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  1. 1. A Merger of Equal A Marriage Made In Heaven An Incompatible Marriage The Perfect Union Deal of The Century
  2. 2. BACKGROUND Englands oldest marque
  3. 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.
    Gottlieb Daimler
  4. 4.
    • 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. 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. 6. BACKGROUND All American
  7. 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
    • Source:http://www.chryslerllc.com/en/about_us/our_history/
  8. 8. Background of Chrysler
    • Core Competencies
      • Well known for its product designs, process design, marketing
    • Target Market
      • Mass market
  9. 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. 10. The Merger How it all happened
  11. 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. 12. SWOT ANALYSIS
  13. 13. SWOT Analysis
    • Strengths
    • 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 .
  14. 14.
    • Weaknesses
    • 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 .
    SWOT Analysis
  15. 15.
    • Opportunities
    • 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 .
    SWOT Analysis
  16. 16.
    • Threats
    • 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 .
    SWOT Analysis
  17. 17. Alliance Design
  18. 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
  19. 19.
    • 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.
    Alliance with Other Companies
  20. 20. Mitsubishi Performance
  21. 21. Following the alliance
  22. 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. 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. 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. 25. 2003-2005
  26. 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. 27. 1. Stock Price shrank Overall results Stock Price 1998-2002
  28. 28. Comparison