increase its share of the market or discover new markets to increase its coverage. Concentrating on performance and quality is also essential.

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