Daimler AG is a German automobile supplier which is the thirteenth greatest car manufacturer on the globe. It is the largest truck supplier as well. The company was founded in 1883. The existing brand collection includes the world's most effective auto brand, such as Mercedes-Benz, Smart, Maybach, Freightliner, Mitsubishi Fuso, Sterling, Western Star, Detroit Diesel, Setra, Orion and Thomas Built Buses. Daimler AG can be an automotive group with a commitment to excellence, and aims to achieve sustainable progress and industry-leading profitability.
2. The current business strategy of Daimler AG
As a company, they should review external and inside analysis to gather the info to innovative the business strategy that will help the company to accomplish its goals. On this part, I'll give a short identifying business strategy, and then I will evaluate business strategy of Daimler AG.
2. 1. What is a business strategy?
A successful business's foundation is business strategy. Therefore, the business strategy means that it'll require more in how a business can compete in market and can get successful. It also focus on the way the company can gratify the customers' need, gain advantages over rivals and exploit or create new opportunities.
Business strategy has four aspects: the product-market investment strategy, the client value proposition, property and competencies and functional strategies and programs (Figure 2. 1. 1)
Figure 2. 1. 1 AN ENTERPRISE Strategy
Where to Complete
The product- market investment decision
A BUSINESS
STRATEY
How to Compete
Value Proposition
Assets& Functional
Functional area
Strategies & programs
Product market investment strategy
Product market investment strategy means where to compete. Quite simply, a company should think about the opportunities and risks of the whole market and identify the business enterprise scope of the organization. On the other hand, dynamic is more important than business opportunity. It means that organization should think about what product will be dialed up or down, interior and external financial resources and some non-financial resources such as business plan, equipment, etc. There are some choices can offer to commercial:
Use more investment to grow the business or enter the merchandise market
Use investment to keep the current position
Use a tiny investment to dairy business
As Daimler AG, it is demonstrate obviously its business opportunity. Daimler AG offers the automobile product. Lately, Daimler AG has been increasing their investment to increase their company. For instance, Daimler AG invests the money to a fresh field which is electronics ability vehicle. Also, Daimler AG and its own strategy partner North american car machine Chrysler also create hydrogen petrol cell car can make an effort to use it in the next generation vehicle. According up to now, Daimler AG has a specific decision about the merchandise investment.
The customer value proposition
The customer value proposition is "the recognized functional, emotional, communal ore self-expressive gain that is provided by the organization's offering (Aaker, 2005). " The value proposition should be highly relevant to customer and then your result can represent in to products' placement and services. Value proposition should be maintain very long time to aid the strategy. The customer value proposition has some elements such as:
Great value
Good product quality
A global links and reputation
Wide product line
Good innovation
Daimler AG has a good customer value proposition. The merchandise has a good invention such as gadgets vehicle or hybrid power vehicle. Its product is valuable because they may have many types of car can provide to customers and meet the customers' needs. Also this point can demonstrate Daimler has a wide products. As we realize Daimler-Benz is the car which is image of customers' position. Everyone who lives in this world has learned Daimler's car. Also Daimler - Benz is the favourite car of the business man. Therefore, Daimler AG has a good reputation in both company and its own products.
Assets and competencies
This tactical belongs to sustainable competitive advantages (SCA). The proper competency is what corporate unit does indeed well or which is important to the business. The strategic property is kind of resources such as brand name. Belongings and competencies are incredibly hard to accomplish.
Daimler AG is the most significant automobile manufacturers on earth. They have got many resources can perform its primary competency. For instance, Daimler AG and Chrysler create a fresh brand DaimlerChrysler and develop a hydrogen energy cell car. It is much valuable and unusual in automobile industry. It is also a good competitive benefit can be sustained. Besides, the trustworthiness of these two companies is the intangible reference can support the strategy relative to competitors.
Functional strategies and programs
Functional strategy is "a strategy that uses making the most of resource to accomplish commercial and business unit goals and strategies (Wheelen & Food cravings, 2010). " Resources and competencies or customer value proposition should support the some strategies. These strategies include:
Manufacturing strategy
Marketing strategy
Distribution strategy
Brand building strategy
Communication strategy
Information technology strategy
Global strategy
Quality program
Customer relationship program
Daimler AG has a good practical strategy in many parts. Firstly, it has a suitable marketing strategy. Daimler AG is a car manufacturer; its car has a good quality. Therefore, they use skim costs in market strategy. Daimler AG also has a very strong R&D strategy. Daimler AG is a technical head in this industry. They use the new technology to keep up the competitive benefit. Also, brand building is vital to Daimler AG. They spend additional money in its customer romance and quality. The goal of these is increasing the brand consciousness and gives a solid brand name to the client.
