Eos mercedes benz

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  • Mercedes-BenzCompany Analysis & Recommendations 5180026 5180372 5180574 5180676 5280020 5280379

History Mercedes Benz Thailand was first registered as Mercedes Benz Marketing Thailand company in 1998 The companys goal is to establish import and to deal with Benz automobile business, which used to be controlled by TAAP (Thonburi Automotive Assembly Plant Co., Ltd) At the beginning, they emphasized on Branding and Marketing before going full scale on importing and selling cars. They merged with the Benz Daimler Group and the Chrysler Group in 1999. The name of their joint-company was changed to Daimler Chrysler, which also sell Chrysler and Jeep. In 2007, the companys was renamed again to Mercedes Benz Thailand after the Daimler AG sold 80.1% share of their stock to the Chrysler Group. Structure Daimler AG (The worlds largest manufacturer of Mercedes Benz vehicle in Germany). Mercedes Benz Thailand (MBTH) Mercedes Benz Leasing Thailand (MBLT) Mercedes Benz Manufacturing Thailand (MBMTh) Mercedes Benz Thailand (MBTh) MBTh provides: marketing and selling, research and development, maintenance, repairs, and after sales service. Mercedes Benz(Thailand) LTD., has a network of 31 authorized dealers that were established throughout the country. There are 17 branches of authorized dealers located in Bangkok, and about 14 branches located in countryside. Most car parts and accessories are imported from DAG and DSEA (Daimler in South East Asia). Cars that are completely imported will be charged with extremely high tax of about 169-300%. Cars that are assembled in Thailand will be charge with lower tax of about 94-189%. Therefore, MBTh emphasizes on this type of market. MercedesBenz LeasingThailand (MBLT) MBLT was found in 1996 as one of the leading financial firms that provides financial services for Mercedes Benz cars in Thailand. They aim to support the business of Mercedes Benz Thailand by providing credit to Mercedes Benz distributors in Thailand and other services such as: Hire Purchase which allows their customers to purchase Benz cars with a down payment of some proportion and pay the rest by installments with same rate Operating Lease - this service allows customers to rent Benz cars with the exact price and period of time. The cars will need to be returned at the end of the deal. Finance Lease - the cars will be rented to customers with fixed price and duration. After that period of time, customers can decide to own the cars at a price, subtracting depreciation cost, set by the finance officer. MercedesBenz ManufacturingThailand (MBMTh) MBMTh was founded in 1998 as the firm that company that provide importation, assembly, and distribution. The Product line of MBMTh can be categorized into: Hatchback A- Class B- Class E- Class Estate CLS- Shooting Brake Sedan C- Class E- Class S- Class CLS- Class Sport SLK- Class CL- Class SL- Class E Coupe C Coupe Off-Road G- Class M- Class Van Vito Viano MB100 Supercar SLS- Class Porters Five Force Model Industry Competitors The Intensity of Rivalry Threat of New Entrants Bargaining Power (Suppliers) Bargaining Power (Buyers) Threat of Substitutes Industry The industry competitive structure is consolidated The growth rate of the market shows that the demand condition is increasing dramatically in the past 4 years The increasing of the industry growth rate encourage the rivalry and competition for market share and revenue Intensity of Rivalry Intensity of Rivalry Industry growth Value ( Millions) Units of cars sold Source: Bangkok Post, Bangkok Biz, Manager Market Growth Rates 2009-2012 2009 2010 2011 2012 CAGR 6.59% 31.65% 3.58% 44.76% Market Value 30,800 40,548 42,000 60,800 Units Sold 7,700 10,137 10,500 15,200 Thailand GDP Growth Rate -2.3% 7.8% 0.1% 5.5% * Market Value ( Millions) Intensity of Rivalry Source: Bangkok Post, Bangkok Biz, Manager Competitors There are 3 main companies that are dominate in this market in this industry which control approximately 86% of the market share in year 2012; Mercedes-Benz, BMW and Volvo Intensity of Rivalry Mercede s-Benz BMW Volvo Others 2010 Mercedes -Benz BMW Volvo Others 2011 Mercede s-Benz BMW Volvo Others 2012 Source: Bangkok Post, Bangkok Biz, Manager Positioning of key players Intensity of Rivalry Classic Prestige Comfortable driving experience The Best or Nothing Ultimate Performance Sporty The Ultimate Driving Machine Safe and comfortable drive Volvo for Life Intensity of Rivalry Exit barrier for automotive industry The exit barrier for this industry is considered very high Capital investment There would be huge capital invested in both building the brand equity and the constructing the manufacturing plant For manufacturing plant, there are few companies that invested in manufacturing base in Thailand due to the fact of complexity in cooperate and signing contract with the Thai government Mercedes-Benz manufacture in