Mercedes-Benz Company’s Value Chain Design

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Mercedes-Benz Company

The automobile manufacturer Mercedes-Benz was founded in Stuttgart, Germany, in 1926. The company originated from the idea of engineer Karl Benz but was produced together with Gottlieb Daimler at his manufactures. Today it is a globally recognized brand in the sector of luxury automobiles and other motor vehicles. Two engineers had an equal share in the company, and it was due to the combined efforts that they managed to create the automobile unique in its quality, that it nowadays remains one of the distinctive marks of high quality (Clarke, 2005). The company’s objective today is combining long-existing tradition, automobile quality, digital innovations in the production process, and luxurious design.

Mercedes-Benz Products

Mercedes-Benz is most famous, of course, for the automobiles. Nevertheless, they manage to produce all sorts of other motor vehicles, including buses, trucks, and vans. Since the 1990s, Mercedes-Benz management decided to make generalizations concerning the nomenclature of the vehicles’ classification. Therefore, the system of classes was introduced to all the factories, research and production centers. The objective of introducing classes, each of which contains a letter and a numeric code is to make the unique indications for all the models Mercedes-Benz ever produced.

At the moment, there are classes A, B, C, D, E, G, K, L, R, S, and T, as well as some models with the special design features that do not relate to any of the indicated categories. Among them, there is hybrid class for hybrid electro-diesel engine or turbo class for the vehicles with the turbocharged engines (“Mercedes-Benz”, 2016).

The latter models that form separate classes are not produced at the massive scale for now. However, there has been an increase in demand for the diesel-powered cars. It includes both those vehicles that belong to the class D and the models of hybrid automobiles which engine can work on both diesel and electric power (Venturi, Mohrdieck, & Friedrich, 2013).

The compact cars are included in the classes A and B vehicles. In the category of class C automobiles, there are mostly those models that owned Mercedes-Benz the reputation of the luxury brand. The initial C itself refers to cabriolet shape of the vehicle. It is one of the most famous and recognizable car body styles.

Whereas D refers to the diesel-powered vehicle, the initial E stands for the capacity for the fuel injection. In such a way, if the indicators E or D are absent in the name of the automobile model, it means that the car has just a regular engine powered from petrol (Greiner, Doerr, Nauerz, & Graeve, 2004). The letter G stands for the model called Geländewagen and other vehicles in the same series, with the similar body shapes. The letter K in the name of the model refers to the shortened or compressed parameters of some parts of the vehicle. The initial L stands for the lightweight cars, whereas R refers to the racing models. The class S includes a number of subcategories, the most know of which would be the sport cars (Venturi et al., 2013).

Other areas of production that the company in which the company is involved are the production of bicycles, motorsports, as well as a lot of resources that are invested in developing new models and working on new designs.

Two crucial points on which Mercedes-Benz is working today, are the environmental status of the vehicles, attempts to shorten the emissions, and the entirely digitalized model of manufacturing that is a brand new advancement in the automobile industry.

Configuration of Resources Suppliers

Given the wide range of the types of vehicles that Mercedes-Benz produces, it is no wonder that the company supplies automobiles, buses, vans, and other vehicles for the different purposes worldwide. The main strength of the brand is its diversification. Not only Mercedes-Benz has a spectrum of models that covers all areas of both passenger and commercial transportations.

It also covers the areas related to the car manufacturing. Thus, other services offered by Mercedes-Benz include different sorts of financial, leasing and insurance operations concerned with the vehicles. It other words, the set of Mercedes-Benz’s assets in different areas related to the motor vehicle is so wide that the company often operates the process of production from the scratch, with the minimum number of suppliers.

However, the production process has many stages, and it can be logistically challenging to produce all the vehicles in one place. Therefore, the company managed to organize the process of manufacturing worldwide in order to lower the logistical costs. However, at the same time, it means that they have to work with the smaller local suppliers and distributors in some situations.

Factories

The location of the company’s factories has to have the strategic purpose. In many cases, the installation of any new plant or factory of Mercedes-Benz is linked to the potential emerging market in the country where the factory is built. In such a way, there is a number of brand new Mercedes-Benz factories in Brazil, Russia, Asian countries (including China and India). Potential market targets are mostly highly populated countries with the growing economies. The combination of those two factors can potentially create a successful appeal for Mercedes-Benz products.

