A Competitive Advantage is a peculiarity for an organization between it's competitors . It's achieved either by lowering prices or by greatening the value of the product or by offering luxury service and benefits to cope with high prices . Competitive advantage is the point of power for any organization as it is the point from which an organization can maximize it's profits if it's been planned for it well . The more prospective the competitive advantage the more it becomes hard for it's advantage to be neutralized . Question One : The industry of Automotive is considered one of the industries that needs high Capital and needs a large workforce or a large amount of work in relation to output. It's costs goes mainly on it's materials , …show more content…
This prestige added somehow an advantage to the company . Mercedes always relied on forecasting statically the market it's operating in. It uses modern informational & comminucational technology to control the process of customer's transaction using this information in making decisions . The payback time, net present esteem and return rate computations found in the financial statement of Mercedes won't apportion assets to extend until the point where it becomes widely investigated budgetary data information. Mercedes doesn't only seek for horse power & top speed , it also seeks for taking care of engineering and designing parts . It's a joyful thing to ride a fast car that can go from 0 to 70 in 50 seconds but your car won't be a good performer unless all it's parts are taking a good care in their details . Mercedes is a power that's always on demand ; a unique performance , excellence in rides , comfy design , economical fuel consumption & also safety …show more content…
Another strategy is Being defensive ; Defensive strategies are relatively close to Differentiation & Cost leadership . This method helps in keeping all the advantages in one place once they are attained . This strategy is considered as an actual one as it limit competitors ability to offer a business opposition . One more strategy is Alliances ; There is a very small line between alliances and collusion . So it should be taken a good care from crossing this line . Collusion is when two organizations within the same industry work together in the same field mostly in order to make control on prices . Alliances is like joint ventures of the business . It's used in pooling the resources also in the detriment of different contenders not in the partnership . Another way is focusing on the benefit ; it should always focus on the features and the benefits of every single part in the car . Be always aware of new trends that may affect on the profits for example ; new technology as it should always cope with the latest technology found in market
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2.Competitive Advantage – It includes the best product of an Organization in the competitive market.
The three main competitive strategies are cost leadership, differentiation, and price strategy. Cost leadership focuses on acquiring raw material of the highest quality at the lowest price. In return this company can lower production cost with the goal of being the company with the lowest production cost in the industry. Differentiation strategies allow companies to make their products stand out from the others. Differentiation can be actual or perceived. Actual differentiation occurs when the company creates products that are not available elsewhere. Perceived differentiation takes a lot of marketing and advertisement to convince the consumer that this company’s product is superior. Price strategy includes a variety of strategies that cause a particular product to be marketed at the lowest price possible. Price strategy includes skimming where companies set a high initial price only to turn around and lower it. Bundle pricing occurs when several products are offered for one price. Promotional pricing allows other incentives to buy such as buy one get one half off. Using the pricing strategies causes many consumers to actually purchase more believing that they are receiving a “deal” while the company is still profiting. Competitive strategies are always used by companies and are often used together. Companies that understand how to combine competitive strategies fare much
Competitive advantage exists when a firm has strategy, product or an attribute that makes the firm capable of delivering similar benefit to that of competitors at a cheaper cost. Having competitive advantage is not enough the company should be capable of sustaining that particular competitive advantage for a longer period of time.
Mercedes-Benz is a brand that is well recognized around the world and it was rated among the top ten most recognizable brands in the world by "Business Week Magazine". “Ever since inventing the car in 1886, we’ve simply never stopped reinventing it.” –Mercedes Benz. They has a history of making history. Since the first car, they has set the pace for what all the cars might someday become. On the consideration of firsts in safety, performance and driving enjoyment, it’s an exciting roadmap to the future. And while there’s a never-ending roster of new achievements, there’s only one reason the world's first automaker remains first in innovation. When it started international production, for the last decade it has successfully established itself in a lot of international production due to the increase in demand and in the attempt to reduce cost and that has improved the sales of Mercedes-Benz.
Mercedes-Benz operates on the differentiation strategy. Luxury, prestige and technological innovations drive the company 's production from the high quality small cars and e-bikes of the smart brand, to the premium automobiles of the global corporation.
Competitive advantage is that a company has better ability in earning profit and profit growth compared to its competitors for the same group of customers in one industry.
Competitive advantage(CA) is an advantage competitors gain by providing or offering customers or consumers greater value for their money through product and service differentiation or through lower prices. Maintaining competitive advantage is crucial to many businesses or organizations' success in order to survive in the market. Competitive advantage is characterized by superior performance which could be an attribute to outperform the competitors whether current or potential; or gaining a higher market share in a particular industry thereby ensuring market leadership; or ultimately, maximization of profit.(JOBBER 2010)
Once a company is capable of producing goods at lower costs than the market price within the industry, the company earns profits and it has a competitive advantage. This advantage gives a company an edge over its rivals and an ability to generate greater value for the firm and its shareholders. A company can also achieve a competitive advantage if their core competence is
Although Mercedes Benz marketing strategy used to focus on safety, precision engineering of its cars and safety, they had to make sure that the Mercedes’ cars would suit the customers’ changing attitude. Now, they focus more on fun loving, energetic and approachable side of Mercedes Benz in their marketing. When its market expanded this caused an evolution in its marketing strategy. Mercedes Benz has found that they have to expand their market by including younger customers. Slicing prices to make the product more affordable was one of the marketing strategies also.
Competitive strategy is the moves and methods that the firm has taken and is taking to appeal buyers, improve its market position, and to endure competitive pressures. The strategy is about what a firm’s capability to try to knock off competitors and attain competitive advantage, which can be offensive or defensive. There are three approaches to competitive strategy, which are low-cost leadership strategy where struggling to be the overall low-cost manufacturer in the in industry. Moreover, pursuing to distinguish one’s product offering from competitors (differentiation strategy), and the last one is focus or niche strategy where aiming on thin portion of the market rather than the whole market (Porter, 1998).
There are five generic business strategies that companies choose from when trying to successfully compete within their respective industries. This is the first choice a company must make, even before deciding an overall strategy. These generic business strategies include low-cost provider strategy, broad differentiation strategy, best-cost provider strategy; focused strategy based on low costs, and focused strategy based on differentiation. These strategies have many advantages as well as disadvantages. Choosing which one to use depends on what market position a company wants to pursue. Deciding to be more offensive or defensive also plays a role in choosing a
“Competitive strategy involves positioning a business to maximize the value of the capabilities that distinguish it from its competitor’s” (Porter 1980:47). A successful business plan requires first and foremost the formation of an appropriate strategy. Through the implementation of a suitable strategy, the company is able to obtain its own industry niche and gain an understanding of its customers (Porter 1985). Whichever strategy is adopted it must be adequately integrated within the firms goals and missions to achieve a competitive advantage (Parker and Helms 1992).
In this modern hypercompetitive marketplace, a company must be a powerful competitor to survive. A company must possess a powerful strategy in order to become a powerful competitor. But what makes a good strategy for the company?
The increasing numbers of sub-model cars can also affect the brand quality through increasing any risk issues once launched to the public. Furthermore, according to (Stephen, 2004) Mercedes customers have high expectations about the high quality promised by the company. In 2003, the company disappointed many customers when they sold over 2000 vehicles with an extra option for a navigation system, which were not ready to be delivered at the right time, also accompanied by other mechanical issues. On the other hand, the company made an announcement about its new high quality hydraulic breaking system, which increased its competitiveness in terms of safety and quality against other competitors in the industry.