Lexus challenges Mercedes:a SWOT analysis.

Essay by blikUniversity, Bachelor'sA, May 2004

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Lexus challenges Mercedes

A. Introduction.

Toyota offers luxury and quality setting the trend through its new model, Lexus, giving the same almost privileges to the buyer as the ones that a Mercedes owner enjoys at a half price.

B.The problem.

Extremely high competition on behalf of Toyota towards a multinational car industry like Mercedes whose name is synonym to luxury and status that offers if somebody owns one. Unknown expectations and responds from the part of the candidate buyers.

C.Internal issues. (strengths)

Toyota was offering a car that had the same performance with Mercedes at a reasonable price.

Toyota made the public believe that he or she is a smart buyer since they could have a luxurious car, which in order to have it, they wouldn't throw their money just to gain more status.

Toyota was planning to market the new model with a multiple warhead attack.

Lexus had a luxurious interior, and a sculptured look with fine fit and finish.

Also the engine was smooth as well as the ride.

Lexus cost 50% less than a Mercedes model with the same engine and standard equipment.

Toyota paid much attention to the designing of the showrooms and to the professional salespeople that was planning to hire.

Cheaper spare parts than Mercedes.

Toyota was offering a 12-minute videotape to the buyers with which outweighed the advantages over Mercedes.

Lower taxes. According to the magazine Car and Driver issued on April 1997, the annual token for Toyota Lexus GS 300 is 16.250.000 drachmas, where the annual token for Mercedes SEL 300 is approximately 20 million.

C. Internal issues.(weaknesses)

Not the same status that Mercedes has set up decades ago.

Cheaper spare parts might also be problematic ones.

Inexperienced personnel in case something could go wrong with the launched cars.

Many Toyota agents...