2. 2. The patterns of the Daimler's activities
Every company has its value chain (Amount 1-2). It includes a lot of things: raw materials, operations, warehousing and circulation, marketing and sales, and service. These are primary activities of the company. Also there are a few support activities: purchasing, R&D, individual resource management and company infrastructure such as general management, proper planning, etc. Each products of company also offers its own value string.
Figure 2. 2. 1 The Generic Value Chain
Source: Kilde: Porter: Competitive Advantage, 1998
According to the worthiness chain, I am going to analyze the actives of Daimler AG. To begin with, I will review the support activities.
Support activities
Procurement is the first aspect of this part. It means what activities or strategies the company use within purchasing recycleables, machines, equipment. Daimler AG has a strong bargaining power as a buyer in this industry. They need many steels to make car. Alternatively, Daimler AG invests more income in technology development. Research and development always play an important role at Daimler. At the moment, R&D is more important than ever before. Daimler give the accelerated tempo of scientific development and the difficulties by environment safety. In 2009 2009, Daimler invests 4. 2 billion in R&D part.
Human resource management of Daimler is trying to reduce staff capacity. Daimler use diversity management to connect with its corporate culture. For instance, Daimler tries to increase roughly 12% female professionals in higher management positions by 2020. Daimler also has various prizes for health management activities. On the other hand, Daimler has high standards of training and additional training. For example, by the end of 2009, Daimler experienced trainees 9, 151trainees. In Germany, they employed 2, 341 new trainees in 2009 2009. Daimler also provides a carrying on education to its employees. Most employees who work in Daimler can acquire new knowledge in them free time. In 2009 2009, Daimler invests 207 million in working out and continuing education of its employees in Germany.
In organization infrastructure, Daimler AG has good strategy. You will find four strategic focus areas to use it: "1) Operational superiority and a culture of high performance, 2) Growth of central business in traditional market sections and utilization of new opportunities on the regional basis, 3) Further development of ground breaking and customer-oriented services and technology, and 4) Developments and implementation of home based business activities in related areas (Daimler twelve-monthly survey, 2009). " Matching to these four strategies planning, Daimler AG desires increase their consciousness in the market. And they also want to provide a higher service to their customers. Besides, Daimler use the new technology in home based business area such cross car field.
Primary activities
These activities are basic area for a firm. This part is vital to Daimler AG. Daimler has high require because of its raw materials since it wants to give a high quality car to customers. The majority of suppliers are partner with Daimler AG. Therefore, it can't be manipulated by Daimler AG. Besides, Daimler AG has a broad distribution channel in whole world. Daimler AG also offers a strong service to the customer. They have got many 4S shop in many countries. The marketing communication strategy of Daimler AG is also strong. The customer can get the information of product from many press such as professional journals, TV advertisement or outdoor advertisements.
According to the information, Daimler AG has many competitive advantages in the industry. Some elements are incredibly valuable such as high quality product and good services. Some of them are incredibly rare including the technology of hybrid car. Therefore, Daimler AG can preserve their competitive benefit in car industry.
The operations of business strategy development
Basing on the existing business strategy deployed by the business above, this part will describe the processes through which the strategy identified has been developed. The conceptual structure work shown in Number 3. 1 may be used to identify and position corporation components and their connections. The center of structure work is a couple of four key constructs that describe the business: composition, system, people and culture. The amount includes strategy, which must efficiently connect to the four corporation components and organizational performance.
External Analysis
Strategy
Internal Analysis
Performance
People Structure
Systems Culture
Figure 3. 1 A Construction for Analyzing Organizations
Structure
Organizational framework defines lines of specialist and communication and specifies the mechanism by which company duties and program are completed. Organization framework of Daimler AG is high authorities and highly decentralized. It really is considered as the business's intangible tool. The sustainability management at company contains Panel of Management, Sustainability Table and Sustainability Office.
The decentralization in the Daimler Company is reflected in that there is absolutely no concentration of ability in an specific but is approved by the organization. With regards to the range of responsibility of professionals at various levels, they'll make related decisions. Dr. Dieter Zetsche is a Chairman of the Panel of Management Daimler AG, concurrently Head of Mercedes-Benz Vehicles. Board of Management is accountable for the development of group and corporate and business strategy that building the company's goal to become among the finest companies of the industry on sustainability.
The restructuring of the mother board and the supporting office is to help the coordination of the relevant systems in the company and the top decisions from all models. The Sustainability Board's responsibility is to investigate and evaluate the activities of Daimler as well as make a memorandum. Furthermore, in order to provide second view, it aids the Plank of Management by dealing with any office of Sustainable.
Figure 3. 1. 1 Sustainability governance structure
Source: Sustainability Article 2010
3. 2 Systems
Several management systems are strategically relevant. Included in this will be the budgeting/ accounting, information, dimension and prize and planning systems.
