Mercedes Benz Aav

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Mercedes-Benz AAV
1. What is the competitive environment faced by MB?

The competitive environment faced by Mercedes Benz is one filled with many different car manufactures and car models. Mercedes has several competitors in terms of price and quality on all of their product platforms. Historically, Mercedes biggest competitors have been Lexus, BMW, Audi, and Cadillac. The economic downturn coupled with the restructuring of domestic auto manufactures has shifted Mercedes competition. In recent years there is gaining popularity in domestic vehicles. Rather than just competing with luxury automobiles, Mercedes is now competing with newly designed domestic automobiles, including those manufactured by Jeep and Ford. These vehicles are listed at a slightly lower price point than most Mercedes but offer many of the same features and reliability once only offered by luxury brands. In addition to the initial cost savings of these domestic vehicles, regular service and maintenance is substantially lower than that of luxury vehicles. This competitive environment requires that Mercedes continue to manage costs for all new and existing products while upholding their long reputation of delivering quality products. It also requires that Mercedes consistently develop and introduce new products to stay current and suit changing markets.

2. How has MB reacted to the changing world market for luxury automobiles?

Mercedes Benz struggled with product development, cost efficiency, material purchasing, and problems in adapting to changing markets in the early 1990s. In reaction to the changing world market for luxury automobiles Mercedes has made several changes within its business. Mercedes has streamlined the core business, reduced parts and system complexity, established simultaneous engineering programs with suppliers, and developed a new range of products. In 1993, Mercedes introduced the all new C-Class to its line up of vehicles. In the years following, Mercedes introduced several other product lines to accommodate the demand for luxury cars which included the E-Class, the SLK sportster, and the A-class and M-class AAV. The introduction of the AAV was the first sport utility vehicle manufactured by Mercedes in reaction to research conducted by its team members. The AAV was developed after team members at Mercedes compared existing product lines with various market segments to determine opportunities for Mercedes. The analysis revealed opportunities in the expanding SUV market for a high-end SUV, a market in which Mercedes had no presence.

In addition to creating entirely new product lines and entering the SUV market, Mercedes also created vehicles within its luxury product lines that targeted the upper-end of the luxury automobile market. They have managed to do this in all of their existing product lines. As the market demanded super luxurious automobiles, Mercedes delivered. In their sedan line, Mercedes not only offers the moderately priced (for a luxury vehicle) E-class sedan but also the Maybach, which is the most expensive sedan on the market. The same is true in both the SUV and sports car product lines. Mercedes consistently reacts to the changing world market for luxury automobiles by introducing or updating entire product lines.

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.3

Mercedes Benz ranks higher than Jeep, Ford, and GM in all three of the area’s discussed in Cooper’s chart. Below are the factors in which Mercedes Benz competes with other automobile producers as ranked by Cooper’s cost, quality, and functionality chart:

Quality – Mid-Upper Range – The Mercedes brand has gained ground in quality and is now at the upper range of the quality chart, surpassing all auto manufactures except Lexus. This was not always the case with Mercedes. In the late 1990’s – early 2000’s Mercedes...
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