Mercedes-Daimler: Organization and Governance Structure

Introduction

 Founded in 1926 as Daimler AG, Mercedes Benz is a global automobile brand known for its luxurious automobiles. Mercedes Benz’s goal is to be the number one innovator in the automobile industry, offering high-quality, luxurious vehicles. The lead in innovation, high-end quality, and the brand’s firm footing in Germany and internationally, is what distinguishes the brand from their German Big Three competitors, Audi and BMW (Shahid, n.d.). In Canada, Mercedes-Benz is the number one luxury manufacturer in Canada and has maintained this spot for the past four years consecutively (“About Us | Mercedes-Benz,” n.d.). Mercedes-Benz Canada was established in Toronto, Ontario, in 1955. The corporation has a nationwide network of 11 Mercedes-Benz owned retail operations and 48 authorized private dealerships.

Organizational and Governance Structure

 The Board of Management is accountable for individually managing and representing the organization in transactions with third parties, while the Supervisory Board oversees the appointments of the Board of Management members and supervises management. Affiliation of both boards is restricted, meaning you can not be a member of the Board of Management at the same time as the Supervisory Board and vice versa (“Corporate Bodies | Daimler,” n.d.).               Mercedes-Daimler is currently investigating the strengthening of the Group´s divisional structure through the formation of legally autonomous entities. The motivation on the divisional structure is intended to help strengthen the future of the separate dealings and better utilize the potential for growth and earnings in the various markets. As an automobile producer with international operations, Daimler faces specific challenges to this industry (Daimler,” n.d.).

Technology need

 Digitalization has been a dominant strategic issue in all areas of Mercedes-Benz. Digitalization is leading to fundamental changes throughout the entire automobile industry. Therefore, they are taking a universal methodology to digitalization with an emphasis on the consumer. This primarily implicates the networking of their products and services, for example with “Mercedes me.” Currently, digitalization leads the way for new mobility concepts. Mercedes is leading the way in mobility services, and they offer their customers a number of different concepts for private and professional applications. As a result of the digitization of the entire value-added chain, they are able to make development processes shorter, production workflows more flexible, and distribution routes more direct. This allows them to respond more rapidly and precisely to customers’ preferences(Mercedes-Benz 2015).

Literature Review

 According to Ernst & Young report “The digitization of everything” (July 2011), businesses have finally realized they need to use digital networks to engage with key stakeholders. The challenge for organizations is to face the repercussions of digital change. To deal with challenges the company must develop end to end response.

 According to Accenture study 2016 of consumer’s acceptance of digitalization from 8 countries, it showed that what the future drivers want. The study raised some questions as would they go through the purchasing process of the cars online, what are the factors which may be influential when buying a car online, how customers can define themselves on technology usage, what provides the weakest digital experience in the digital process, what parts of the process they would miss while purchasing the car online. This study also focuses the existing channel or is it ready for the digital consumer, gap between expected & actual behaviour, new business models to bridge the gap & steps to implement the digital touchpoint strategy.

 According to Ernst & Young report “Risk & opportunity in an increasingly digital world” (May              2015), the study discussed some questions on digital transformation, why it becomes a need for the future. This trend started because of the emergence of new technology, changing customer preference, and the advent of new competition. It said that digitalization is both risk & opportunity for the market which is coming with threats of price volatility, lower revenue, less retention, new competitors, distribution problems, channel conflicts & the risk of inaction and cybercrime but at the same time comes with the opportunity new product & services, partnership, better underwriting, pricing, lower operating cost, higher profits, and new opportunities to cross-sell, up-sell and retain.

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 According to the Journal of Direct, Data and Digital Marketing Practice (2015), they stated that to build customer relationships successfully companies need to balance both digital perfection and the human touch. Nowadays, customers are more into using technology and want ease in the process as digital transformation is necessary for the success of businesses, but they also need to ensure that staff retains the human touch. As the digital interface becomes routine everywhere, it will be the emotional, human element in a business relationship that delivers success.

 According to Ernst & Young Report,” Delivering delightful customer experience in Digital World.” Traditional methods are changing very rapidly into digital methods with the help of the advanced gadgets, and the demand of the customers is also matching the same pace with the market. the

 According to Mahesh Murthy, Founder, Pinstorm (2016), The formula to ride on the digital age for auto sector is to build the product/ process effectively & efficiently, then

the only way to drive new product in the market is the fantastic word of mouth publicity from the customers, by quoting Google, Starbucks, Gmail, Facebook, Twitter, Zara, YouTube these companies have never advertised them anywhere and in the current market, they are with 70%-100% market share in their respective niche markets. If people like it, they will buy it, or with that, they will promote it.

Conclusion

 To continue organizational success, Mercedes-Benz must be forward thinkers. This will guarantee business steadiness and set the structure for future developments, extensions, and achievements. An approach that has continued to be vital in the brand and image success is emerging automobile standards through modernizations. Emerging leads to innovation and technology are essential for endurance and future accomplishments. Without instituting goals and objectives, Mercedes-Daimler may never comprehend their full potential in the future market (Daimler, 2012).

 In the initial stage of digitization both the approaches have to go hand in hand with taking advantages of both traditional & digital. To achieve these objectives Mercedes needs to develop strategies to stay ahead of their competitors and preserve their advantage. By executing strategies in new technology, developing new models, and establishing relationships with other vehicle manufacturers, Mercedes-Benz can continue to adhere to the demands of luxury vehicles and a maintain a strong consumer base across the world.

References

• About Us | Mercedes-Benz. (n.d.). Retrieved from https://www.mercedes-benz.ca/en/about-us
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• Daimler at a Glance | Daimler. (n.d.). Retrieved from https://www.daimler.com/company/at-a-glance.html
• Daimler af mercedes-benz. (2012, June 01). Retrieved from http://www.daimler.com/company/corporate-governance/integrity-and-compliance/standards-of-business-conduct
• Ernst & Young, “Digitization of Everything”, How organizations must adapt to changing consumer behaviour, 2011
• Ernst & Young, “Risk and opportunity in an increasingly digital world”, 2015
• Impact of Digitalization on Automotive Industry: Challenges & Opportunities. (n.d.). Retrieved from https://www.researchgate.net/publication/319872692_Impact_of_Digitalization_on_Automotive_Industry_Challenges_Opportunities/download
• Mahesh Murthy, Founder, Pinstorm, “The Formula to Ride on the Digital Wave for Auto Sector”, ET Auto Digital Conclave, Dec 2016

• Prabhjit Didyala, MD, Accenture Study- Automotive & Industrial Equipment, “Use of technology such as virtual dealership to be closer and easily accessible to customers”, Dec 2016
• R. S. Kalsi, ED, Maruti Suzuki, “Relevance of Traditional Dealership in Digital Age”, ET Auto Digital Conclave, Dec 2016
• Shahid, N. (n.d.). Mercedes-Benz. Retrieved from: https://infogram.com/mercedes-benz-1g6qo2qwzje7278
• Strengthening the divisional structure: Daimler Supervisory Board approves first steps | Daimler. (n.d.). Retrieved from https://www.daimler.com/company/divisional-structure.html
• Weihrich, H. (2012). Daimler-benz moves toward the next century: With the tows matrix. European Business Review, Retrieved from http://audibmw.info/pdf/benz/2.pdf