Statement of Problem
Mercedes developed the A-class car for themid-market thatfailed the Moose test that verifies the sound performance of the car in the market.Such has been a problemfor the companysince it put the brand image of the company at stake, hindering itsnew strategy to tap and target the mid-tiermarket through its new car offerings.
Secondary issues:
- Since the company developed a mid-tier strategy from luxury to middle target segment, such failure of the test questioned the quality benchmarkof Mercedeswhile catering the new market.
- It developed negative brand image in the market that may hinder the sales of the Mercedesitself and the adaption ratio of its new car in the market.
- Since the company initiallydistributed thecars, such test results demandedthe company to call back or offer the replacement to the customers, causing greatfinancial loss.
- Moreover, since the managementremained quiet on the issue for a period of time, such created a strongnegativeimage in the market causing people to think such failure as a deliberate action of Mercedes.
Mercedes and the Moose Test Harvard Case Solution & Analysis
SWOT Analysis
Strengths
- The company has a strong brand image in the luxury market, making it aviableplayer in the market, allowing it toleverage its brand image in entering into the new markets.
- The company pursues continuousinnovation, allowing it to offer value and experience to the customers, leading to the development ofstrong brand loyalty.
- The company is financiallystrong, allowing it to invest into different market segmentssimultaneously.
- Mercedes has a strong brand positioning in themind of the customers, allowingit to pursue continuous innovation,leading to strong marketdevelopment.
- In addition to this, the company has a strong researchand development department, allowing it to incorporate the latesttechnology and customer trends in the product development phase, leading to the development of distinct market strategy and thus, a strong competitiveedge.
Weaknesses
- The company has weak control over theexternal market, leading to development of rumors that mayaffect the brand equity ofMercedes.
- Since the company offers extensive customer care and services, it caused it to bear high cost of customermanagement.
- The company solely depends on the external suppliers to distributeits cars in the market, leading toincreased supplier power over the company.
- Since the company is a globalbrand, a smallincident in the local market globally affectsthe overall supply chain of the company, causing great lossanddevelopment of negative brand image.
Opportunities
- Mercedes has a strong opportunityto enter into the emerging markets with its new Mid-tiermodel. Such will offer great market share andbrandspread, leading to substantialoperations.
- Since the US is also seen to have strong demand for affordable cars, it will create the new gateways for the company to enter into sucha segment, capturing thevalue and marketshare.
- In addition, since the companydistributes through dealership programs, it may develop a forward integrationsstrategy that will help it to manage the demand distributionandsupply of its cars efficiently in themarket, leading to effectiveinventory management andthus, overall cost of theoperation.
- Moreover it has the opportunity to pursue the strategic alliances with the other technological players offering it the capabilities and resources to develop a sound production system, incurring lowest cost,thus,increasing the maximum profits levels.................
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