An Advantages To The Businesses Management Principles Business Essay

Operations Management has been identified by Krajewski, et al. (2007) as the control and path of the procedures of the organization that changes its insight materials to products and/or services for its customers. This record will compare how Mercedes-Benz and Honda manage their businesses. The assessment might be useful because it would help identify various ways an organisation could be run in order to meet its goals and goals.

The report will give a brief qualifications of both organizations mentioned above and then would move on to the contrast of their marketing strategies and competitive priorities. Finally, the value of frameworks such as capacity planning, inventory management, source chain design, Total quality management and performance methods, would be reviewed and how they could be useful in helping an organisation function successfully and effectively.



Mercedes-Benz U. S. International, Inc. (http://www. mbusi. com) was set up for the primary purpose of making the M-Class. The M-class was such a huge success that they made a decision in August 2000 to expand the center not only to manufacture more products of computer, but also to include the R and GL-classes to its product list. The growth not only doubled the place size but also the labor force. The plant consists of a body shop, paint shop and two set up shops. MBUSI gets orders off their 135 worldwide market segments.

MBUSI uses the "Just-in-Time" (JIT) viewpoint which implies that they do not stockpile huge amounts of the inventory they use to assemble their autos.


HMA (http://www. hondaalabama. com) companies the odyssey, ridgeline and pilot models for the world wide market. HMA's investment in Alabama has ended $1. 4billion with the structure of a fresh Honda Engineering facility, on-site consolidation center and material blanking operation. One of their goals is usually to be in a position to produce goods with high quality and sell at an acceptable price. HMA can be known as a No Landfill Facility because of the fact they are focused on the theory of "Reduce, Reuse and Recycle". They have made initiatives in curbing energy use throughout their production processes, which has gained them a power star prize from the U. S. Environmental Security Agency (EPA).



The making process for both models starts in the Body Shop where the components that consist of the metallic body are welded alongside one another. From your body shop, they are really taken to the ultra-clean Car paint Shop where in fact the cars are coated. Finally, they wrap up in the Set up where it becomes a new Mercedes-Benz M, R, or GL-Class ready for delivery. From starting to end, these vehicles are created with style, operation, and quality at heart (http://www. mbusi. com).


Honda Making of Alabama (HMA) gets the largest end result for Honda light pickup trucks. It has the capacity to create over 300, 000 odyssey minivans, pilot sport power vehicles, Ridgeline pick-up pickup trucks and V-6 machines each year (http://www. hondaalabama. com).


The Ansoff matrix implies four ways an organisation could develop strategically. The first one which is market penetration handles going into the market yet further with existing goods, another one, product development, is due to developing new products for the existing market, the 3rd which is market development deals with developing new market segments and new sections for existing products as the final the one that is diversification requires a radical step to build services for new marketplaces (Wood, 2007).

The table below shows the similarities and difference in marketing strategies between MERCEDEZ-BENZ and HONDA.






The marketing strategies described in the stand above will be talked about in the following paragraphs.


Product Development handles producing new products or improving existing one's for the prevailing market.

According to Mercedes-Benz (http://www. mbusi. com) and HONDA (http://www. automobiles. honda. com), here are some of the areas they may have tried to boost their products. Mercedes (GL-CLASS/C-CLASS) and HONDA (PILOT/INSIGHT Crossbreed) would be used as good examples.






-12-Way protection of the 8-air tote protection

-Electronic stability program(ESP)

-Brake Assist(BAS)

-Rollover sensor

-Low tire pressure alert system

-Active head restraints

-Seat belts

-Three-Row side drape airbags with rollover sensor

-Vehicle stability assist with traction control

-Lower Anchors and Tethers for children(LATCH)

- Advanced compatibility Engineering(ACE) body structure

-Tire pressure monitoring system(TPMS)


-Room for 7 adults

-collapsible chairs for 2ndand 3rdrow, leaving more cargo space.

-Room for 8 adults

-collapsible seats for 2nd and 3rdrow, giving more cargo space.

4-Steering wheel AIR SUSPENSION

- 4-steering wheel air suspension which can boost its height by up to 3". That is helpful for off road excursions.


-7500-ib towing capacity.

-4500-ibs towing capacity.


-Honda's changing cylinder management (VCM), which helps improve gasoline economy.





-"Blue efficiency" technology which is useful at reducing CO2 emissions

Reduced CO2 emission.

