Strategic Management

[Name of the Institute]Strategic Management

Introduction

"Mercedes-Benz Vans Goes Global" growth strategy: product offensive in Europe, model changeover in Latin America, and two-brand strategy in North America. Daimler's Vans division plans to continue last year's positive developments in 2012 and 2013 by achieving further increases in unit sales, revenues, and earnings. The foundation for future success has been laid by the strategic approach employed at Mercedes-Benz Vans, which focuses on three areas: exploitation of all growth potential in traditional markets, penetration into new fast-growing markets, and technology leadership in combination with an attractive product portfolio. "In addition, our Mercedes-Benz Vans Goes Global growth strategy is accelerating our business development not only in Europe but also in the U.S., Latin America, China, and Russia.

The main goal now is to achieve annual global unit sales of more than 400,000 vans by 2015," said Volker Mornhinweg. Daimler's Vans division plans to expand its lead in Europe by entering the rapidly growing segment for small vans. The division's all-new Mercedes-Benz Citan will round out the product portfolio here before the year is over. The Citan is designed for commercial customers and will initially be offered in different lengths and weight classes. This modern city delivery van will be launched in the fall of 2012 to coincide with the IAA Commercial Vehicles Show.

The Citan also happens to be the first vehicle to hit the road as a result of the strategic partnership between Daimler and Renault-Nissan. "The trend toward small vans for use in flexible and versatile urban logistics systems offers our division a huge opportunity," said Mornhinweg. "The market volume for such vans in Europe alone now stands at approximately 700,000 units per year, and that number will rise. Our new Citan was designed to help us achieve a market share of 4% to 5% precisely in this segment and to fully exploit all the available growth potential.

Discussion

Mercedes-Benz Vans has had a strong presence on the Latin American market for decades and is the leading premium manufacturer in the region (Weihrich, 1982). The division sold 13,600 units in Latin America in 2011, an increase of 9% compared to the prior year. At the end of last year, Mercedes-Benz Vans shifted the production operations at the Centro Industrial Juan Manuel Fangio plant in Argentina (near Buenos Aires) to the current European Sprinter series and raised the manufacturing capacity accordingly. The Sprinter is offered mainly as a bus variant in Latin America in order to benefit from the rapidly rising demand for passenger transport vehicles. Mercedes-Benz has also now begun manufacturing in Argentina the OM 651 diesel engine, which is already available in Europe.

These projects had a total investment volume of more than Eur 70 million. Mercedes-BenzVans' clear goal at the moment is to increase van sales by more than 30% in Latin America over the next five years. Mercedes-Benz Vans also remains on course for success in North America, where it is systematically forging ahead with its two-brand strategy for the ...