Daimler Manufacturing BMW manufacture in BMW manufacturing Thailand Volvo manufacture in Thai-Swedish manufacturing Cost and penalties Cost of establishing the authorize dealers network High redundancy cost Cost of hiring the labor Employment contract Severance cost Penalty fee It would be difficult to exit if the firm have already sign a contract with the suppliers Intensity of Rivalry : Trends Downsizing is now the trends where manufacturers use a smaller engine but yet more efficient or introducing a small yet luxury segment (ex. BMW series 1, Mercedes CLA) BMW no longer sending out there famous straight six, instead there offer more efficient four-cylinder engine Downsizing has become the flavor of the decades Most of the highline luxury car manufacturer has introduce hybrid technology To save the environment and to introduce a fuel efficient vehicles and use sustainable materials as part of manufacturing The new technology to serve the environmental issue and downsizing the car. This cause the SUV market to decrease down Intensity of Rivalry High entry barrier Few dominants players in market It is very difficult to enter to this industry (luxury car) since the players such as Mercedes-Benz and BMW had already dominate the Thai market Capital requirement Capital requirement of building the brand of luxury car, in term of expense and time consume, is very high Cost of constructing the showroom High marketing expense to create the brand identity toward Thai customers Economy of Scale (EOS) Car production is difficult to reach the economy of scale Tax Tax policy of imported car is very high (317%) Threat of New Entrants Threat of New Entrants Grey dealers, Low entry barrier (Exceptional new entrant) Permission and requirements To open a grey dealer, no official permission from the selling brands require Implementation cost The cost of establishing the grey dealer is relatively low No standard format require Gap in the law allows grey dealer to import the automobile with a lower tax rate around 210%-300% Some dealers sell the car on credit (Dealer receive money before handing the actual car to the customer) Economic instability of Europe The depreciation of EURO currency make it cheaper to import the cars Threat of New Entrants Competitive strength of Grey dealers Tax benefits Grey dealers have the ability to import with lower tax rate and take fewer time Customization Availability of customized options for customer to choose Ex. Harman Kardon Stereo, Special Leather seats, mirror roof Better operating system The operating system is flexible No standard price, focus more on price competitiveness No requirement for after sale service Bargaining Power (Suppliers) The bargaining power of suppliers is higher over Mercedes-Benz Few suppliers and substitutes Product that suppliers sell to Mercedes-Benz has few substitutes and is vital to the manufacturing process Raw material such as Advance alloy steel, carbon fiber are imported from the European countries It is very important to maintain the relationship with the suppliers. This is because, it would be very difficult for Mercedes-Benz to backward integrate to the sourcing process Not authorize Mercedes-Benz Thailand is not authorize to select the supplier by themselves without the permission from the head company Bargaining Power (Buyers) The emerging of Japanese cars in the mind of consumers: The bargaining power of Mercedes-Benz towards the emerging of Japanese car in the mind of customers is consider to be low Perception In the past people think that European cars are better than Japanese cars in terms of quality and service provide to customers Nowadays, the perception has been change. Japanese car provide better quality of the car they produce with great before and after services, also the maintenance cost is much cheaper Price With affordable price that comes along with standard quality, customers choose to buy what is worth for their money (value) Eg. Camry Hybrid, Honda Accord, Nissan Teana etc. There are some series of Mercedes-Benz car that are risky to be takeover by the top Japanese car models Eg. A-Class and C-Class People can use the money they have to pay for one standard Mercedes-Benz C-Class ( 2,250,000) to buy the top series of Honda Accord with full options and still have money in their pocket. Bargaining Power (Buyers) Strong brand image in luxury cars industry : Mercedes-Benz has higher bargaining power in terms of the strong brand image in luxury cars over the consumers Top of mind The brands that stand out of the customers minds when thinking about luxurious cars are Mercedes-Benz and BMW Mercedes-Benz has a long history in Thai automotive industry The first Mercedes-Benz that had been import to Thailand is in the year 1920, it is owned by King Rama 5 at that time Convenience There are only few brands in the luxury cars industry in Thailand that have many authorize dealers and showrooms to provide services to