From the stand above, it can be observed that both organizations have developed their products in various areas such as safety, fuel overall economy, environmental friendliness etc. product development could be reported to be a good marketing strategy because many individuals are drawn towards goods they can derive good value for the money from. However, the development of something might result to a rise in its price. This price change might discourage certain consumers from purchasing it that could have a negative effect on the quantity of sales of the merchandise.


Market Development can be involved with creating new marketplaces and segments for existing products.

MERCEDEZ-BENZ and HONDA have authorized their occurrence in many elements of the world. Regarding Honda, they may have manufacturing companies in America, China, Japan, Europe, Indonesia, and India. When making automobiles in virtually any region, the needs and beliefs of the consumers over there must be put into thought. This could help in getting the marketplace to patronize you all the more. For example, according to (http://www. world. honda. com) because the Western market is highly Eco-conscious, Honda created and launched the Understanding Cross and the CR-Z Hybrid in '09 2009 and 2010 respectively, in Europe. Honda also released the Accord Crosstour model in the African and Midsection Eastern markets where in fact the SUV category is extensively popular in order to cultivate a new CUV (Cross-over Electricity Vehicle) category that offers new added value.

Mercedes-Benz also offers markets in various parts of the globe such as; Africa, Asia, Australia/Pacific, Europe, North and Central America, South America. Apart from growing new markets in several parts of the planet, Mercedes-Benz in addition has tried to consider new customer sections. Corresponding to (http://www. exampleessays. com), they want to grow their market bottom to youths. That is being done by utilizing a more 'life-style' marketing strategy which emphasizes a more entertaining, approachable and enthusiastic side of Mercedes-Benz. This new communication was clear when they sponsored the Elton John concert in NY, and sponsoring of the professional golf.

Market development is an excellent marketing strategy for the reason that it could help increase sales. However, when organizations enter into new marketplaces without carrying out proper research on its suitability because of their products, if as it happens that the marketplace is not beneficial enough due to reasons such as low purchasing ability of consumers, then that product being launched might not perform too well in the market.


Diversification is producing entirely new products for a new market.

Unlike Mercedes-Benz, Honda is in to the development of different goods in various product lines. They manufacture Cars, Power athletics (motor cycles and ATV's), Jets, Power accessories (Generators, lawnmowers, pushes, snow blowers etc), Honda Marines (Engines used for watercraft), and Honda Motors for (drinking water pumps, agricultural accessories, forestry equipments, etc). Diversification is a very useful marketing strategy in that it can help expand the marketplace base of the organisation and thereby increase the sales opportunities. However, for various reasons such as option of substitute goods; strong rivals etc, certain brands might become weakened or unprofitable which could affect the business negatively.











Some of the competitive priorities will be reviewed below.


Both Mercedes and Honda have constant quality as a competitive priority. It might be argued that Persistence has been achieved because of the fact that production of vehicles is highly computerized, and so the chances of problem are slimmer. Honda and Mercedes for example have robots they use in their vegetation. These robots have been programmed to work in a particular which helps to ensure consistency.


Both organizations have an array of goods available to customers. Mercedes has the A, B, C, CL, GL, S, SLK, E, R, M etc classes. On the other hand, Honda has different models of vehicles such as Accord coupe, crosstour, sedan, Civic coupe, cross types sedan, si coupe, odyssey, pilot, Ridge lines pick up truck, etc. With this set up, the consumers have a range of choices.


Delivery rate might be argued to be an important competitive top priority to organizations because usually, consumers choose going to places where they can get what they want when they need it. If an company can not deliver to its customers as quickly as possible, with time they could loose them. This could be one of the reasons why some companies opt to have branches worldwide just like Mercedes and Honda. The nearer you are to your market, the faster you can deliver.


Majority of Mercedes vehicles are luxurious and stylish. The materials involved in the manufacture of these automobiles are of top quality and for that reason could relatively cost more. This shows in the price tag on the vehicle at the end of your day as Mercedes automobiles are usually very expensive. On the other hand, Hondas' cost of operation might be considered a little lower because they produce vehicles that show up in the "small car" market; the raw materials used may not be as expensive as that of Mercedes. That is a location Honda and Mercedes differ.


Capacity planning is employed to ensure that the operations in virtually any given company run smoothly with no hitch. It could help identify the bottle necks, and then suggest ways of alleviating them. And in addition, through demand forecasts, it helps to guide the decision on if to increase their capacity by purchasing more equipment, adding more buildings etc. There are a handful of tools found in capacity planning, and one of these is the expansionist model.

