This was the only way it could steal a small portion of the market through price competition. So far they have done well, but in view of the other original market entrants they can only gain so much, or so little.
This has also offered buyers a substitute to Mercedes-Benz and its competitors. Buyers who could not afford a Mercedes-Benz now had the choice to save some money on the purchase of a Lexus. With all the technological and infrastructure investment that Toyota had made in the early eighties it has successfully managed to create a substitute for most of the luxury cars. .
Now that they are operating in this segment for a good ten years the competition has increased as each competitor strives to offer more. .
The extent of competitive rivalry:.
The luxury car segment is a competitive industry where each rival has to constantly scan its competitors for any changes whether they're in price or in the product itself. This in turn leads to the introduction of new features on current models or new models.
Mercedes-Benz Main competitor is BMW, this is firstly because they compete directly in the luxury segment with their 5 series and 7 series models and secondly because they are of roughly the same size. The rivalry between them is high, but Mercedes-Benz has managed to keep them at bay through a strong sales policy that has lead to record sales particularly over the last two years. .
Other rivals include Jaguar, Audi, Rolls-Royce etc However they are not in direct competition as they have targeted a different market segment that does not compare to that of Mercedes-Benz. The reason for this is that Mercedes-Benz has made the standard in quality and safety, in other words it has set the standards for its competitors to match. .
SWOT (TOWS) Analysis.
Most large business firms now prepare strategic plans. At the centre of strategy formulation is the identification of the strengths, weaknesses, opportunities and threats (SWOT).
