Mercedes-Benz is a German automotive company that dates back to the early 1900’s. In 1901, Karl Benz started the Mercedes-Benz company. Though he had previously built his first automobile in 1886, The Mercedes-Benz brand was not established till 1901. In the first year of the company’s existence, Karl Benz released his first Mercedes. The European market did not gravitate to the idea, thus it had very little success. With limited success, Karl Benz decided to merge with Daimler to help develop a better automobile. In 1926, they released the Mercedes-Benzida brand name. In 1958, Mercedes-Benz made a deal with the Studebaker-Packard Corporation to distribute the cars in the United States. In 1963, the Studebaker-Packard Corporation failed and most dealerships converted over to Mercedes-Benz.
Though Germany is the birthplace of Mercedes-Benz, the vehicles are manufactured or assembled all over the world, in such countries as Canada, Mexico, China, India, South Africa, United Kingdom, Thailand, Brazil and the United States, just to name a few. There are some countries that fully manufacture the vehicles completely from locally built parts. Mexico, United Kingdom and the United States are such countries. Other countries, such as India, Brazil, South Korea and Vietnam specialize in building commercial vehicles, while other countries specialize in sport utility, luxury and high performance. Still, with manufacturing and assembling been done in many different parts of the world, Mercedes-Benz continues to be a leader in the automotive industry. Being that Mercedes-Benz is global, there are different types of market and legal systems that must be taken into consideration when determining where Mercedes will set up shop. The type of market system is important because it sets the price levels of goods and services that ultimately determine the supply and demand. The legal system is equally important because the differences in the legal systems can affect the attractiveness of a country as market or investment site. The business practices of a country are regulated by the laws. Let’s take a look at Canada. Canada is one of the wealthiest nations, and its economy is the 10th largest in the world (“Is Canada a Market Economy”). The economy of Canada thrives off of agriculture, manufacturing, energy and the service sector. The market system that exist there is somewhat mixed. The government helps the market in order to maintain the economy there. The market is one which allows owners of capital to produce whatever quantities goods and services for which they believe there is a market for. The market also allows for owners of Mercedes-Benz 4
capital to sell their goods and services at whatever price the market provides, and this is without government interference. Within Canada’s Market system, government does have the authority to step in when they feel the market is not working appropriately. China’s market system is much different than that of Canada. Up until 1978, China had a closed economy. Now, with China being the fourth largest country in area, it has opened up its market to international trade. Even still, it is considered an emerging economy due to income levels falling into the lower to middle levels (2010. “China Market Economy”). Mexico is another country with a large Mercedes-Benz presence. Not only does it manufacture parts for the automobile, it also has an assembly plant. Mexico has a free market economy system. Its market system is primarily dominated by the private sector, though industry and agriculture do play a vital role in Mexico’s economy. State owned businesses in Mexico are declining rapidly....