The Expansionist strategy makes a forecast on demand and based on this, decides whether or not to grow capacity. The benefit of the expansionist strategy is the fact if the forecast is accurate, the probability of sales being lost to insufficient capacity becomes very small. However, if the demand will not increase needlessly to say, the investment made in expansion might become a waste.

Honda (http://www. world. honda. com) used the expansionist strategy when it forecasted that in 2004 they expected sales to increase by 36% of the previous time in the Asia-Oceania region. This made them increase the annual production capacity in India from 30, 000 to 50, 000 items. This decision to expand would have helped them decrease the chances of missing out on sales credited to capacity insufficiency.


Inventory management has to do with monitoring the in-flow and out-flows of the products of an company in such a way that they don't have too much in store, and at exactly the same time have the ability to meet up with their demand. There will vary methods of controlling inventory within an organisation, and one from it is Just-In-Time (JIT).

JIT is a philosophy which claims that products should be ordered for and produced only when needed, and that they should not be produced to store away. The good thing about the JIT philosophy is the fact it produces a lean system which is anti-waste. JIT also helps save on cost such as storage, controlling, shrinkage etc. However, if suppliers fail to deliver on the agreed particular date, fail to deliver materials of satisfactory quality and/or deliver materials that want scrap or rework, the organisations' procedures would be disrupted.

Mercedes ( http://www. mbusi. com) uses the JIT idea for its businesses. In their body shop, they may have about one day's supply of materials, and on the creation line they have about 40 minutes of parts. Their team runs on the computerized system whereby if they need more materials, a member of the team pushes a button which transmits a signal to the display screen on the forklift that will notify the forklift driver on which part is needed for what particular station. They utilize this system instead of stockpiling of parts at risk. It works on their behalf since it helps these to be "lean"


Supply string design has to do with the plan the organization has in place to ensure its resource chain will not prevent it from being competitive on the market. Supply string design is both highly relevant to the service and manufacturing industries. In the service industry, it seeks to ensure that the resources had a need to provide a service are always available in the right percentage, within the production industry, it seeks to ensure that the organization doesn't have too much nor inadequate stock in its ownership so they could experience their competitive priorities. One important aspect of supply string view is off shoring.

Off shoring includes building branches of a business in one or even more parts of the earth. This could be done for various reasons one which is to reduce the price tag on logistics. However, if there is an over-estimation of the suitability of the supposed location for the organization, and after establishing there for a while, they uncover the prospects are not as dazzling as they thought probably due to insufficient power, they might have to flip up the business which might be too costly because they would have invested a great deal in the task. Hence, it is important for organizations to be sure it is absolutely necessary before embarking on an off shore project.

Both Mercedes and Honda have off shore branches, which is reflected in the number of subsidiaries they have got all over the world. Among the reasons why they do this is to be closer to their customers, to allow them to cut down on delivery cost.


Total quality management (TQM) can be used to ensure that the products produced and services rendered by a business are of good quality, or more to standard. The International Standard Company (ISO) places the bar for everyone organizations. TQM takes into consideration three principles which include; level of customer satisfaction, degree of worker involvement and the speed of ongoing improvement.

Customer Satisfaction: This has to do with producing goods and rendering services that meet the need and fulfill the wishes of the client. It is important for an organization to satisfy their customers because they're the ones who keep them in business. If your customers are unsatisfied with your goods or services and they leave, then that corporation might collapse up in under virtually no time.

Employee Participation: It has to do with getting the opinion of workers on how to go the organisation forwards. It might be argued that concerning employees in a few decision making functions is vital to the success of that organization because, it makes them feel useful and so they might want to put in their finest in what they are doing. They are permitted to be innovative and to contribute their ideas to the organization which might conclude taking the business to levels of greatness.

Continuous Improvement: This deals with ensuring organizations functions are always effective and effective. The competition on the market more recently is so stiff that organizations cannot find the money for to truly have a lackadaisical attitude to the continuous improvement of their processes. If they do that, they might loose their customers with their competitors.

It could be said that the application of the 3 key points to an organisation would be helpful for its survival. However, it might be expensive to take care of especially when it comes to the continuous improvement bit because it might entail needing to train staff over a repeated basis.

Mercedes (http://www. mbusi. com) tries to continuously enhance their processes by training their employees before and even after they start work.


Each group need some form of benchmark to measure their degree of performance. Kaplan and Norton's healthy scorecard could be utilized for this purpose, which is reviewed below.

