PRESENTATION ON TAMING THE ELEPHANT: Turnaround of Mercedes- Benz India Limited

Amit Shrivastava

INTRODUCTION

COMPANY BUSINESS

Mercedes-Benz India Limited

Automobile Manufacturing

CEO-Owner
LOGO

Mr. Juergen Ziegler

Universal motorization symbolizing On land, on water and in the air Daimler Benz (51%) & Telco (49%) Over 200 countries

STAKES
OUT LETS

INTRODUCTION

PRODUCTION LOCATION

104 world wide

HEADQURTER IN INDIA

Mumbai

1st Mercedes Benz in India

PREMIUM BRAND

Was E-class W124

Mercedes Benz known for its technical perfection, quality standards, innovative car legends

TURNAROUND MANAGEMENT
The present business scenario is one where in constant change is the name of the game. For any firm to survive in any industry, there has to be constant monitoring and improvement of its systems and operations

Process of bringing about a revival in the firms fortunes is what is termed as Turnaround Management.

3 PHASES IN TURNAROUND MANAGEMENT

Phase I: Watching out for the danger signal Phase II: Choosing appropriate Strategy

Phase III: Implementation of the change process

PHASE I: WATCHING OUT FOR THE DANGER SIGNAL

Decreasing constant rupee sales Decreasing profitability

Lack of planning
Inflexible CEO A management team unwilling to learn from competitors.

PHASE II: CHOOSING APPROPRIATE STRATEGY

1. Strategic Turnaround o Enter into a joint venture with Telco. o A new way to compete in the existing business ( by launching Mercedes Benz E class) Under this the first choice Increases market share Making product market relationship

2. Operating Turnarounds
1. Asset reduction strategies 2. Revenue increasing strategies 3. Combination strategies

PHASE III: IMPLEMENTATION OF THE CHANGE PROCESS

Implementation plays an important role in any turnaround management. Identification of an appropriate strategy by itself will not guarantee success. The success or otherwise of a Turnaround strategy depends on the commitment shown by the top management as also the operating management.

 Likewise new CEO Mr. Juergen Ziegler of Mercedes Benz India ltd has implemented the project with new strategies with help of his management. And achieved success.

PORTERS FIVE FORCE MODEL

Competition from substitutes

Bargaining power of Suppliers

Rivalry between established Competitors

Threat of new Entrants

Bargaining power of Buyers

INDIAN CAR SALES FIGURES

Year
1994 1995 1996 1997 1998 1999

Maruti
1,74,735 2,54,094 3,16,812 3,42,821 3,38,759 3,60,202

Telco
11,867 10,548 7,746 6,301 2,211 39,179

Mercedes
0 667 1,786 656 919 734

SEGMENT- WISE CLASSIFICATION OF THE INDIAN CAR MARKET 1999

PRICE RANGE (IN 000$)

SALES ( IN 000 UNITS)

478,7 48,7 0,44 0

Mini cars
Entry- level cars

7-12 12-16,5 40-70 70+

Lower luxury
Upper luxury cars

PROBLEMS

Potentially Sick

WTO Import Duties

fluctuation in foreign exchange rate Retail Dealer Network Product Quality

SOLUTION

Strong dealership network.

Tie up with banks for cheap finance.

Growth of Indian Economy.

THANK YOU