Case 11 DaimlerChrysler AG

Agenda Case Summary - Sergey Question 1 – Paul Question 2 – Batar Question 3 – Paul Question 4 – Yan Question 5 – Sergey Question 6 – Yan Question 7 – Sergey

Case Summary Daimler-Benz and Chrysler Corporation signed merger agreement on May 6 th, 1998 Post-merger developments Strategic realignment and changes

The Merger Was Welcomed by Auto Analysts and Consumers The world’s third largest auto manufacturer (GM 1 st, Ford 2 nd ) Over $154 billion revenue, over $5.6 profit Mercedes-Benz ranked as the most visible luxury brand Chrysler’s success in low-end/sub-compact cars and trucks

Concerns for the Merger Reorganization of management formal and informal The companies’ future growth potential Changing global segments Incompatible governance issues

Daimler-Benz and Chrysler Corporation’s strengths in 1998 Daimler-Benz Mercedes is the most popular luxury brand A strong dealer network Ranked #17 globally Chrysler Corporation Low-end/sub-compact cars and trucks Big auto manufacturer in North America Mini-vans, Jeep and Dodge trucks Ranked #25 globally

Short-term Strategies Cost Cutting Worldwide integration Rationalization R&D savings Value pricing strategy Plant Closings

Long-term Strategies Global presence Strong brands Broad product range Technology leadership

What did you learn from DaimlerChrysler’s post merger problems and blunders?

Question 4 First, the importance of company culture integration. Second, the importance of a clear and correct target. Third, the importance of customers and demands. Fourth, the importance of the association between theories and practice Fifth, the importance of corporation especially the top executives Sixth, the importance of knowing the market and the partner

DaimlerChrysler’s Competitors GM Ford Motor Volkswagen Toyota

Dieter Zetsche’s Strategies Build a more cooperative and younger leading group to reach culture integration. Make the company more competitive by saving money and using different ways to meet different customers’ needs.

Breakup and Future Outlook Incompatible cultures No desire to adapt Brands’ mismatch Daimler AG and Chrysler LLC in

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