Introduction

ABC Capital LLP (ABC) has engaged XYZ Consulting LLP (XYZ) to analyze Mercedes-Benz (MBUSA) with respect to the potential acquisition of Goldman Sachs. This report provides an overview of XYZ’s analysis and includes a Company Overview, Industry Analysis, Recommendation and Conclusion Section. As part of XYZ’s analysis, a company overview was performed to provide insight into how MBUSA functions and detail MBUSA’s various product lines and business units. Additionally, an industry analysis was performed on the automobile industry, which provides an overview of the industry in which MBUSA operates. Furthermore, the industry analysis outlines the key players, trends, risks and regulatory aspects of the automobile industry. Ultimately, the facts, circumstances and analysis from the Business Overview and Industry Analysis Sections were relied upon to establish a recommendation, which is detailed in the Recommendation section.

To start with, Mercedes-Benz has been operating for the period of more than 125 years, an accomplishment just made possible through the consent of its buyers. In order to demonstrate its gratitude, the company attempt to be active in over 16 communities and carry out some good where possible, whenever possible. During the year 2014, MBUSA attained the greatest yearly sales volume with around 330,391 vehicles sold, signifying a rise of around 5.7% over the sales of 2013.

Even though, MBUSA was established during the year 1965, Mercedes-Benz vehicles importation actually started during 1952. By the year1957, the company was in a position for expanding its reach within the US and formed a distribution contract with Studebaker-Packard Company. After 8 years, the corporation struck out on its own, developing Mercedes-Benz USA. With passing years, Mercedes-Benz has grown into a countrywide company, at present offer employment to more than 1,600 individuals. The corporation also has about 368 allied dealerships which appoint more than 22,000 individuals themselves.

CompanyAnalysis

Company overview

This particular section of the paper provides an overview of Mercedes-Benz (MBUSA) throwing light on its profitability metrics, product lines, history, business segments, leadership organizational chart, products, legal entities, critical success factors and risks.

1.1Business overview

To start with, Mercedes-Benz has been operating for the period of more than 125 years, an accomplishment just made possible through the consent of its buyers. In order to demonstrate its gratitude, the company attempt to be active in over 16 communities and carry out some good where possible, whenever possible (MBUSA, 2016). During the year 2014, MBUSA attained the greatest yearly sales volume with around 330,391 vehicles sold, signifying a rise of around 5.7% over the sales of 2013 (MBUSA, 2016).

Even though, MBUSA was established during the year 1965, Mercedes-Benz vehicles importation actually started during 1952. By the year1957, the company was in a position for expanding its reach within the US and formed a distribution contract with Studebaker-Packard Company (MBUSA, 2016). After 8 years, the corporation struck out on its own, developing Mercedes-Benz USA. With passing years, Mercedes-Benz has grown into a countrywide company, at present offer employment to more than 1,600 individuals (MBUSA, 2016). The corporation also has about 368 allied dealerships which appoint more than 22,000 individuals themselves.

1.2History

  • Importation of Mercedes-Benz vehicles essentially started in 1952
  • By the year 1957, Mercedes-Benz was in a position for expanding its reach within the United States.
  • MBUSA was established in 1965.
  • In 2014, the company accomplished the highest yearly sales volume in its history with around 330,391 vehicles sold

1.3 Business Segments

The company operates in financial, automobile manufacturing and automobile repair segments.

1.4 Leadership Organizational Chart

Provide a two level overview of the CEO and then three to five key C-level (Chief) executives.

1.5Products

The product line of MBUSA includes automobiles, trucks, buses, internal combustion engine and luxury vehicles.

1.6Legal entities

1.7 Critical Success Factors

Critical success factors in case of MBUSA include:

  • Strong brand value
  • Worldwide leader in premium automobiles
  • Leader in modernization i.e. first forintroducing diesel engines, anti-locking brakes and fuel injection
  • High investment in R&D
  • Produced and assembled in more than 20 nations worldwide
  • Risks

Risks affecting MBUSA include:

  • Government regulations for the automobile segment worldwide
  • Ever rising fuel costs
  • High competition from worldwide automobile brands
  • Summary or Conclusion

To conclude, there is no doubt in the fact that MBUSA has acquired good marker position not just in the US but across the globe. The company has been quite successful in increasing the number of customers and productivity levels at a continuous rate. To ensure long-term sustainability the company needs to keep a check on the risks affecting its operations.

