Daimler Chrylser

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 Benz's

existing stock making Daimler Chrysler worth $84 billion.

This merger didn't 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