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Lexus challenges Mercedes Essay

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 might not be able to represent Lexus because of financial reasons since this model would be the flagship of the car industry. On the other hand, most Mercedes agents are able to represent a luxury models like the SEL500.

Mercedes produces cars whose engines are above 2000cc. and doesn’t produce any models with an engine less than the above. Lexus is the only Toyota’s model that exceeded the limit of 2000cc. That’s why Mercedes has the kind of status nowadays and is difficult to be taken down.

· Toyota is a Japanese car industry and many Europeans might prefer to buy a European car since Mercedes is a German industry.

C. External issues. (threats)

Mercedes might maintain or raise its prices and add generous guarantees and services like for example free repairs for six years.

Other car industries like Toyota might follow the same strategy of producing luxurious cars and so Mercedes would not be the unique competitor in this category.

C. External issues. (opportunities)

People who bought Lexus were delighted and the buyers raved to their friends and became the best salespeople for the new Lexus.

The Mercedes power system in wealth offered, and other car industries like Jaguar, Rolls-Royce, and BMW was beginning to collapse.

D. Alternatives.

Toyota could keep on advertising Lexus as much as possible and should try to develop the specific model more, in parts of technology, safety, engine, and look. Also, Toyota could spend more money in order to make its showrooms and service provided the same and even better than those that Mercedes has.

E. Recommendations.

For many years Mercedes-Benz is producing cars with big engines and endless hulls adjusting its equipment to the world standards of safety and technology. If Toyota is powerful enough to pass through all the stages that Mercedes went in order to become one of the best industries of luxury cars worldwide, then maybe sometime in the future Toyota will be able to compete Mercedes with the only difference that the last would be one step ahead. According to my opinion, in Mercedes reigns one dictum: Only the best is good enough…

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