Financial Measures; it has regarding the measurement of the financial performance of the company. It requires into perspective concepts like Working income, ROI, EBIT etc. Daimler AG, (http://www. daimler. com) the mother or father company of Mercedes possessed a net revenue of C1. 4billion in 2008 while in 2009 2009, they recorded a net loss of C 2. 6billion. This loss might be partially due to economic recession. In '09 2009, (http://www. world. honda. com) Honda had an operating income of Y189, 643 thousands and thousands while this year 2010, it increased to Y363, 775. Taking a look at these figures, one can tell instantly their level of financial performance for those years.

Customer-Relationship Measure; this handles how well an organisation treats its customers. It considers issues such as client satisfaction, customer retention etc. Mercedes is a brand that could be argued to be popular for making their customers happy because they produce cars with "school". They make an effort to meet up with the "need of sophistication" which their customers have. Along with the release of the CR-Z cross types, Honda in addition has tried to fulfill a segment of its market which is the Environmental-conscious group.

Business Process Strategy; This will try to evaluate how well an organistion manages its operations. It offers steps such as Quality, cost etc. Using quality for example, you can say it is necessary for both Benz and Honda to have it because individuals are willing to buy goods that are worthwhile the value of the money. So if these organizations lack this requirement, very soon they would frequently go out of business.

Learning and Progress/Human Resource Options; This handles how the employees are treated in the company. Some measures because of this include worker retention, worker satisfaction, training etc. Mercedes is having troubles with staff retention because of the recession. As a result, these are retrenching employees because they want to reduce the amount spent on pay. Honda on the other hand has made efforts in wanting to make their employees a little comfortable. Honda guaranteed a amount of &31. 7billion for staff bank loan so that if some of its employees take a loan a falters, that sum would bail them out.


The concepts in the blend might be argued to be necessary to any given organisation. This may be because both play very important assignments in guaranteeing the operations associated with an organisation run well.

Capacity planning helps ensure they don't loose from demand anticipated to insufficient capacity. Inventory management ensures they have the right amount of stock at every given point in time. This is necessary because they do not want so much stored up away that could result in a rise in having cost, and at the same time they would like to be able to experience demand. Supply chain Design helps to ensure the suppliers do not provide as impediments to the organisation from get together their competitive priorities. Total quality management and performance resources are in spot to ensure that the products and services being produced are of appropriate standard.

Based on the functions of the many frameworks referred to above, it could be said that all the people of the mix are essential to both Mercedes and Honda.


It could be argued that capacity planning, source string design and inventory management are essential for competitiveness.

Supply string design is essential because you need suppliers whose emphases are; on-time delivery, steady quality and low prices. This may help organizations meet competitive priorities such as low cost operation, constant quality, delivery velocity, on-time delivery, top quality. Developing a good supply chain design would be essential for Mercedes (MBUSI) because they practice a JIT system which is highly reliant on reliable suppliers in order for it to succeed.

Capacity planning helps competitiveness in that it ensures the organisation always has enough products to meet its demand. That is essential because if customers seldom get what they need from an organisation, they might loose self confidence in them and in doing so stop patronizing them. Capacity planning would be beneficial to both Mercedes and Honda because which need to meet with the demand for their products to be able to build self-assurance in their customers.

Inventory management might also be essential for competitiveness because for a business which has low cost procedure as its competitive goal, having too much goods in store is probably not useful in helping them achieve this goal anticipated to retaining cost. Therefore such organisations need to screen the amount of goods they have in stock at a specific time.


Performance resources and Total Quality Management could impact innovation. One of the metrics in performance resources which has to do with new product/service development could have an impact on invention because it's a benchmark that emphasizes product improvement. Also, the ongoing improvement principle under TQM which declares that organizations should make an effort to deliver better goods and services over a constant basis could impact on its impressive skills.

Mercedes and Honda utilize this mix. That's the reason it can be observed that every style of car they release is an much better version of the previous one.


The mix contains important principles such as capacity planning, inventory management, resource string design, performance resources and Total quality management. If these key points are being applied to both Mercedes and Honda, these organizations would probably remain in the market for a significant long time frame because the use of the mix provides an functional and competitive border, and being able to compete in the market is essential for success.


This record has helped to highlight how important it is designed for organizations to control their functions well through the use of rules such as TQM, Capacity planning, inventory management etc because then, they will not only meet their competitive priorities, nonetheless they can be competitive effectively against competition in their target market.

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