Essay About Largest Industrial Mergers And Daimler Chrysler

Daimler Chrylser
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Touro University International
Nicole Plummer
MGMT 499
Case Study 4
Dr. Paula Stechschulte
SWOT analysis is a tool for auditing an organization
and its environment. It is the first stage of planning and
helps marketers to focus on key issues. SWOT stands for
strengths, weaknesses, opportunities, and threats.
Strengths and weaknesses are internal factors. Weaknesses
and threats are external factors. The TOWS Model is the
taken one step further in that it simply looks at the
negative factors first in order to turn them into positive
factors.
In 1998 when German industrial giant Daimler-Benz AG
merged with American automobile manufacturer, Chrysler
Corporation, Daimler Chrysler came into existence. Daimler-
Benz acquired Chrysler Corporation for $36 billion,
representing one of the largest industrial mergers in
history. This added to the $48 billion value of its Benzs
existing stock making Daimler Chrysler worth $84 billion.
This merger didnt result for the big picture that was
expected after this merge. It was thought that this merger
would create a global economy not only between two of the
worlds greatest economy but also capturing the market in
various part of the world. Whereas, underneath this view
there were many issues, which were involved in this merger
of totally two different culture. Daimler-Benz was an
aggressive firm, which believed in hustling every possible
way to make its company the number through out the world.
But, Chrysler was on the other hand a easy going and slow
progress firm which believed in the production and
flexibility of operation even bearing the various expense
it might had to face. This merger turned into a disaster so
quick that it seemed like in a short term view that this
companies would be in great trouble of surviving in such
hostile condition. By December 2000 just two years after
the merger a collapsing Daimler Chrysler stock had a market
value of only $39 billion.
Jurgen Schrempp was the assigned Chairman of
Daimler Chrysler, his whole career was evolved from the
Mercedes brand. He was confident that he would be able to
bring Daimler Chrysler back into its status within a short
period of time. He forced or encouraged many key people of
Chrysler to leave the firm. He gave more emphasis on the
factories then on the people. To cut back cost and to
increase improvement he fired many old associates of
Daimler Chrysler. During the merger it was predicted that
Chrysler would earn more then $5 billion in 2000, this
prediction was reduced by Chrysler. Using the TOWS
analysis, some Weakness, Threats, Opportunities, and
Strengths are listed below.
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.
* Strong existing product brands
* Leader in Fortune Global 500.
Weaknesses
* Merger combined two different company cultures (European and American).
* Harder to inspire vision and