References

MBUSA (2016) About Us [Online] Date Accessed: 17/02/2016

IndustryAnalysis

Introduction

To start with, there is no doubt in the fact that automobile industry is growing at the speedy rate all across the globe and offers good information and basis for research. The availability of huge amount of information and speedy progress are the key reasons behind choosing automobile industry for this research.

1.1.State the name of the industry

The US has one among the largest and leading automotive markets across the globe and has around 13 auto producers[1]. From 2008 to 2012, the automobile producers manufactured more than 8 million passenger automobiles yearly within the US. Apart from Honda as well as the leading three U.S. automobile corporations i.e. Ford, General Motors and Chrysler - Nissan, Toyota, Hyundai-Kia, Mercedes-Benz, BMW, Mazda, Subaru and Mitsubishi have also gained good market presence in the automobile segment. All these automobile manufacturers have manufacturing facilities in the US.

1.2.History

Theautomobile sectorwithin the USstarted during the period of 1890s. Due to the size of the home market and adoption of mass-manufacturing, the US automobile industry has speedily progressed as one among the world’s largest. The automobile segment taking in dealerships result in around 3.5% of the gross domestic product in the US. Automobiles and parts developers directly appointed around 786,000 individuals by the closing stages of the year 2012[2].Further, the United States is presently second amongst theleading producers worldwide in terms of volume, with around 8-10 million automobiles produced yearly.

1.3.Trends

The US has one among the biggest and leading automotive markets across the globe and has around 13 auto producers. Taking the case MBUSA, it can be stated that the company could ensure profitability and long-term existence by adopting effective branding, marketing and production approaches. The company should invest a good amount of resources and time in research and development (R&D) to properly understand market trends and buying behavior of the customers.

1.4.Key players

The below table provide an overview of the key players operating in the automobile sector of the US.

Company / Market Share
Ford / 16.1
General Motors / 16.9
Chryster / 13.4
Nissan / 9.7
Toyota / 1.4
Hyundai / 3.9
Mercedes-benz / 1.9
BMW / 1.7

1.5.Economic downturn and recover

Theautomobile sector crisis of 2008was chiefly a fraction of the worldwide financial decline. The crisis impacted Asian and European automobile producers; however it was chiefly experiences within the Americanautomobile production sector. The US automobile segment was deteriorated through a considerable rise in the costs ofthe automobile fuels associated with theenergy crisis of 2003-2008 that brought down purchases ofSUVs (sport utility vehicles) as well aspickup trucksthat hold lowfuel economy. In order to effectively deal with the crisis automobile corporations from the US and elsewhere have implemented creative marketing approaches for enticing buyers[3]. Leading automobile manufacturers offered considerable discounts and offers on their product range. Further, the automobile industry has been quite successful in effectively dealing with the crisis and is now experiencing an upward trend in its sales and profits. This trend is expected to continue in coming years as well.

1.6.Relevant regulations or political factors to consider

There are several political factors that could affect MBUSA. These includetax policy,environmental law, labor law, trade restrictions,political stability and tariffs.

1.7.Risks

The risks affecting the automobile industry of the US that could affect MBUSA include:Augmented software content and electronics

The electronics as well as software content cost in automobiles was lower that 20% of the overall cost years before. But, at the present it is about 35%. More significantly, electronics systems persist to contribute over 90% of the new features and innovations.Product-mix modifications for meeting regulatory needs

Regulatory pressures for reducing overall fleet radiations are gradually adding to auto producers’ costs.Platform modularization

Pressured through customer preference for highly segmented automobiles and requirement for reducing prices for regulatory and competitive reasons, OEMs are increasing the total automobile models they provide and simultaneously decreasing vehicle models upon which they are based, radically enhancing product or service commonality.The altering appearance of retail

Buyers desire a seamless automobile-purchasing experience which takes in the buying decision, insurance and financing — and both dealers and customers are encouraged to enhance the transaction.Conclusion

To conclude, it can be clearly stated from the above discussion that the US automobile is continuously progressing with several leading automobile companies. The industry has shown continuous growth in terms of profits and sales since last several years and is expected to follow the same trend in coming years as well. Thus, MBUSA needs to be highly attentive about the prevailing market trends and customers preferences in order to succeed and ensure long-term profitability.

