Chapter 7, Problem 20MESP

Summary Introduction

To Determine:

To analyze chief factors that led the Mercedes to undertake FDI in US rather than produce the M-Class cars in Germany.

Introduction:

Mercedes Benz was termed as not youthful and fun by the market researcher firm, which analyses the personality of the product. Therefore, in order to improve its sales Benz came up with a new series of creative products. Mercedes also formulated new advertisement strategies, which enhanced the sales of the product. So, Mercedes wanted to further improve its new marketing strategy to increase the growth of the company therefore it decided to outsource its operations. It gained valuable knowledge and experience from setting up a new plant in another country.

Suggestion:

Thus, the factors that led Mercedes to set up a new plant in Alabama, US through FDI were discussed.

Given information:

As per the data given, the case is regarding Mercedes Benz’s decision to set up a new plant in Alabama, US through FDI in order to increase the company’s growth.