The bargaining power of suppliers: daimler benz is a large scale operation that holds close ties with all of its suppliers. Most of which are closely located and who have done business with daimler benz for many years. An example of how respected daimler benz is in the eyes of its suppliers, can be seen during the economic downturn of the late nineties when daimler benz hit trouble and was forced to negotiate prices down. This was achieved, and displays how suppliers are equally dependent on daimler benz as daimler benz is on its suppliers. The bargaining power of buyers: there are a very large number of buyers for daimler benz and their power is relatively small.

In order to purchase a mercedes benz one must have assets as mentioned in the market segmentation of reasonable wealth. A business executive for example is the one who has the assets to buy a mercedes benz not a part time employee in a mcdonalds. With around 25 30 dealerships in each country or state daimler benz reaches all its customers, through an excellent network that ensures their satisfaction therefore reducing their bargaining power. The buyers are not buying in bulk like in the retail industry where bargaining power is high, they simply can afford one or not. The threat of potential new entrants: the markets that mercedes benz operates in are characterized by economies of scale, where as the level of sales increase unit cost decreases.

Also mercedes benz has a wide range of cars to jeeps and each of them are different as they know their customers and also offer special levels of after sales service which also create barriers to new entrants. Capital requirements are high in the car manufacturing industry, for a new entrant it would require huge amounts of investment in technology, plant, distribution and service outlets. Over the long established existence of mercedes benz, customers have become loyal, in general, a customer who previously bought a mercedes, will buy another and the same applies to a bmw customer. As mentioned above mercedes benz has distribution channels globally, so that customers are able to view new models, and make purchases of mercedes benz products. Daimler benz knows the car market extensively well and has confidence in its operation due to its expertise. In mercedes benz case it holds good relationships with the government due to their economic contribution and their military aerospace ventures. In the luxury segment there is a counted number of competitors, and although the threat of substitutes is low the future growth of that segment might attract new entrants.

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The threat of substitutes: over the last few years toyota has managed to introduce its way into the luxury car segment. What toyota did with success, is it introduced lexus, high end luxury sedans and coupes. This did pose some threat to all the luxury car producers because lexus offers everything that a mercedes benz, a jaguar, a bmw etc. This was the only way it could steal a small portion of the market through price competition.

Buyers who could not afford a mercedes benz now had the choice to save some money on the purchase of a. Conclusion bibliography select and organization of your choice and present critical internal and external environmental analysis based on the following tasks: give a meaningful definition of the contexts of business strategy and discuss a company’s external environment using porter’s 5 force analysis and pest analysis. Lo 1 discuss the company’s internal environment using value chain analysis and swot analysis. Lo 2 review the existing strategy or strategies practiced by this company and propose a better strategy for this company based on available options. Lo 3 business environment is both of the internal and external environmental factors related to a business, this is with the aim of finding out what are the factors that’s affect the business and the effect of such environmental factors may either be positive or negative.

In the business environment it has two components, that is internal environment and external environment. Internal environment culture in place in the organization and the corporate structure and the external environmental factors include the competition, consumers, and location and government regulations. And what is the important of business environment? all of the successful management must be capable of adapting to the environment, the knowledge of the environment helps in capitalizing emerging opportunities, activating management, image building, and basic of strategy, intellectual stimulation and continuous learning. Mercedes benz is the first of petrol powered car, the benz patent motorwagen and its patented in january 1886.

To get a better services and product we need a business strategy, business strategy is a document that clearly express the direction of a business will pursue and the steps it will take to achieve its goals. Basically business strategy can divided into two types that are strategic analysis and business planning. Strategy analysis is pest analysis, porter 5 force and swot analysis and the business planning process is planning, evaluation, selection and implementation. The strategy analysis we will discuss in following task and now i will briefly explain what the business planning process is. The first is planning, if we want to purchase a new car, we have to plan before we buy the new car, because it has many different types of brand in the market.

Besides that, we have to plan what car we want to buy, in the market got four wheels car, saloon car and many more and we also need to plan for what the price of car we planning to buy. For example, abu is planning to buy a new car and he is planning to buy a saloon car. Evaluation is analysis of data in order to assess the strengths and weaknesses of programs, policies and organizations. Example of evaluation is if abu want to purchase a new car between mercedes benz and bmw, he has to evaluate the weakness and strengths between the two brands of car and abu also need to decide what he more prefer to use and which is more useful for him. Selection is after evaluating the product individual will select the best products and services of them. For example, after abu evaluated the two different type of car, the selection of abu is purchase the brand of mercedes benz.