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Daimler Chrysler

Daimler Chrysler

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Daimler Chrysler

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  1. Daimler Chrysler Saidi Isaac Ron Sparks Candace Stocker Jeron Wright

  2. Daimler Chrysler’s Position • Daimler Chrysler is committed to achieve consumer satisfaction among all global auto manufacturers because of our engineering excellence, innovative products, and superior service.

  3. The External Environment

  4. External Analysis • Economic Factors • Social Factors • Political Factors • Technological Factors • Ecological Factors

  5. Industry Analysis

  6. Porter’s “Five Forces Model”

  7. Competitor Profiles Toyota

  8. Competitor Profiles GM Ford

  9. Company Profile

  10. Value-Chain Analysis • Primary activities • Secondary activities • Strength and Weakness • Competitive advantage

  11. Primary activities Inbound Logistics Marketing and Sales Service marketing communications

  12. Secondary Activities Human Resources Management Technology Development Firm Infrastructure

  13. Strengths And Weakness Strong Brand names Broaden it with models Perfect fit and leaders Negative view of Mercedes

  14. Competitive Advantages Wide variety of vehicles Mercedes’ strong characteristics

  15. SWOT Analysis

  16. Core Issue • Automakers had been losing money. • After 9/11/2001 sales of cars and trucks dropped dramatically • Mitsubishi’s sales were 20% • Chrysler’s sales were 5% • Mercedes’ sales were 2% 2003

  17. Core Issue (cont.) • How to differentiate themselves from global competition in a meaningful, sustainable manner. • Growth of China automobile market • Developing innovative vehicles that appeal to consumers • How to remain profitable in the future

  18. SWOT Summary • S: • W: • O: • T:

  19. Financial Analysis

  20. Employment • In 1998, the average annual number of employees totaled 433,939 • Peaked in 2000 at 463,561 • By 2002, the average dropped to a mere 370,677 • From 1998 to 2000, 92,884 people lost their jobs • This equates to 25% of DaimlerChrysler employee force

  21. Net Income • From 1998 to 2003 DaimlerChrysler only experienced a loss in net income within 2001 • In 2000 the company had nearly a gain of 7.89 billion • In 2001 this amount totaled a whopping negative 662 million • Causes and effects

  22. Stock Prices • Trends • Factors • Economic conditions

  23. Market Conditions • Terrorist attacks • Capital funding • Acquisitions within the industry

  24. Profitability Ratio

  25. Leverage Ratio

  26. Strategic Scenario

  27. LONG TERM OBJECTIVE • Number one automobile manufacturer in the world

  28. BEST CASE SCENARIO • Not to separate Operation Groups: • Mercedes units • Chrysler units • Mitsubishi units

  29. WORST CASE SCENARIO • Separation of the groups • Sale of Chrysler units • loosen a mega-merger • Money for Promotional

  30. MOST LIKELY SCENARIO • Separation of operations units • Mercedes unit from • Chrysler unit and • Mitsubishi unit

  31. WHY • Maintain Mercedes position • Profit for Innovation • Costly to maintain and sustain other • Have stronger brand image • Succeed and Survive in the competitive markets

  32. Corporate Level Strategies

  33. Alternative I: Reorganization • Expected Benefits • Winning Against the Competition • Drawbacks

  34. Expected Benefits • Units work cross-divisionally to maximize strengths • Allows for the transfer of information, innovation, and expertise • Cost-saving strategies • Feasibility

  35. Winning Against the Competition • Variety • Increased attractiveness • Stronger vehicle designs • Extra kickers

  36. Drawbacks • Negative view towards Mercedes • Decrease in sales for Mercedes • A way around these implications

  37. Alternative II: Restructuring • Expected Benefits • Pros • Cons

  38. Expected Benefits • Fixes Mercedes quality issue • Increases the Mercedes brand image • Helps DaimlerChrysler

  39. Pros • Power of Mercedes • Generated profits • A focus to improve

  40. Cons • Relying to much on Mercedes • Holding up both ends • Mercedes could still have quality issues • How to reduce these

  41. Business Level Strategic Alternatives

  42. SBUs • Mercedes Car Group • Chrysler Group • Commercial Vehicles • Services (DaimlerChrysler Bank) • Other Activities (MTU Aero Engines, Mitsubishi Motors, European Aeronautic Defense and Space Company (EADS)

  43. Generic Strategies • Differentiation • Low-Cost

  44. Evaluation of Business Level Strategies Differentiation Pros Cons Companies imitate Consumers view changes Difficult to charge premiums • High level of customer loyalty • Charge premium for product • Possible increase in revenue • Reach wider target market

  45. Evaluation of Business Level StrategiesLower Cost Leader Pros Cons Companies imitate Technology changes Bases for cost leadership erode • Lower prices • Higher profit margin • Increase in revenue

  46. Grand Strategies • Product Development • Market Development • Innovation

  47. Preferred Strategic Choice • Long-term Objective • Corporate Level Strategy • Business Level Strategy