Mercedes Benz: the Input Output Model - Research Paper Example

?   I/O Model         I/O Model The motor vehicle industry is one of the most considerable industries on the globe. This sector creates, designs, produces, markets, and sells a number of vehicles all over the world. In addition, this industry has become one of the most adequate money earners, with manufacture of cars approximated to be past 70 million as at the year 2007 (Henry 2008, p. 11). This paper will apply the input output model to the Mercedes Benz. The paper will undertake an environmental assessment for the motor vehicle sector and, particularly, Mercedes Benz in the United States of America. Demographic Forces For a long period, the baby boomers population has been the foremost intended market for the motor vehicle sector. As such generation is preparing to spend minimal amounts of money on vehicles and retire, the vehicle manufacturers are targeting the younger population (Henry 2008, p. 22). Mercedes Benz is turning its attention to people aged between 25 and 45 years. This is because members of this population bracket are perceived to be able to buy the luxurious vehicles. Currently, Americans are buying large and luxurious cars because they want to feel classy. Economy The motor vehicle industry has a tremendous effect on the economy of the United States. Investigations carried out by the Center for Automotive Research and the University of Michigan indicate that the motor vehicle industry is the main utilize of vinyl, computer chips, lead, steel, iron, copper, plastics, aluminum, and textiles. Mercedes Benz has made a tremendous contribution to the growth of the American economy. Mercedes Benz is one of the most prominent quality luxury automobile makers in America. The company’s a large percentage of sold vehicles contributes to the country’s gross domestic product. Nonetheless, the escalating inflation rate has reduced the purchase of these luxurious vehicles (Henry 2008, p. 26). Technological Forces Technological components have had a tremendous bearing on the motor vehicle industry (Henry 2008, p. 29). Currently, numerous car buyers prefer utilizing the internet to find out about vehicles before making purchases. Other people utilize auto websites prior to a test drive. Mercedes Benz has several internet sites which they utilize to market and advertise their products. The technological advancements has enhanced efficiency and reduced costs. Mercedes Benz also makes sure the market is conscious of new car models through print media. The company has also attempted to manufacture alternative fuel automobiles. They are focusing on luxurious but fuel-adequate vehicles. Also, Mercedes Benz workers arguably have the most efficient technical skills. Social Factors Tendencies in social factors have an impact on how a company functions and the demand for the products of a company (Henry 2008, p. 37). Mercedes Benz has transformed a number of its management strategies to conform to the social trends such as demographics, population growth, and health consciousness. For example, Mercedes Benz mostly design luxurious vehicles, and people who drive these vehicles are presumed to be wealthy thus able of occupying certain positions in the society. Those individuals who drive vehicles designed by Mercedes Benz presumably feel nice about themselves. Political and Legal Forces Government regulations and laws have had an impact on the motor vehicle industry since the 60s. Almost all of the government regulations and laws emerge from customers escalating concerns for safer vehicles and the environment (Henry 2008, p. 41). For instance, in 1975, The Energy Policy and Conservation Act stated that all vehicles should meet a specified mileage per gallon. In the period, 2010, Merced Benz Company changed its marketing policy and concentrated more on producing safer vehicles instead of manufacturing luxurious or environmental friendly cars. The safety components comprise blind spot detection elements, lane assists, night view assists, attention assists among other features. Tax policies have also impacted the production of these luxurious cars. Physical Forces Physical forces such ecological issues try to safeguard the environment form costs linked to production and utilization of vehicles. Environmental experts focus on social cost of using vehicles instead of the client’s personal costs (Henry 2008, p. 63). Mercedes Benz has designed vehicles taking into consideration environmental components to enhance its image and to cope with generic competitors such as Toyota. Global Forces Global forces such as the impact of consumer movements, social responsibility, cultural dissimilarities, and alterations in the profile of the demography have implications for the motor vehicle industry (Henry 2008, p. 65). Client behavior illustrates the procedure that takes place when they want to buy a vehicle from Mercedes Benz Company. These factors have a significant effect on Mercedes Benz’s marketing decisions. Competition Mercedes Benz is facing stiff competition from a number of car manufacturers which include BMW and Toyota. There have been speculations that Mercedes Benz’s profits may not reach the capacity it did in 2011. The management has indicated that the earnings will decrease as production continues. In contrast, BMW has asserted that its corporation’s profit will continue to augment. The competition between these two rivals has indicated that although individuals may dream of owning a Mercedes Benz vehicle, a large number of them are purchasing BMW. This is because BMW is consistently enlarging its mini brand of undersized vehicles while Mercedes Benz continues to focus on luxurious and expensive cars, (David 2003, p. 53). Also, Toyota is producing cheaper and more environmental friendly cars than Mercedes Benz. Toyota is the leader in manufacturing hybrid vehicles. They also manufacture numerous vehicles so that they can be afforded by the people. Resources Used to Implement Strategies Mercedes Benz has numerous assembly plants in America. It utilizes an identical manufacture system as that of Japan. Nonetheless, it emphasizes technological creativity and safety when implementing its strategies. Mercedes Benz utilizes the ‘one man one engine’ rule, which guarantees that the manufactured engines are efficient and strong. The company utilizes research as well, such as hydrogen power research to deal with fluctuating gas and oil prices. Mercedes Benz actively works with the print media and internet to implement its strategies. Various websites and magazines are used to market and advertise their products (David 2003, p. 61). Organizational Decision-Makers Johann Jungwirth has been the leader of Mercedes Benz from the year 2009. Johann Jungwirth, the chief executive officer and president of Mercedes Benz is responsible for the organization’s decision making, research and development activities in America. Brian Fulton, chief executive officer of financial services also contributes to the organization’s decision making process. He has enhanced customer and dealer satisfaction in the US. Other people who take part in Mercedes Benz’s decision making process include the different heads of department (David 2003, p. 79).   References David, F 2003, Strategic management: Concepts and cases (9th ed.), Pearson Education, New Jersey. Henry, A 2008, Understanding strategic management, Oxford University Press, New York. Read More