Recommendation

1.1Summary of facts

There is no doubt in the fact that the US Automobile industry is highly competitive and calls for requires companies to continuously offer its customers unique and exceptional products and features. Same is the case of MBUSA. Although, MBUSA has gained sound market position still there exists room for further improvement. The company could ensure profitability and long-term existence by adopting effective branding, marketing and production approaches. The company should invest a good amount of resources and time in research and development (R&D) to properly understand market trends and buying behavior of the customers.

1.2Financials

From the below table 1 it can be clearly stated that there has been an increase in the sales of Mercedes Benz vehicles in the USA. However, the increase in sales is not that significant and there still exists room for further advancement. Thus, adopting effective branding, marketing and production approaches. The company should invest a good amount of resources and time in research and development (R&D) to properly understand market trends and buying behavior of the customers.

Table 1

1.3Projections

By taking on sound branding, marketing and production strategies the company could surely ensure an increase in its total sales that to at high rate. Investing a good amount of time and resources in research and development (R&D) could help the company to properly understand market trends and eventually result in greater sales.

1.4Growth

Taking into consideration the prevailing trends, it can be stated that the company is expected to grow in terms of sales and profitability both. The company is also expected to extend its operations in untapped segments and ensure excellent buying experience to the customers.

1.5Recommendation

Research and Development

The company should directed good amount of time and resources towards research and development. This would help MBUSA to not only understand prevailing market trends but also help in gaining insight of competitors’ strategies and understanding buying trends of the customers.

Innovative Products

MBUSA should make every possible effort to offer its customers new and innovative products and features. This will help company to ensure that its customers remain with the brand for long and do not switch to any other company.

Decreasing Costs of Dealership Marketing

The company has taken a high leap forward through digitizing all its data as well as developing it into a marketing podium. The company could take it a step ahead through linking its marketing assets with the data. When the dealers evaluate a potential within their marketplace, they could easily arrange marketing collateral straight to buyers on the basis of that information. The company could observe an enhancement in use of its internal marketing collateral that it always prefers its dealers to make use of.

1.6 Implementation

Dealers could also reduce marketing expenses since they would no longer need to depend upon a marketing agent for executing any campaign. Dealers could easily examine their marketplace prospects. Additionally, armed with this information, personnel could operate more efficiently with the dealer associates. Moreover, holding a centralized data source could also assist personnel radically in reducing time spent towards dealer visits.

Tracking Results to Enable Success

For closing the loop” on efforts of sales efficiency, MBUSA should obtain comprehensive reports from IHS highlighting total sales generated by its marketing campaigns. The company could directly evaluate marketing campaign of every dealer with sales which are resultant from the intended lists. In the coming years, the company could link this information together for determining the ROI on marketing spend.

Obtaining Insights into Market Prospects

For improving sales efficiency, the company must properly understand where it is effective and where it is not. With online source of market data, the company could easily assess its sales through segment within their sphere of impact. For instance, the company could set out for improving the sales of C-class within a particular ZIP code through pulling the lists of targeted marketing from system grounded upon outlooks’ within-marketplace status, brand attraction as well as other traits.

1.7 Summary

To conclude, it can be clearly stated that the highest priority at MBUSA has at all times been to offer an outstanding buyer experience. The renowned company’s definition of “buyer” extends afar the buyers who purchase its luxury automobiles to take in its field personnel, dealer associates and stakeholders. This is why MBUSA persistently looks for processes and tools, which would make possible for its dealers as well as field personnel to operate in a smarter and more efficient manner, particularly in terms of chief objectives like sales efficiency. Additionally, the company can further enhance its efficiency and ensure long-term sustainability by taking on the above discussed strategies.

[1]SelectUSA, ed. "The Automotive Industry in the US." Accessed March 09, 2016.

1SelectUSA, ed. "The Automotive Industry in the US." Accessed March 09, 2016.

[3]SelectUSA, ed. "The Automotive Industry in the US." Accessed March 09, 2016.