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Amit Shrivastava

PRESENTATION ON

TAMING THE ELEPHANT:

Turnaround of Mercedes- BenzIndia Limited

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PREMIUM

BRAND

Mercedes Benz known for its technical perfection, quality

standards, innovative car legends

PRODUCTION

LOCATION104 world wide

1st

MercedesBenz in India

Was E-class W124

INTRODUCTION

HEADQURTER

IN INDIAMumbai

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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.

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3 PHASES IN TURNAROUNDMANAGEMENT

Phase I: Watching out for thedanger signal

Phase II: Choosing appropriateStrategy

Phase III: Implementation ofthe change process

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PHASE I: WATCHING OUT FOR THE

DANGER SIGNAL

Decreasing constant rupee sales

Decreasing profitability

Lack of planning

Inflexible CEO

A management team unwilling to learnfrom competitors.

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PHASE II: CHOOSINGAPPROPRIATE 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

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2. Operating Turnarounds

1. Asset reduction strategies2. Revenue increasing strategies

3. Combination strategies

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PHASE III: IMPLEMENTATION OF THE

CHANGE PROCESS

Implementation plays an important role in any

turnaround management.

Identification of an appropriate strategy byitself will not guarantee success.

The success or otherwise of a Turnaroundstrategy depends on the commitment shown by

the top management as also the operating

management.

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Likewise new CEO Mr. Juergen Ziegler of

MercedesBenz India ltd has implementedthe project with new strategies with help of

his management. And achieved success.

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Rivalry between

established

Competitors

Competition from

substitutes

Threat of new

Entrants

Bargaining

power of

Buyers

Bargaining

power of

Suppliers

PORTERS FIVE FORCE MODEL

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Year Maruti Telco Mercedes

1994 1,74,735 11,867 0

1995 2,54,094 10,548 667

1996 3,16,812 7,746 1,786

1997 3,42,821 6,301 656

1998 3,38,759 2,211 919

1999 3,60,202 39,179 734

INDIAN CAR SALES

FIGURES

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SEGMENT- WISE CLASSIFICATION OF THE

INDIAN CAR MARKET 1999

PRICE RANGE (IN

000$)

SALES ( IN 000

UNITS)

Mini cars 7-12 478,7

Entry- level cars 12-16,5 48,7

Lower luxury 40-70 0,44

Upper luxury cars 70+ 0

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PROBLEMS

Potentially Sick

WTO Import Duties

fluctuation in foreign exchange rate

Retail Dealer Network

Product Quality

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SOLUTION

Strong dealership network.

Tie up with banks for cheap finance.

Growth of Indian Economy.

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