Post on 02-Apr-2018
7/27/2019 Daimler Chrysler 9.30 Section
1/48
Daimler ChryslerSaidi Isaac
Ron SparksCandace Stocker
Jeron Wright
7/27/2019 Daimler Chrysler 9.30 Section
2/48
Daimler Chryslers Position
Daimler Chrysler is committed to achieveconsumer satisfaction among all global automanufacturers because of our engineeringexcellence, innovative products, and superiorservice.
7/27/2019 Daimler Chrysler 9.30 Section
3/48
The External Environment
7/27/2019 Daimler Chrysler 9.30 Section
4/48
External Analysis
Economic Factors Social Factors
Political Factors Technological Factors Ecological Factors
7/27/2019 Daimler Chrysler 9.30 Section
5/48
Industry Analysis
7/27/2019 Daimler Chrysler 9.30 Section
6/48
Porters Five Forces Model
7/27/2019 Daimler Chrysler 9.30 Section
7/48
Competitor Profiles
Toyota
7/27/2019 Daimler Chrysler 9.30 Section
8/48
Competitor Profiles
GM Ford
7/27/2019 Daimler Chrysler 9.30 Section
9/48
7/27/2019 Daimler Chrysler 9.30 Section
10/48
Value-Chain Analysis
Primary activities Secondary activities
Strength and Weakness Competitive advantage
7/27/2019 Daimler Chrysler 9.30 Section
11/48
Primary activities
Inbound Logistics Marketing and Sales Service marketing communications
7/27/2019 Daimler Chrysler 9.30 Section
12/48
Secondary Activities
Human Resources Management Technology Development Firm Infrastructure
7/27/2019 Daimler Chrysler 9.30 Section
13/48
Strengths And Weakness
Strong Brand names Broaden it with models Perfect fit and leaders Negative view of Mercedes
7/27/2019 Daimler Chrysler 9.30 Section
14/48
Competitive Advantages
Wide variety of vehicles Mercedes strong characteristics
7/27/2019 Daimler Chrysler 9.30 Section
15/48
SWOT Analysis
7/27/2019 Daimler Chrysler 9.30 Section
16/48
Core Issue Automakers had been losing money. After 9/11/2001 sales of cars and trucks
dropped dramatically Mitsubishis sales were 20% Chryslers sales were 5% Mercedes sales were 2%
2003
7/27/2019 Daimler Chrysler 9.30 Section
17/48
Core Issue (cont.)
How to differentiate themselves from globalcompetition in a meaningful, sustainablemanner.
Growth of China automobile market Developing innovative vehicles that appeal to
consumers How to remain profitable in the future
7/27/2019 Daimler Chrysler 9.30 Section
18/48
SWOT Summary
S: W:
O: T:
7/27/2019 Daimler Chrysler 9.30 Section
19/48
Financial Analysis
7/27/2019 Daimler Chrysler 9.30 Section
20/48
World Ranking
01000000200000030000004000000
50000006000000700000080000009000000
GM FORD TOYOTA-DAIHATSU
VOLKSWAGEN DAIMLER-CHRYSLER
Auto Manufacturer
U n i t s
2000 World Ranking2001 World Ranking
2002 World Ranking2003 World Ranking
7/27/2019 Daimler Chrysler 9.30 Section
21/48
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
7/27/2019 Daimler Chrysler 9.30 Section
22/48
Net Income
From 1998 to 2003 DaimlerChrysler onlyexperienced a loss in net income within 2001
In 2000 the company had nearly a gain of 7.89billion
In 2001 this amount totaled a whoppingnegative 662 million
Causes and effects
7/27/2019 Daimler Chrysler 9.30 Section
23/48
Stock Prices
Trends Factors
Economic conditions
7/27/2019 Daimler Chrysler 9.30 Section
24/48
Market Conditions
Terrorist attacks Capital funding
Acquisitions within the industry
7/27/2019 Daimler Chrysler 9.30 Section
25/48
Ford Profitability Ratio
2003 2002 2001
Profit Margin 0.00357 -0.007 -0.042
Turn Over 0.00156 -0.003 -0.062
Return on Investment (ROI) .000557% .00242% .26%
Return on Equity (ROE) .0151% .128% 2.95%
Toyota-Daihatsu
Profitability Ratio
2003 2002 2001
Profit Margin 0.0205 0.0278 0.0294
Turn Over 0.0133 0.0154 0.01211
Return on Investment (ROI) .0272% .0428% .0356%
Return on Equity (ROE) .0634% .0863% .070%
Daimler Chrysler
Profitability Ratio
2003 2002 2001
Profit Margin 0.0033 0.032 -0.0044
Turn Over 0.0025 0.0251 -0.0032
Return on Investment (ROI) .000825% .08032% .01408%
Return on Equity (ROE) .004265% .43% .0748%
General Motors
Profitability Ratio
2003 2002 2001
Profit Margin 0.0208 0.0093 0.00339
Turn Over 0.0085 0.0047 0.0018
