Daimler Chrysler Merger Essay -- GCSE Business Marketing Coursework

Daimler Chrysler Merger Daimler Chrysler is the result of merging Daimler-Benz and the Chrysler Corporation in late 1998. The merger was to be wiz of the largest on record, and the beginning of a youthful wave of mergers sweeping through the automotive industry. Although the companies were manufacturing generally interchangeable crossings, the differences between those products could not be wider. Chrysler was known for a product gillyflower consisting of mini-vans, light duty trucks, and four-wheel drive off-road vehicles Daimler-Benz was known for its luxury denounce of Mercedes-Benz vehicles and medium and heavy-duty over-the-road trucks. Merging the two companies entertained the idea of one entity possessing a product line covering nearly every flake of wheeled vehicle. Daimler Chryslers strategy was to maintain separate brands and images, following its national book, Guidelines for Daimler Chrysler Brand Management. This book outlined a strategy cons istent with a clear separation of Mercedes-Benz and Chrysler brands. No sharing of common platforms, factories, or enfranchisement networks was allowed. In effect, the two companies were to be run as separate entities hitherto the headquarters were to remain separate. It would appear a strategy consistent with these goals would in earnest limit any anticipated synergies of the merger. Upon completion of the merger, an industry wide overcapacity existed, and economical conditions suggested a further slowdown in auto sales on the horizon. Medium and heavy-duty truck sales were slowing down, Mercedes-Benz was facing potent competition from the luxury Japanese car foodstuff, Chrysler was experiencing lackluster sales, and clearly, be require to be cut. The result was Daimler Chryslers announced layoffs of 26,000 employees and the idling of several fiction plants in North America. It became app atomic number 18nt to those outside the organization that the merger was more of a takeover by Daimler-Benz than a merger of equals. Clearly, Daimler-Benz emerged as the direct entity and named many of its executives to the board of directors. Chryslers management took a back seat, and the motive Chrysler CEO was given a lesser role in the new organization. Since the completion of the merger, Daimler Chrysler line of descent (DCX) has suffered over a 55% decline. The fundamentals of the caller-out trail i... ...strategic alliances with MMC and Hyundai should allow rapid penetration in the Asian market. The authorisation synergies, if realized, should allow increased production efficiencies while reducing costs. New product lead-time could be diminished sequentially, allowing an advantage over the competition, while incorporating Daimler-Benzs plan facilities with Chrysler should increase Chryslers perceived quality without sacrificing Mercedes-Benzs brand image. Of late, the stock price has suffered more than its peer s as investors recognize the lack of synergy if the entities are not combined in at least some capacity. combining at least some portions of engineering, design, and manufacturing should be attempted, at least on an experimental basis, if any synergies are to be realized. Merging and acquiring companies without exploiting their relative advantages offers little or no advantages. If Daimler Chrysler is to prosper in this very private-enterprise(a) industry, it should explore all potential comparative and strategic advantages to minimize costs while sharing its core competencies throughout the organization to increase market share and brand recognition.