Either they can be those that are considered luxury products or the vehicles meant for the commercial or public transportation. Apart from that, Mercedes-Benz continues to improve its positions on the automobile market inside the US by developing and expanding its production in Alabama and Florida. The 415,000 square-foot production facility was opened in the latter, which brings the manufacture to the entirely new level (Basch, 2010). Also, given the company’s plan to digitalize the production process, it is fair to expect the introduction of new production facilities that would function according to the new strategic model.

Warehouses

As a rule, Mercedes-Benz has large production facilities in different parts of the world that at the same time, can serve as the part of the logistical network because some automotive parts are stored there. Nevertheless, Mercedes-Benz presupposes a low level of the individual plant, factories, and warehouses management. In other words, the management is rather centralized, so the logistic chain and the storage units are merely supplementary elements of the Mercedes-Benz’s production process.

Distributors

There was a number of controversies recently concerning the distribution of Mercedes-Benz cars in Argentina. The German manufacturer Daimler AG, under which label Mercedes-Benz still operates, however, denied the allegations relating to the unlawful distribution.

Nevertheless, Mercedes-Benz US operates with the help of individual distributors within the US, organizing the trade of the vehicle both through the larger facilities around the country, including Alabama, Florida, California, and Delaware and with the help of smaller distributors. The same principle the company applies for the distribution in other countries (Silberman, 2015). The third-party distributors are involved when logistically it is not profitable for the company to sell the vehicles through its own facilities.

Technical support centers

The recently introduced model of the digital revolution in Mercedes-Benz’s production also “applies to the way [the company] makes contact with our customers” (“Mercedes-Benz sets out to digitalize value chain”, 2015, para. 5). The innovation technologies, in this respect, have to be quite promising. However, for now, the company has a wide range of customer assistance services, including contacting per telephone, email, postal mail, chat, or fax (“Mercedes-Benz”, 2016).

Engineering design

In terms of customer appeal, Mercedes-Benz has a large spectrum of designs. The vehicles produced under the brand name vary in their transportation purposes and outer looks, as well as the engineering aspect of the production. As it was previously pointed out, the company attempts to digitalize the manufacture to make the designs more efficient and accurate (“Mercedes-Benz sets out to digitalize value chain”, 2015). Another concern of the company is to minimize the environmental damages. Given those facts, the engineering goals of Mercedes-Benz today are to shorten the emissions and reorganize the manufacturing due to the new entirely digitalized model.

Sales office

The headquarters of the company is in Stuttgart, Germany. Depending on the level of the company’s geographical presence in certain countries, there are different numbers of local sales offices. In the US, they are usually attached to the major production facilities (“Mercedes-Benz”, 2016).

Communication links

The ways customers can contact Mercedes-Benz include getting in touch per telephone, email, postal mail, chat, or fax (“Mercedes-Benz”, 2016). There are different services for customer assistance, service improvement, customer suggestions, etc. The managerial structure of the company is centralized, which means that the feedback from customers gets to the central office of the company.

In conclusion, Mercedes-Benz is a leading automobile manufacturer that seeks to combine the traditional quality with the innovative approaches in production, and meets the standards of value chain evaluation.

References

Basch, M. (2010). Mercedes-Benz opening 415,000-square-foot facility near Jacksonville airport. The Florida Times Union. Web.

Clarke, C. (2005). Automotive production systems and standardisation: from Ford to the case of Mercedes-Benz. New York, NY: Springer Science & Business Media.

Greiner, J., Doerr, C., Nauerz, H., & Graeve, M. (2004). The new 7g-tronic of Mercedes-Benz: Innovative transmission technology for better driving performance, comfort and fuel economy. SAE transactions, 113(6), 283-293.

Mercedes-Benz sets out to digitalise entire value chain, from design and development to production. (2015). Autocar Profesional News Desk. Web.

Mercedes-Benz. (2016). Web.

Silberman, L. (2015). The End of Another Era: Reflections on Daimler and Its Implications for Judicial Jurisdiction in the United States. Lewis & Clark Law Review, Forthcoming, 1(2) 15-22.

Venturi, M., Mohrdieck, C., & Friedrich, J. (2013). Mercedes-Benz B-Class Fuel Cell: The world largest hydrogen vehicle fuel cell fleet experience. In Electric Vehicle Symposium and Exhibition (EVS27), 2013 World (pp. 1-11). Barcelona, Spain: EVS27.

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