Return on Investment (ROI) .01768% .00434% .00061%
Return on Equity (ROE) .314% .236% .001%
Profitability Ratio
7/27/2019 Daimler Chrysler 9.30 Section
26/48
Daimler Chrysler
Leverage Ratio
2003 2002 2001
Total Debt-Total Assets Ratio 0.539 0.5354 0.556
Long-term debt to Equity Ratio 2.12 2.275 2.241
General Motors
Leverage Ratio
2003 2002 2001
Total Debt-Total Assets Ratio 0.9429 0.9794 0.9365
Long-term debt to Equity Ratio 10.755 29.636 8.439
Ford
Leverage Ratio
2003 2002 2001
Total Debt-Total Assets Ratio 0.3865 0.376 1.053
Long-term debt to Equity Ratio 1.629 2.434 1.729
Toyota-Daihatsu
Leverage Ratio
2003 2002 2001
Total Debt-Total Assets Ratio 0.5377 0.4929 0.4814
Long-term debt to Equity Ratio 0.6688 0.7238 0.7217
Leverage Ratio
7/27/2019 Daimler Chrysler 9.30 Section
27/48
Strategic Scenario
7/27/2019 Daimler Chrysler 9.30 Section
28/48
LONG TERM OBJECTIVE
Number one automobile manufacturer in theworld
7/27/2019 Daimler Chrysler 9.30 Section
29/48
BEST CASE SCENARIO
Not to separate Operation Groups: Mercedes units
Chrysler units Mitsubishi units
7/27/2019 Daimler Chrysler 9.30 Section
30/48
WORST CASE SCENARIO
Separation of the groups Sale of Chrysler units
loosen a mega-merger Money for Promotional
7/27/2019 Daimler Chrysler 9.30 Section
31/48
MOST LIKELY SCENARIO
Separation of operations units Mercedes unit from
Chrysler unit and Mitsubishi unit
7/27/2019 Daimler Chrysler 9.30 Section
32/48
WHY
Maintain Mercedes position Profit for Innovation Costly to maintain and sustain other Have stronger brand image Succeed and Survive in the competitive
markets
7/27/2019 Daimler Chrysler 9.30 Section
33/48
Corporate Level
Strategies
7/27/2019 Daimler Chrysler 9.30 Section
34/48
Alternative I: Reorganization
Expected Benefits Winning Against the Competition Drawbacks
7/27/2019 Daimler Chrysler 9.30 Section
35/48
Expected Benefits
Units work cross-divisionally to maximizestrengths
Allows for the transfer of information,innovation, and expertise
Cost-saving strategies Feasibility
7/27/2019 Daimler Chrysler 9.30 Section
36/48
Winning Against the Competition
Variety Increased attractiveness Stronger vehicle designs Extra kickers
7/27/2019 Daimler Chrysler 9.30 Section
37/48
Drawbacks
Negative view towards Mercedes Decrease in sales for Mercedes A way around these implications
7/27/2019 Daimler Chrysler 9.30 Section
38/48
Alternative II: Restructuring
Expected Benefits Pros Cons
7/27/2019 Daimler Chrysler 9.30 Section
39/48
Expected Benefits
Fixes Mercedes quality issue Increases the Mercedes brand image Helps DaimlerChrysler
7/27/2019 Daimler Chrysler 9.30 Section
40/48
Pros
Power of Mercedes Generated profits A focus to improve
7/27/2019 Daimler Chrysler 9.30 Section
41/48
Cons
Relying to much on Mercedes Holding up both ends Mercedes could still have quality issues How to reduce these
7/27/2019 Daimler Chrysler 9.30 Section
42/48
Business Level Strategic
Alternatives
7/27/2019 Daimler Chrysler 9.30 Section
43/48
SBUs
Mercedes Car Group Chrysler Group Commercial Vehicles Services (DaimlerChrysler Bank) Other Activities (MTU Aero Engines,
Mitsubishi Motors, European AeronauticDefense and Space Company (EADS)
7/27/2019 Daimler Chrysler 9.30 Section
44/48
Generic Strategies
Differentiation Low-Cost
7/27/2019 Daimler Chrysler 9.30 Section
45/48
Evaluation of Business Level StrategiesDifferentiation
Pros High level of customer loyalty Charge premium for product Possible increase in revenue Reach wider target market
Cons Companies imitate Consumers view changes Difficult to charge premiums
7/27/2019 Daimler Chrysler 9.30 Section
46/48
Evaluation of Business Level Strategies
Lower Cost Leader
Pros Lower prices Higher profit margin Increase in revenue
Cons Companies imitate Technology changes Bases for cost leadership
erode
7/27/2019 Daimler Chrysler 9.30 Section
47/48
Grand Strategies
Product Development Market Development Innovation
7/27/2019 Daimler Chrysler 9.30 Section
48/48
Preferred Strategic Choice
Long-term Objective Corporate Level Strategy Business Level Strategy