Accounting and Budgeting System
Accounting and Budgeting are fundamental elements in virtually any management system and tangible resources. The chance that these systems cannot be designed to the needs of a new strategy can be quite real. An accounting and budgeting systems that is well conceived possesses valuable historical data might not exactly fit the reorganized structure required by the new strategy. Regarding to Company Total annual Report 2009, Daimler put in 4. 2 billion committed to research and development for the study of innovation, safeness and environment. In there, Daimler added 1. 95 Billion to market the sound capital base and spend money on new technology development of automobile. Moreover company put in 210 million to get for future long- term in safeguarding.
Information System
The information system and the technology, database, models and expert systems on which it is based can fundamentally have an impact on strategy. Daimler AG comes with an information system "Automotive Legislation online" which gives useful information about legal requirements and knowledge of worldwide legislation on the look, manufacture, approval and use of motor vehicles. Database of standard legislation is update online everyday with important rules of the largest markets such as European countries, USA, Japan and China. In addition, Information on the screening device is stored in GOTIS - GSP Online Technics Information System. So when customer access Information for Recovery Services, will provide a thought of comprehensive security for cars.
Planning and measurement
To be able to start the process, all the necessary resources have to be prepared. It offers dedication to planning, collection of appropriate personnel, data collection, implementation time and determine the procedure used. R & D office of the company will be in charge of its. Research and development plays an important role in Daimler to make sure that they continually be proactive and control development in automotive industry. Through research activities, Daimler can forecast movements as well as customer desires and needs for future flexibility. Then it'll be integrated into the product by engineers specializing in research and development of company. An R&D group might well have a research team that report both to the business unit also to the R&D director. The concept of dual record requires coordination and communication that may be nerve-racking and costly but it also provides the flexibility needed to offer with a fast moving market. The management mother board is in charge of confirming to the supervisory table about business policy and issues related to the business implementation of the company's business in future.
3. 3 People
A strategy is generally based on an organizational competency that, in turn, is dependant on people. Thus, strategies require certain types of people. For each strategy, it is important to know how many people, with what experience, depth, and skills, are need for:
Functional areas, such as marketing, processing, assembly, and finance
Product or market areas
New product program
Management of particular types of people
Management of a specific kind of operation
Management of expansion and change
According to Annual Survey 2009, "Personnel capacities altered to lessen demand. Variety management anchored in Daimler's corporate culture. Various honors for health management activities. Ongoing high specifications of training and further training".
Due to the problems of the monetary environment, in 2009 2009, there is a significant drop popular for workers because of the modification of the workforce of the business. As a result, the number of workers employed by Daimler worldwide fell 256, 407 on December 31, 2009. The most significant workforce reductions were implemented at Daimler vehicles; the number of employees at that department fell by 8, 716, with 5, 315 job, Mercedes- Benz 4%, Vans 8% and Daimler buses decrease by 5%. There was 4% decline in total labor force of Daimler Financial Services and 3% in Sales and Marketing Firm. Company agreed on a package deal of measures targeted at minimizing labor costs and protect job. The collective bargaining contracts on working hours have never been reduced through short-time work preparations.
Although company need to decrease labor but the company has learned how to inspire the morale of personnel. Daimler AG can take the benefit of the variety of the labor force to create company's future success. All of the personal skills, abilities and skills employees will be highly liked. When employees are valued, they can promote their ability to create impressive products that help company improve client satisfaction. To ensure enough source for future engineers, the company has used technological education to secures and promote young talent. Daimler AG also has many various ways to deal with new employees such as attend job fairs, online job market or structured the recruitment event. The company has recruited young people qualified for careers worldwide. By the end of 2009, the company possessed 9, 151 trainees worldwide. Trainees who perform well subsequently receive reasonable job offers; Daimler chosen 89% of its trainees in 2009 2009 (2008: 93%). The concentrate here's to highlight the opportunities in which talented young individuals may find their role in shaping the future of mobility. This can be regarded as tangible resources of Daimler AG.
3. 4 Culture
Company culture can be viewed as general acceptance, trust and the standard behavior of a business. Company culture make a difference how people live and action, and they determine what is normal, and the way to handle different. Because people work in different cultures so they have different behaviors and various ways to work. Therefore, the change in corporate culture can make people work better and favorably so culture can be viewed as as intangible reference. Daimler AG has implemented different management procedures in accordance with local requirements and specific social characteristics. The company doesn't have the variation of technology, gender or contest. The opportunities for females improved because the company has created a proper balance of male and female, particularly in older management positions. Women accounted for 13. 1% of the Daimler AG labor force at December 31, 2009. The percentage of women in positions of top management would increase from current levels to about 8% to 20% in 2020 (Annual Statement 2009). Daimler AG has place the prospective corridor annually to achieve this.
