DESCRIPTION OF GENERAL DETAILS OF THE FIRM AND

ORGANIZATION CHART

• Headquarter: Stuttgart, Germany• Production: Argentina, Austria, Bosnia and

Herzegovina, Brazil, Canada, Egypt, Ghana, Hungary, India, Indonesia, Iran, Malaysia, Mexico, Nigeria, South Africa, South Korea, Thailand, Turke, United Kingdom USA

• Products: Passenger cars, Trucks, Buses and vans, Utility vehicles

• 1886 the first car was developed• Foundation: 1887• Founders: Gottlieb Daimler

Karl Benz• 1894 first serial production• Cooperation of: Mercedes (Daimler) and

Benz because of bearing the crisis, until the 1926’s unification.

• 1928 the first formula 1 car(“Silber Pfeil”) was built

• Cars for middle and upper class. They try to offer high quality cars at good relation price-quality. Prices vary depending on the model you are to buy.

• Their cars are always on the edge from a technological point of view since they have been produced with the best technological tools.

COMPETITORS

Their strongest competitors come from the luxurious car’s market.

Mercedes is supposed to be the strongest one in its field.

Main Competitors: - BMW

- Audi

- VW- other car manufacture companies (Jaguar,

Opel (GM) Porsche...

STRATEGY FOLLOWED TO GET A COMETITIVE

ADVANTAGE

THE STRATEGY FOLLOWED BY MERCEDES BENZ TO BECAME LEADERS IN THE CAR MARKET ARE:

DIFFERENTIATION VERSATILITY BROAD SCOPE

THE PORTER’S GENERIC STRATEGIES:

THE DIFFERENTITATION STRATEGY (horizontal axis) THE COST LEADERSHIP STRATEGY (horizontal axis) STRATEGIC FOCUS AND SCOPE (vertical axis)

 

Vertical axis:

FOCUS

Horizontal axis:DIFFERENTIATION // COST LEADERSHIP

1. DIFFERENTIATION

INVOLVES MAKING OUR PRODUCT DIFFERENT AND MORE ATTRACTIVE THAN THOSE OF OUR COMPETITORS.

1. DIFFERENTIATION TO MAKE A SUCCESS OF A

GENERIC DIFFERENTIATION STRATEGY, WE NEED:

1. Good research, development and innovation.

2. The ability to deliver high-quality products or services.

3. Effective sales and marketing

REASONS:

1. Reduce costs (labor, taxes, tariffs, etc.)

2. Improve supply chain

3. Provide better goods and services

4. Understand markets

5. Learn to improve operation

6. Attract and retain global talent

GLOBALIZE DIFFERENTIATION

DRAWBACK:HANDICAP

BEING UNIQUE

2. THE COST LEADERSHIP STRATEGY REDUCING ITS ECONOMIC

COSTS BELOW ITS COMPETITORS

THE ABILITY OF A VALUABLE COST-LEADERSHIP COMPETITIVE STRATEGY TO GENERATE A SUSTAINTED COMPETITIVE ADVANTAGE DEPENDS ON THAT STRATEGY BEING RARE AND COSTLY TO IMITATE.

VERSTILTY

THIS DIMENSION IS NOT A SEPARATE STRATEGY PER SE, BUT DESCRIBES THE SCOPE OVER WHICH THE COMPANY SHOULD COMPETE BASED ON COST LEADERSHIP OR DIFFERENTIATION.

THE FIRM CAN CHOOSE TO COMPETE IN:

THE MASS MARKET WITH A BROAD SCOPE, A DEFINED, FOCUSED MARKET SEGMENT WITH A

NARROW SCOPE.

MERCEDES BROAD SCOPE

3. FOCUS OR STRATEGIC SCOPE

QUALITY FUNCTION DEPLOYMENT (QFD)

Customer Room (What customers want)

This is the “voice of the customer” Done With focus groups Must be what customers want and not

what builder wants

Engineering Room

This is the HOW room, How can each customer attribute be measured and evaluated by the company.

Integrator room

These are the What's’ in rows and How's in columns

This s the relationship room Described in 3 ways:

Strong moderate and weak

Competitors room

This room assesses how well we are meeting customers requirements

Tester Room

Technical priorities Relationship and importance to customer

The Attic

About quality cost analysis

(http://www.kaner.com/qualcost.htm

)

Content Definition quality cost Different types of Quality cost analysis

○ Prevention costs○ Appraisal costs○ Internal failure costs○ External failure costs

Benefits by analysis cost of quality Risks by analysis cost of quality

Definition

• Quality Cost:

- It is represented by the costs encountered in:- preventing - finding - correcting the defective work

- They represent in general a significant amount

- It is affected (reduced) by Total Quality Control.

Prevention costsThe costs encountered in the activities

preventing poor quality.

Examples:

Staff trainingEarly Prototyping/Requirements analysisClear Specification/unambiguous documentationEvaluation of the development tools that will be usedCoding errorsDesign errorsMistakes in the user manualsDadly documented or unmaintainably complex code

Appraisal Costs:• The Costs encountered in the activities

aimed at revealing quality problems.• Examples:

Design reviewTesting the raw materialsQuality controlTraining testersTest automationUsability testingPre-release out-of-box testing by customer service staff

Internal Failure

Failure costs are Costs that result from poor quality:

•Bug fixes•Regression testing•Wasted in-house user time•Wasted tester time•Wasted writer time•Wasted marketer time•Wasted advertisements •Direct cost of late shipment •Opportunity cost of late shipment

External Failure Costs Customer service costs Cost of patching a released product distributing the

patch Examples are:

Lost sales Lost customer goodwill Discounts to resellers to encourage them to keep selling the

product Warranty costs Preparation of support answer books Investigation of customer complaints Refunds and recalls Coding / testing of interim bug fix releases Shipping of updated product

Risks

• Implementation Risks– Not being realistic and trying to achieve too much

too soon.– Controversial costs should be left aside, especially

the first few times the company is trying to implement the quality-costs analysis

• Other risks:– Looking only from the point of view of the

company, not looking at the customer’s costs – Might result in other types of risk:

• Customer Dissatisfaction• Litigation

Benefits• The goal is to reach minimum quality costs at the desired outgoing quality

level. • It’s a feed-back mechanism: quality costs data is used by the management to

make decisions that will impact the quality costs.• Applications of Quality Costs

– Measurement Tool:• Quality costs provide comparative measurements for evaluating

quality programs– Process-Quality Analysis Tool

• Quality costs can serve effectively as an analysis tool and point out where the problems are

– Programming Tool• Quality costs determine how the available resources to be divided

– Predictive Tool• Quality costs can also be used to evaluate and assure performance in

relation to the goals and objectives of the organization.

Operations technology in Mercedes Benz

Operations technology in Mercedes Benz

Products Technologically innovators

Technology used to manufacture these products

CAD in Mercedes Benz

Two kinds of softwareMechanical and engineering orientated

softwareDesign in itself software

Production Technology

The cad design has to be integrated in the machine.

Numerical controled Robots

Internet & more corporative Software

Web page informing aabout their services, new releases and news.

www.mercedes-benz.com

In 1995 they firmed aa contract with IBM to support all the corporative software. (accounting, net, design)

DESCRIBE A PROCESS IN OUR FIRM USING ANY OF THE

TOOLS FOR PROCESS DESIGN.