Jessica Alford, Sharita Garmon, & Charlene Singleton

 Cars fulfill many roles in our lives: class status & transportation  Cars are expensive and are relatively durable products  Consumers in America spend billions of dollars every year Objectives  Analyze Mercedes Benz and Ford  Highlight competencies  Evaluate current strategies  Suggest new strategies

 In 1891, William Morrison created an electric carriage in Des Moines, Iowa  1893: Internal Combustion engine: Frank Duryea motorized a truck  Duryea singlehandedly made 13 internal combustion vehicles in his first year of operation  1896: Production of automobiles for the public market  William Metzger: first car dealer by way of Detroit  New England was the first world capital of automobiles  1905: Michigan, Detroit claimed its throne in 1905 due to its remarkable natural resources  Henry Ford has been known to first mass-produce the automobile.  GM: world’s largest automotive seller  Countries known for manufacturing: Japan, Germany, and the United States  Most popular car in America?? (TC-hybrid)

 Economic Forces Bad economy; lower sales  Social, Cultural and Environmental Forces New fuel efficient cars are expensive; negative effects  Political, Legal and Governmental Forces Trade barriers: Restrict Free market  Technological Forces Robotics: decreases demand in labor  Competitive Forces Fuel the economy

 Degree of rivalry;  Threat of substitutes  Barriers to entry  Buyer power  Supplier power.

 Fairly mild  Numerous other forms of transportation  Independence  Convenience and utility  Monetarily  High population densities e.g., walking, mass transit, bicycles, etc.) can be less costly than automobiles and thus alternative modes of transportation are often preferred.  social and cultural attitudes  “ The American Dream”

 Entering the automotive industry are substantial.  Startup capital required to establish manufacturing capacity to achieve minimum efficient scale is prohibitive.  Established companies are entering new markets through strategic partnerships or through buying out or merging with other companies

 Powerful buyers who are generally able to dictate their terms to their suppliers.  There is not a grand proliferation of companies  Automotive parts (e.g., oil filters, mufflers, belts, etc.)  Backward integration.  Ultimate consumers are purchasers of finished vehicles  Consumers exert the greatest power in this relationship due to the fairly standardized nature of the automotive commodity  low switching costs associated with selecting from among competing brands.

STRENGTHSWEAKNESSES  Strong brand recognition  Upholds quality standards while maintaining tradition.  Innovative, futuristic designs.  Translates to consumers as a luxury item or symbol of status.  Company is extremely globalized.  Prices aren't as competitive as other high-end brands.  Does not remain current with popular trends among consumers.  High maintenance costs.

 Gotlieb Daimler and Carl Benz  Merged in 1925 using symbols from both companies. Daimler-Benz AG  1980’s Mercedes-Benz became the first to comply with CO2 regulations.  The first company to incorporate ABS and ESP systems into its automobiles.

 Founded in 1903 by Henry Ford in Dearborn, Michigan  1908 the Model T was introduced and went on to sell over 15 million vehicles  1956 company went public and since then has grown to be a significant presence in the global automotive market.  Brands: Ford, Lincoln, Mercury, Mazda, Aston- Martin, Jaguar, Volvo, and Land Rover.  Ford has a finance division, a parts and service division,  Currently own Hertz Corporation, the largest car rental business in

 Rising costs of commodities, namely steel and energy, have increased manufacturing costs considerably  Sales are especially lagging in the profitable SUV and truck markets where demand is dropping due to escalating gasoline prices.

 Need to reestablish their market share, particularly in the U.S. domestic market.  Increased its hybrid vehicle production, an attempt to position itself as the domestic leader in the rapidly growing hybrid market in the U.S.

STRENGTHSWEAKNESSES  Stability and Predictability  Brand Recognition and Loyalty  Recovering Sales Growth  Global Presence  Saturated Nature of Business

Above figure establishes strengths and weaknesses within the automobile industry and how heavily they weigh between the two companies in the Competitive Profile Matrix (CPM) Overall product quality is the most important success factor. Company adaptability is the least important in this matrix. Ford Motor Company Mercedes-Benz Volkswagen Critical Success FactorsWeightRatingScore RatingScoreRating Score Product Quality Aesthetics Price Competitiveness Market Share Customer Loyalty Company Environmental Adaptability Fuel Effeciency Total

Mercedes FORD VW High Class Affordable Class Conservative Sporty

 More adaptability/flexibility within infrastructures.  Challenging previous methods Going against tradition  Luxury vehicles with more fuel efficiency  General consumer brands with higher quality standards