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- 1. A Merger of Equal A Marriage Made In Heaven An Incompatible Marriage The Perfect Union Deal of The Century
- 2. BACKGROUND Englands oldest marque
- 3. Background of Daimler
- Gottlieb Daimler , 1834-1900
- 1889 Developed engines with Wilhelm Maybach
- 1891 Fredrick SimmsBought UK patent rights to Daimlers engine
- 1893 Formed a company calledThe Daimler Motor Syndicate Ltd.
- 1924 Merged with Karl Benzs Benz & Cie to form Daimler-Benz. Built cars under the name Mercedes-Benz.
- Core Competencies
- high-valued, technically advanced cars, and focuses on development of car engines
- Target Market
- Daimler is an up-market brand
- The company targets a market niche with high-end users, that focus on the luxurious trait of Daimler
- Strategic IntentThe company aims to achieve sustainable profitable growth through the development superior products, and customer-relevant technologies.
- Source :http://www.just-auto.com/store/product.aspx?ID =60037
- 5. Daimlers Company Profile
- Current Chairman:Dr .Dieter Zetsche
- Business Divisions:Mercedes-Benz Cars, Daimler Trucks, Daimler Financial Services, Daimler Buses, Mercedes-Benz Vans
- Total Revenues in 2007:EUR 99.4 billion
- Total Sales in 2007:2.1 million units
- Today is the2 ndof the Big Three European Automakers(Volkswagen, Daimler AG, Renault)
- Brands: Mercedes - Benz, Smart, Maybach, AMG, Freightliner, Sterling, Western Star, Mitsubishi Fuso, Setra, Detroit Diesel, Thomas Built Buses, Orion
- Source: http://www.daimler.com/dccom/0-5-7155-1-12898-1-0-0-0-0-0-36-0-0-0-0-0-0-0-0.html
- 6. BACKGROUND All American
- 7. Background of Chrysler
- Founded byWalter P. Chrysleron June 6, 1925
- 1924 LaunchedChrysler Six , designed to provide an advanced, well-engineered car, at an affordable price
- 1928 Acquisition of the Dodge Brothers firm made Chrysler the third of Detroits Big Three (GM, Ford, Chrysler) automakers overnight
- 8. Background of Chrysler
- Core Competencies
- Well known for its product designs, process design, marketing
- Target Market
- Mass market
- 9. Chryslers Company Profile
- Current Chairman and CEO:Robert Nardeli
- Business Divisions:Chrysler, Dodge, ENVI, Jeep, Global Electric Motorcars (GEMCAR), Mopar, Chrysler Financial
- Main Market:North America
- 90% of sales, 2.1 million units produced annually
- Dealerships in US:3,669 (as of 2007)
- Chrysler i s considered today as the most successful Detroit automaker
- 10. The Merger How it all happened
- 11. Motives for the Merger
- Daimlers Motives
- Their goal to become a global player with interests outside its traditional West European base, led to its merger with the Chrysler Corporation.
- Chryslers Motives
- To gain competence in product technology and quality
- To expand beyond the North American market
- In combining the two companies, you had the potential of gaining high volumes, participation in all segments, innovation, adaptability, and technology and quality excellence
- Source: School of Economics and Management, Lund University
- 12. SWOT ANALYSIS
- 13. SWOT Analysis
- Merger combined two strong companies .
- Savings resulting from economies of scale .
- Company does more than just autos .
- Daimler has outstanding reputation .
- Chrysler was a very cost - effective company .
- A leader in innovation .
- Record revenues and increasing market share .
- Lack of capital constraints .
- Strong existing product brands .
- $47 billion allocated for research and development .
- A wide array of corporate holdings .
- Leader in Fortune Global 500 .
- Merger combined two different company cultures( European and American ).
- Harder to inspire vision and direction for this large global company .
- Employees have been leaving at a high rate .
- DaimlerChrysler brand is unknown and difficult to define .
- Image campaign could distract from strong product brands .
- DaimlerChrysler products do not bear the company name .
- Companys broad holdings are still seen as separate entities, not as parts of DaimlerChrysler .
- Merged company should be able to expand markets, particularly into Asia .
- Safety failures at Ford should open door for DaimlerChrysler .
- Innovation will lead to new products on the market .
- A hybrid car, which is very environmentally friendly, will be launched soon .
- Creating a DaimlerChrysler corporate brand identity .
- Over 68 percent of the company's profits come from automotive brands .
- Can reach opinion leaders and existing customers with similar communication plans .
- Innovative car ideas .
- Has been an extended period of time without corporate communications .
- Globally, the general population knows little about this corporate merger .
- DaimlerChrysler does not yet have a corporate brand identity .
- Over 68 percent of the company's profits come from automotive brands; this is a threat if the market takes a downturn .
- Behind in the research and marketing of hybrid autos .
- Size of company will demand a varied marketing program; a cookie - cutter approach will not work .
- 17. Alliance Design
- 18. Alliance with Other Companies
- CEO, Schrempp attempted to enter Asia by forming an alliance with Nissan but was turned down by board members.
- Hyundai of South Korea in June 2000
- DCXpurchased10percent of Hyundaishare in June of2000for$428million , later increase its holding to 10.5%
- S old share of Hyundai in2004for$912Million
- Mitsubishi of Japan From March 2000- Nov 2005
- Hold 34% of Mitsubishi equity stake (purchased for 2.1 Billion Euro)
- Lasted 69 months
- The deal was costly it was a disaster!!
- Mitsubishi was loss-making partner rather than good merger target.
- Shortly after a sale of the final portion of share, Schrempp was forced to step down and replaced.
- 20. Mitsubishi Performance
- 21. Following the alliance
- 22. 1999
- "The first full year of DaimlerChrysler has been a great one.
- Our sales revenues for 1999 are up about 12 %. We sold 3 .2 million Chrysler, Dodge, Plymouth, and Jeep products - more than any other year history.
- We also sold more than a million Mercedes-Benz passenger cars, and 550,000 commercial vehicles - also a record."
- 23. 2000
- 2-years after merger, DaimlerChrysler's US arm stumble.
- Chrysler US loss for 3rd Q at $530M-$550M
- Problems: US exec flight due to German intervention, abandon of Jeep/Dodge Ram up styling, failure to deliver on cost savings
- (unwelcome by US execs) Investments in Mitsubishi and Hyundai for "global" market projects
- 24. 2001-2002
- Late 2000: Dr. Z, then head of Chrysler, proposed a massive reorganization of the US subsidiary: the closure of six plants and the loss of 26,000 jobs .
- A poor performance in 2001
- DaimlerChrysler's revenues for 2002 ($148.15 billion) decreased 6% from 2000
- Chrysler cars generated a decreasing revenue, down 7% from 2000 and Chrysler accounts for 41.5% of company revenue
- On the opposite, Mercedes Benz generated an increasing revenue of 9%, only accounted for 31% of the total revenue.
- 25. 2003-2005
- 26. After that
- Late 2005: shareholders forced Jurgen Schrempp to step down as the chairman. After the Chrysler unit of DaimlerChrysler made a big loss in 3Q of 2005,.
- Dr. Z, Dieter Zetsche, took over.
- $1.5 billion loss for 2006
- DaimlerChrysler's operating profit in 2006 rose .3 billion eurosfromthe previous year .
- However, Chrysler division suffered a large financial loss of 1.5 billion euros and has plans to lay off over 13,000 jobs in the future.
- 27. 1. Stock Price shrank Overall results Stock Price 1998-2002
- 28. Comparison
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