The opportunities and threats section will be generated from Mercedes-Benz's PEST (Political, Economic, Social, and Technological) analysis (Strickland & Thomson 2004).
Mercedes-Benz has become synonymous with luxury cars. In a global scale, the name enjoys strong brand equity among consumers (Daimler Chrysler 2008). Mercedes-Benz is known to be the best symbol of luxury in automobiles.
Armed with the heritage of pioneering innovation, Mercedes-Benz continues its quest of bringing the best products in the market through the use of advanced technology including its Smart cars portfolio. The company's primary objective is to "set new standards in the global automotive industry" (Daimler Chrysler 2008) which they accomplish by embarking on intensive research aimed at identifying and responding to anticipated customer needs and demand. Mercedes-Benz is passionate in shaping the "future of mobility" (Daimler Chrysler 2008) through the introduction of more efficient cars. Mercedes-Benz makes use of Advanced Design Studios in order to develop cutting edge designs (Daimler Chrysler 2008). Technology which produces inputs quickly and at high precision is also being utilized in car design and manufacture.
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of the company to become a socially responsible entity is integrated in its effort in creating modern cars which are less damaging to the environment. Mercedes Benz boasts of being the first automaker to run the most tests on fuel cells in its commitment of having zero emission mobility (Daimler Chrysler 2008). Other efforts are aimed at offering the best working environment for all its employees and environment friendly automobiles (Daimler Chrysler 2008).
Secondary in the Mercedes-Benz's set of objectives are maintaining investor relations through profitability. However, the division has been having recent financial blows which can be attributed to the deterioration of its image in the world market (Landler 2005). During 2005, investors have been weary of the company's financial performance as Mercedes Benz reports only 2 million during the last quarter compared to the 784 million it recorded in the same fiscal period (Landler 2005). The declining performance of the stock of its parent company in the market is another indication of its deteriorating financial performance (Figure 1).
Figure 1. Stock Price of Mercedes-Benz's Parent Company Daimler Chrysler
(August 2007 to July 2008)
The weak financial performance of Mercedes-Benz in the market can also be an indication of having not enough funds to allocate to the company's endeavor. Failure to become profitable will further push stock price down.
As stated in the previous section, Mercedes-Benz has been recognized as a symbol for luxury. Ironically, one of its pressing problems is in the aspect of product quality. During the late 1990s and early 2000s, it has been noted that the quality of Mercedes-Benz's passenger cars has been in question as indicated by the result of objective measures (Edmondson