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Daimler chrysler

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Self made presentation. From multiple sources without references. Just for basic understanding of readers.

Self made presentation. From multiple sources without references. Just for basic understanding of readers.

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  • 1. Daimler-Chrysler – Merger of Equals?
  • 2. By years1926 - Benz & Co. and Daimler Motor Co. formed Stuttgart-based, German Daimler-Benz1998 - Daimler-Benz and U.S. based Chrysler Corp, agreed to combine their businesses. (What was perceived to be a ‘merger of equals’)3rd (after GM and Ford) in the world in terms of revenues, market capitalization and earnings5th (after GM, Ford, Toyota and Volkswagen) in the number of units sold2000 - suffered third quarter losses of more than half a billion dollars.2001 – projected loss > 3rd quarter. 26,000 job slash from Chrysler announced by merged co.2007 – Chrysler sold to Cerberus (7.4 billion $)
  • 3. Possible Corporate GoalsDaimler-Benz:- Had captured less than 1 % of total American markets in their segment- Possibly bridging this gap?Chrysler Corp:- Chrysler corporation was in mode of more internationalization- Possibly to enhance & support that expansion strategy?Merger Corporate Goal:- Huge savings by combining purchasing & operations?- Reduce total research & development cost? No different votes that both “THE GIANTS”
  • 4. Organizational DifferencesDaimler-Benz: (Doing right things - RFT)- Methodical & Centralized Decision Making- Traditional by Org. Structure- Play efficient & safe- Focus on highest quality & engineering available to market- Emphasis on Quality Engineering, design & after salesChrysler Corp: (Doing things right)- Encourage creativity, empowerment, Team Orientation- Take risks, manage risks, set goals & direct them- Creativeness, catching designs @ competitive pricing- Emphasis on High volume, low cost manufacturing & distribution
  • 5. Challenges & IssuesIntegration?- Start-up phase- Project Implementation Phase – Hard & Soft factors of success- Business Transformation Phase – Could not be entered intoCultural Issues? East & West- Worked with respective original cultures- Both had their own modus operandi, structure & organizational values- Daimler (Authoritarian & Bureaucratic) & Chrysler (Cross Functional & Lean)- Decision making by German style – But process at new Chrysler unit uncontrolled- Chrysler workers earned more - Near to 4 times then German did?- Still Chrysler was considered to be poorer brand when came to Mercedes (Daimler)
  • 6. Asian Challenges?- Lust for new royal models- Japanese companies satisfying the same- Competitive cost proposition – Perceived Value - Royal & Luxurious- Toyota & Honda becoming pioneers. GM & Ford were already ahead.Lacking Diligence?- Diligence is a mechanism to check operational viability & process check- Both companies confident about their own processes- Daimler never did diligence - Chrysler being tenable to Asian player (Toyota, Honda, etc)- Chrysler never expected Daimler not to support technological front when required
  • 7. Mismanagement?- “Merger of Equals” → Was it really true? Twas a SCAM- Bought by Daimler - treated as Stepchild & not partner- Pioneer managers of Chrysler were now gone- Present were silent & ineffective & others went to GM & Ford
  • 8. ConclusionsGlobalization & Internationalization – BuzzwordsIn true sense can be a company “Global Company”?Culture? Policies? Compensations? Ownership? Legal & Political environment? Acceptability?If we attend these points with due diligence then we are RFT @ “Start-up phase”Set commonly acceptable norms & rules of businessFurther most important – Should exert very good Communication Strategy